Perception is Reality

Posted by Scott Provost, Percepta

If you are in the business of selling research products to life scientists then chances are good you have probably sent out promotional information or conducted market research using email.  It is an efficient and cost effective way to reach lots of potential customers quickly.  If you are using your customer lists to communicate new products or promote special pricing via email then you are tapping into one of your most powerful resources - the people who have already proved they are interested by buying your products.  Well done.

However, your customer list may not always be the best choice for some activities for a variety of reasons.  Maybe you have questions and want answers from researchers other than your customers. You know the questions I mean - like who are you - what do you want? - and why aren’t you buying from me?  In that case the customer lists are not going to give you the answers you are looking for.  Many turn to third party rented emial lists from vendors that offer them for anywhere from a US$50 to US$500 or more per thousand email address names.   It all sounds like a great idea - and it would be except there is a great deal of difference in the quality of various life science lists when it comes to response rates and price is not necessarily a good indicator so caution is required.  Some are pretty good and some are just awful.  Beware of reports of high click through rates. Lets face it - “click throughs” are not all that good a measure of success.  You need answers, not click throughs!  A good quality list should deliver at least 1% response rates for a few hundred dollars per thousand names.

We conducted a little experiment last week and tried several rented lists for an online survey we were performing.  We chose to use a “list broker” - someone that consolidates life science lists.  We selected the categories we needed, paid in advance and they agreed to send our email invitations to roughly 11,000 rented names.   The invite we provided offered $25 in exchange for completion of a 10-15 minute survey.   When all was said and done we confirmed a total of 26 responses.  Put another way that is a 0.24% response rate!  That is not even one quarter of one percent!  We call that an “eFail list”. If you have had similar experiences give us a call and we will compare notes. 

Oh - and as a control (yes we are scientists as well as marketers here at Percepta) we sent out about 6,500 of the same invitation from the Percepta Panel, which we maintain for market research projects, and confirmed a total of 158 completed surveys which is a 2.4% response rate.  CAVEAT - Percepta normally gets about 10% response rates but this project was not perfectly in our sweet spot which is why we chose to source from 3rd party lists in the first place. 

The lesson here is just another version of Buyer Beware.  Maintaining a quality mail list is a lot of work.  People change jobs, change email addresses, sign-up even though they are not scientists.  Some lists also get blacklisted which means they have been SPAMMing.  All of this means your email never makes it to the researcher and then you don’t get the answers you need.  Instead you get “click-through rates”.   We at Percepta know it’s a big bad world and we work very hard to maintain our list and our response rates are a testament to the quality of the Percepta Panel.  We only give access to the panel through our Life Science Dashboard reports and commisioned projects.  We promise that if we conduct market research for your company we will give you answers and not click-through rates.

Your comments are always welcome.

I Want You - to tell us what you want

Posted by Scott Provost, Percepta

Percepta offers a lot of different marketing services besides market research, but market research seems to be a popular area of interest.  We offer a series of segment specific market research reports that are popular (The Life Science Dashboards), but we also like to publish complimentary reports a few time a year for our colleagues in the industry.  Recently we published a report on the stimulus funding for life science research in the US as a result of the American Recovery and Reinvestment Act.  Previously we published a report on the customer’s perspective on life science manuafacturing in low cost countries.  Now we want your input.

What would you like to see Percepta focus on in the next free report?  Give us your comments below and we will choose from the best suggestions. Then we will conduct the research, write the report and post if for a free download.  The next topic is up to you so now is the time to let us know.

Bandwidth all tied up?

Posted by Scott Provost, Percepta

All of us at Percepta have cumulatively been involved in literally hundreds of biotools product launches in the course of our careers at various well known biotools companies.  Some of these products were fabulous successes and others were fantastic flops.  The flops failed for a variety of reasons but the successes all had one thing in common – they were fast out of the gate and delivered what they promised.

I remember one success particularly well.  I was responsible for introducing a new line of products for a major supplier.  The new portfolio  was a significant expansion of what was a minor product line for my employer at the time.  The launch was quite large with over 65 individual kits all focused on various aspects of a very common molecular biology application performed by more than 90% of life science labs.  There was a lot to worry about because we were late to market with this portfolio and we knew we were facing serious competition and an uphill battle to take share from them, yet we were confident that if we could get researchers to try the product we would be able to convert them.   Naturally, we had a sample program in place and the sales force had been trained and properly incentivized.  But there was one thing we did that I still believe made the difference between early post-launch success and trench warfare with the competition (and our sales force too).  We asked our existing customers a few simple questions.

I have always been a strong proponent of the bird-in-hand mentality, so for the sake of saving time and extending our thinly spread launch team we hired an outside marketing research consultant to poll our company customer list to identify researchers that were not all that happy with their current competing supplier for this common molecular biology application.  The goal was to prime the sales force pump, so to speak, with easy to reach customers that were predisposed to try our new products. 

It turned out that there were about 1,500 disgruntled researchers among those responding to our short survey that were receptive to  a new method/kit/supplier.  Best yet, we knew who and where they were and what they were unhappy about.

Putting this kind of information in the hands of a hungry sales force is a bit like throwing gasoline on a fire.  We decided to generate a one page profile on each of the receptive customers and divvy them up by sales territory to the respective sales rep.  The sales force really ate this up and to make a long story short the portfolio launch was the most successful revenue garneting product launch in the company’s (at the time 18 year) history!  It was fast out of the gate and just kept going.  It is still growing today.

It is a simple idea that any company can do with their own resources – but few if any try.  Why?  Because most marketing managers are too thinly spread already and have too much to do before any launch.  There is not enough bandwidth and so many internal hurdles to get over like  getting access to the customer mailing lists, writing and then setting up the survey, analyzing the data.  And who writes the one page reports and gets them sorted by sales territory?  In my experience it is almost always a matter of bandwidth and not” know how” that prevents companies from doing this at launch.

If this sounds familiar , take heart and remember that we hired a consultant to help -  and it was well worth it to do so.  Percepta’s Profile Program™ can do all the heavy lifting and help your next product launch with a minimum of your time.  We’re here when the time is right. 

As always, your comments are encouraged.  

Sustained Growth

Posted by Scott Provost, Percepta

As everyone knows, the Great Recession or 2008 and 2009 has taken its toll on most industries and the biotools supply industry is no exception.  However, there is real evidence that the light at the end of the tunnel is getting a bit brighter.  Stimulus dollars from the American Recovery and Reinvestment Act of 2009 have finally started to find their way to biotools companies’ revenue reporting.  Recently Bruker, a leading European supplier of analytical instruments with more than $1 billion in revenues, reported at an August Investor Presentation (give the PDF link a moment to load) that they have already realized greater than $10 million in stimulus funded revenues in US markets and anticipated as much of as 20% or more of their revenue could come from global stimulus efforts.  That bodes well for the biotools industry.  But the big question for all biotools companies is – will growth be sustainable or just a windfall? 

Percepta Associates recently reported that more than more than 80% of the roughly $9 billion to be distributed by the NIH as extramural grants will be hitting research budgets between now and February 2010. Ideally the stimulus will create new jobs and researchers report that new hiring is in the plans of many research laboratories.  Job creation stands a better chance to contribute to a sustained growth in the biotools industry because more researchers will presumably perform more research, which means they will use more equipment, consumables, materials and reagents.

It remains to be seen if the global stimulus efforts will promote sustainable growth, but smart biotools companies are preparing for all possibilities.  While sales departments are actively vying for the influx of funding with their current product portfolios, marketing managers should be planning for the next generation of products that will deliver true value.  Knowing what value is to the end-user is a critical part of delivering it. Has your company taken the time to understand what is important to your customers or are you assuming you know?  Trusting in assumptions is a very risky undertaking and if you have not recently polled your customers to understand their needs in detail you may be wasting valuable time and resources.   If you follow the current marketing thought leaders you will know how important it is to profile your customers and make sure you are tailoring the right message to the right end-users.  If you are not sure how to do this, Percepta can help.  Contact us any time with questions or add your comments, which are always welcome.    

Flux Capacitor

Posted by Michael Klein

At Percepta, our first point of contact is at times an overworked product manager blurting, “I need to field a survey on…insert topic here…and I need the data back by…insert excessively tight deadline here.”  Our approach is generally to convince them to come down off of the ledge, take a deep breath, and provide us with the answers to three mission critical questions, not necessarily in the order of importance:

1)      What do you want to know?

2)      Why do you want to know this?

3)      What are you going to do with this information?

Question 1: What do you want to know?

Q1 identifies the missing pieces of the “knowledge puzzle” that exist at the client’s organization.  Knowledge gaps may be relatively simple, like a need for an up-to-date snapshot of the company’s market share in North America.  Or more complex, like understanding the performance specs, QC requirements and delivery schedule for bioproduction-scale culture media at biopharmaceutical manufacturing facilities.  Q1 helps us choose the proper market research method (maybe it’s not a survey), and select an appropriate target audience (perhaps biopharma process development and manufacturing scientists).

Question 2: Why do you want to know this?

Q2 provides the project goals and objectives, and crystallizes the overall scope of the study.  It tells us precisely what we need to ask end-users and/or potential customers, and also tells us what we don’t need to ask, which is often equally important.  Perhaps a client wants market share information to discover whether they are gaining or losing share overall.  If so, we can ask the appropriate questions now and also put a plan in place to measure performance regularly, so that the company can plan accordingly.

Question 3: What will you do with the information?

Q3 reveals the business decision riding on the results of the research.  For example, a client might be developing marketing campaigns based on an annual marketing budget and thus must decide how to best allocate resources across major product lines.  Here is where issues with market research projects often arise.  Quality market research must be accurate and actionable – actionable meaning it not only provides the necessary knowledge but also occurs in time to influence decision making.  How actionable is customer feedback related to unmet needs for a product that is in the late stages of design?

It’s our job at Percepta to make sure you get the “necessary knowledge” part right.  However, lacking the Flux Capacitor (Google it, if you were born after 1977), there isn’t much we can do to fix any “in time to influence decision making” issues.  But you can.

Get your organization to think strategically about market research.  First, add it to your budget planning. Then three months before strategic planning, meet with your product development or commercial marketing team.  Brainstorm, beginning with a focus on Question 3, to clarify the strategic decisions facing your organization in the near term.  Then, shift the focus over the next week or so to Questions1 and 2.  Identify those areas where knowledge necessary for decision support is lacking and develop a list of goals and objectives for potential marketing research projects designed to address these knowledge gaps.

Need help in guiding this process?  Percepta excels at facilitating cross-functional exercises to identify knowledge gaps and develop a market research plan designed to capture information that gives you the confidence you need to make the correct calls for the success of your business.

Companies that effectively coordinate market research with strategic planning excel at developing winning products and implementing the proper metrics to regularly measure sales and marketing effectiveness.  Don’t believe me?  I’ve got a used DeLorean I’d like to sell you…

Your comments are welcome

By Scott Provost, Percepta

In the past few years Percepta has had several clients come to us saying in essence “We know we have the best products - just help us find the customers”. This is illustrative of the all too common view that since we have the best widget for whatever bench application all we need to do is show it to prospective customers and we won’t be able to keep it in stock.

The presumption that the best performing product will win the business is at best a bit naïve, and at worst recklessly misguided. If building “the best products” is in a Bio-tools company’s DNA and building customer profiles isn’t, then they need some gene therapy.

In his useful book The New Rules Of Marketing & PR, David Meerman Scott reminds us to forget about the products for now and think first about our customers. Scott’s theory applied to our industry essentially translates to this – biotools suppliers need to think more about what customers want from their research tools and not how to make one message fit everyone’s needs with a bunch of, what Scott aptly calls, marketing “gobbledygook”.

This requires a fact-based and up-to-date honest assessment of your customers. But first let’s be honest with ourselves. Has your company profiled your customers? Do you really know what they are doing and who else they are buying from? Do you know if they are loyal adopters or price shoppers? Marketers need to understand what their customers are trying to do in a very detailed and precise way. If they don’t, their marketing messages often end up full of the vague, unclear, or glossy language – in other words “gobbledygook”.

Unfortunately, one-size-fits-all, shotgun marketing is overused in the bio-tools industry and a more personalized intimate connection to your customers must replace it. Customer profiles will help your company personalize a message that resonates with each one of them. Tools companies that fail to learn this will not reach their full potential and may even fail until they do. Want help with profiling your customers? Percepta has affordable programs that might be right for your company. Why not check it out?

Your comments are always welcome.

Posted by Scott Provost

Last October our little consultancy looked around and noticed things had begun to slow down a bit.  New business wasn’t banging at the door and we had to face an unpleasant truth – we were not as immune to the economic downturn as we had hoped.

Percepta is a San Diego area marketing consultancy serving biological research tools suppliers.  You know the ones I mean - big companies that buy up small ones; small ones that want to get bought, and everything in between.  Having worked for many of them over the past 20-some years we all had been through economic slumps before.  Back in the late eighties during one of the first resessions the adolescent bio-tools industry faced, we could feel somewhat secure because smart venture groups kept courting the short list of bio-tools companies that existed then telling them that biological research was almost completely funded by the federal government and the government would be sure that “research must go on”.  The suppliers, they said, were “recession proof”.

So what happened?  Why did business slow down so dramatically in October 2008?  What happened to the old mantra “research must go on”?  Well the answer is a little complex.

First there was the psyche of the tools companies.  I spoke with a bunch of friends I’ve worked with over the years at many tools companies last October when the economy was in freefall and things were a bit scary.   The VP of Marketing at one of the divisions of one of the leading suppliers to the pharmaceutical, healthcare and life science industries told me that business was slow and “management wants to keeps its powder dry” – translation: we are not going to spend any money on marketing in case we need it later.  A marketing manager at a large well known molecular biology and chemicals company told me basically the same thing – “budgets are tight until January 09 at the earliest”.  The management at these and other companies was nervous. Who wasn’t?

Second there was the exodus of investors.  Small, medium and large companies couldn’t raise money no matter how urgently it was needed.   Nascent startups were withering on the vine and even giants like Invitrogen, which at the time was trying to raise capital to complete the acquisition of Applied Biosystems, had to patch together commitments from over 300 separate banks and raid its own stock and cash coffers to close the deal.  And anyone that has tried lately knows that venture capital has all but vanished in biotech circles.  Even if it seems counterintuitive, when money is tight marketing budgets are often among the first to suffer.

Finally there is the research funding hangover resulting from the decade long paltry growth in federal funding during the Bush administration.   In the end we are all dependent on researchers buying research products.  Sure there are pharmaceutical and diagnostic companies that don’t rely on federal money but they are only half of the market and they are cutting budgets too.  Bench scientists have had to scrape by with fewer research dollars and the dollars they have don’t buy as much as they used to.

But wait a minute – didn’t we hear something about a new $800 billion stimulus package?  Didn’t that include an unprecedented $10 billion for the NIH to spend in two years as part of the American Recovery and Reinvestment Act of 2009 (ARRA), and isn’t $9 billion of that earmarked for extramural grants to pay for the advancement of scientific research?  Shouldn’t tools company’s collective mouths be watering in anticipation of the influx of fresh research money?

Yep.  So where is the money? We decided to find out.  Percepta sponsored a study to take the temperature of research funding optimism in America as a result of the ARRA stimulus.  We are analyzing the results now and in coming posts we will share some of the more interesting findings.  We’ll also post the final report on Percepta’s website so keep an eye out.     

October 2008 was a sobering month for a small business like Percepta.  2009 is much more like normal, albeit a new normal, and business is back to predictable levels because “research must go on”.   But the world is changing and bio-tools companies in the new normal will be changing too.  We can’t wait to see what happens.  

Your comments and thoughts are welcome.