Perception is Reality

Posted by Scott Provost

In the recent few quarters Percepta has experienced an increase in demand for studies relating to better serving the pharmaceutical industry.  The focus of the studies have varied considerably but the trend is evident.  This tells us bio-tools companies are getting more serious about tailoring an offering to the drug discovery and development market that will resonate with the end-user. 

For years the pharmaceutical companies have been telling bio-tools companies that they have all the right pieces of the puzzle and they only need to put them together to form the picture they are looking for.  Are bio-tools companies putting the individual components of their portfolio together in new ways to position them for drug development applications?  Some are and with reasonable success.  Others are discovering that there are gaps that need filling - which is also good information with which to take action.  The important thing is they are asking the end-user what they need (market driven) rather than filling a catalog or website with a pile of products and hoping they figure it out for themselves.  As Seth Godin has pointed out in many ways and in many blog posts;  ”People are moved by stories and drama and hints and clues and discovery.”  Now bio-tool company marketers need to put it all together in a story that will speak to the pharmaceutical people.

Want help figuring out what your company may need to do?  Percepta can help.

As always, your comments are welcome.

Posted by Scott Provost

We hear all the time that elements of traditional molecular biology reagent portfolios have become increasingly commoditized. Dictionary.com defines commodity as “any bulk good traded in an exchange…”. By that people generally mean that the reagent is not differentiated by anything other than price.  One bag of tips or tubes is the same as the next so why pay premium prices?  It is an argument that is not without its merits.  There probably are some research products that really are not differentiated.  However, I argue that they are few and far between and the exception and not the rule.  Let’s take the aforementioned tips and tubes example - have you ever used a lower cost tip that did not make a good seal on the Rainin multi-channel pippet? The volumes drawn are not consistent for all of the tips and it is visible evidence that is hard to ignore.  What about a micrrocentrifuge tube that pops its lid in a hot water bath?  Has that ever happened to you?  If it has I will bet you it was not from Eppendorf.  A commodity is not something that performs differently each time you use it.

Lets consider Taqpolymerase, a reagent that is used every day in hundreds of thousands of labs around the world.  It is notorious for being described as a commodity reagent.  Why pay more if Taq is Taq?  Sometimes that may be true.  If you only need 80% success in screening thousands of samples for presence or absence of a sequence then I would agree.  But if you need it to be a robust and reliable reagent for important experimental determinations then we all know one commercial Taq is not the same as the next.  So how do we know?  Branding.

Scientists often turn up their noses to issues of brand but such as response is ingenuine.  Of corse brand matters.  Evidence abounds!  The Taq polymerase patents began to expire 5 years ago and anyone can make and sell Taq.  But what company still sells more than anyone in all its various configurations and blends?  Life Technologies through its Applied Biosystems and Invitrogen brands (NASDAQ: LIFE). 

Greg Lucier, Chairman and CEO of Life Technologies undertands the value of brand.  In a recent quarterly investors call on July 29th 2010, investment analyst Jonathan Groberg of Macquarie Research asked Lucier the following question:  

“You’ve often talked about one of the strengths of the portfolio is that it’s not that price-sensitive, and in terms of when you tried lowering prices, it hasn’t really stimulated a lot of demand and that’s why you get … a lot of good pricing ability. Then I’m just curious, specifically within the PCR portfolio, have you tried that overtime? I’m just curious, there’s been … a lot of announcements around people trying to get more into that business. I’m curious just your view of how effective price is as a mechanism in the PCR space.”  

Greg Lucier’s response was all about brand when he replied:

“I think what gets highlighted in that particular space, is there’s a lot of the very low end reagents and otherwise. And actually, they’ve always been around, at least for the last several years, kind of the low end of that segment. We have products from that segment as well. So my comments really still pertain globally to this business, that the relationship between price and volume is not a direct connection …. And when you have market leadership like we certainly do in the PCR business, people are inclined to stay with their products, and so we benefited from that.” 

That is a practical example of the value of branding in the scientific reagents space.  Brand reputation is important to scientists whether they admit it or not.

Need help with branding?  Percepta can help you with a brand platform that will build equity for your reagent brands.   As always your comments are welcome (no blogspam please).

Posted by Scott Provost, Percepta

There are times each year when our clients just need a little extra help to get things done.  There are a lot of reasons that this is true – internal staffing shortfalls, impending strategic planning, management pressing project time lines, initiative de jour  – you name it.  This of course always causes stress for the marketing manager that needs to get things done within a defined time frame. 

In a former life, when I was a marketing manager at a well known biotools company, I had a project that required some “voice of customer” market research and I had no one and no time to do it.  I looked externally for the help I needed and hired a large local consulting firm with a group that could conduct telephone interviews.  I learned the hard way that, while they were well meaning, they were not familiar with the biotools industry and I ended up working very hard to help them get the interviews done.  Even with that, they botched many of the interviews by mispronouncing the technical terms which looked bad and irritated the participants.  Worse yet, I learned too late that they missed the truly valuable customer cues because they didn’t know when or how to ask a follow up question.  They just blindly moved onto the next question like a robocaller.   It would have been better if I had done it all myself which sort of defeated the purpose of getting help.  

When you need help it really pays to get someone with specific experience.  Just because a plumber works on pipes and water doesn’t mean he is qualified to fix your hydraulic lift (if you had one).   Ok maybe that is an odd example but the point is - for biotools companies seeking help with things like strategic planning (including product development), brand development, market research, public relations and social media planning you need someone with the right experience.  These are NOT cookie cutter undertakings that just any old marketing consultancy can take on successfully for a biotools company.  

While Percepta is very comfortable with most of these activities, we would not claim to be qualified in Public Relations or Social Media Planning (but we know who is and would happly refer you to them).

The lesson here is to be sure you are vetting your external support carefully and when you find a good firm, think seriously about sticking with them.  You will both benefit. 

As always, your comments and thoughts are welcome.    

Posted by Scott Provost, Percepta

In a very definite way, quarterly reporting for public companies is a measure of how well they can execute their strategic business plans.  If we assume that no serious company plans to fail, then when companies miss Wall Street’s expectations is it because they failed to plan?  Hard to say because every company has its own reasons for the speed bumps they inevitably hit along the way.  Sometimes it’s supply chain interruptions, or large customers delaying orders, currency exchange rates or maybe the analysts got it wrong.  But the reality is, there are companies that meet expectation more often than not and those companies have got a plan that they are executing. 

Big or small, does your company have a strategic plan that is updated annually that takes into account current market trends, your competitive environment, your competitive position, multi-phased product development plans, company resource allocations, and a revenue and profit target, including stretch goals that are based on all of the above?  If not then is it possible your company is not executing a strategic plan as much as hoping for success?  Think about it this way - if your company does the same thing quarter after quarter and you keep struggling to meet revenue and/or profit projections then what are the expectations based on?  As a former co-worker of mine used to prophetically say “nothing ever changes if everything stays the same”.

If you want to make some changes and start to execute a plan, contact Percepta.  We can help your company ”hit the plan”.  

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.  

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

Slice of American Stimulus

Posted by Scott Provost, Percepta

As a marketing consultancy that serves the research biotools industry, Percepta’s business is more or less directly linked to the market dynamics of life science research in general.   These market dynamics can be – well … dynamic.   For example, as noted in earlier posts, research funding is the engine that drives the research biotools industry and to a large degree as funding goes – so goes the biotools industry.  Recent years have presented a difficult funding environment for US researchers and, as a consequence, many biotools suppliers. That’s why we believe things are about to get a whole lot better for biotools suppliers that serve the American life science research markets.

Here’s why - Percepta sponsored a research study in June/July to assess the ‘optimism’ of life science researchers in light of the American Recovery and Reinvestment Act of 2009.  There was a lot of good information that came out of that research study but a couple of facts stood out to us.  Altogether, the NIH budget for extramural grants is enjoying a 55% increase over last year.  Of the $9 billion dollars slated for new NIH grants to be funded in 2009-2010 there is still a little over $7.4 billion that has yet to be distributed to researchers.  Better yet, the vast majority is expected to hit the coffers of research labs by March 2010!

It is not exactly a secret that a significant portion of that funding will be spent on consumables like reagents, kits and enzymes as well as new research equipment though out American universities, colleges, research institutes, and potentially any lab funded by the NIH.   We should soon be hearing a great big ‘cha-ching’ for the biotools industry. 

Which companies will benefit the most?  Well that depends on many things but one thing is certain – companies that understand their customers well, because they have profiled them and use that information to serve them better, will be in the best position to capture a healthy slice of the stimulus pie.   Biotools suppliers that don’t really understand their customer and rely on one-size-fits-all, shotgun marketing may well be left licking the knife.

If licking the knife seems like a dangerous proposition, think about letting Percepta help you understand your customers and your markets better.  Also, download the free report Life Science Research Funding Optimism In The United States: A Researcher’s Perspective compliments of Percepta. 

Let us know what you think.  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.