Has the environment for Life Science commercialization changed?
Probably, yes. Before we consider why and how, let’s acknowledge that we are in a good place. Our prospective customers are very well funded, and prepared to try a range of new approaches.
What is different about Life Sciences today?
Small company funding is particularly strong, as is the demand for pharmaceutical development expertise. This has resulted in a plethora of newly funded Life Science technology companies, an increased demand for small company scale-up expertise, renewed M&A activity amongst traditional players, and international expansion. Our challenge in such a positive environment is to differentiate effectively and efficiently without adding to the baseline noise. I see three structural changes that can inform us tactically, and influence our commercialization success. These are:
The ways in which customers buy today,
The nature of high-performance sales representatives,
The role of marketing.
“...commercialization revolves around customers, not companies, products, or services; for commercialization to create value we need to understand our prospective customers”
How do Life Science B2B customers buy?
For the purpose if this article, I assume that most Life Science customers are scientists, medics, engineers, or some other group that behaves similarly. I also assume that commercialization revolves around customers, not companies, products, or services. For commercialization to create value we need to understand our prospective customers.
Most of our customers can be described as “…in ‘dynamic flux’ between curiosity and skepticism”. Essentially, an inherent or trained curiosity drives them to understand their world by gathering evidence that they believe to be factually correct. Opposing their curiosity and truth-seeking inclinations is an inherent or trained skepticism; skepticism must be avoided or overcome before prospects will act (or in our case, buy).
It has been proposed that objective, content-rich information should be readily available to engage with our prospects’ natural curiosity and their three-part buying process. Our content should help to: 1) support their recognition of a need for a new approach, 2) empower their desire to figure out what form a solution may take, and 3) decide how to deliver that solution.
It has also been proposed that B2B customers are engaging less and later in the buying process with sales representatives. This may be due in part to the readily available range of basic online information, such as: product or service features, technical information, reviews, feedback, pricing, and competitive comparisons. Even where the product or service is complex or high-value, buyers consume information online, which in turn influences their assessment of what form a solution may take before they even contact or accept calls from sales representatives.
What makes a successful Life Sciences sales representative?
A long-held common wisdom in the Life Sciences was that established relationships were the most important factor for sales success. That assumption has been challenged by a study of high-performance sales people in complex B2B situations. The authors found that 81% of the top sales performers were characterized by: great product knowledge, a unique view of their customers’ business, high self-confidence, or self-motivation. Only 7% of top sales performers were considered relationship builders. My observations during several challenging leadership roles leads me to agree with their results.
What is the role of Life Sciences marketing?
It has been estimated that the Life Science industry spends approximately $250MM annually on traditional outbound marketing activities with little to show for this expense. Advertising as currently deployed is thought to be wasted, lead generation results in at best a 1% response, and trade shows convert a low proportion of attendees into leads. Add to these low rates of return, the cost of producing, storing, shipping and updating traditional collateral, and you have what appears to be an expensive, low return traditional marketing function. There is a better way.
Marketing departments can now develop new inbound channels. Inbound marketing is a phrase used to describe a means by which prospective customers may seek to inform their buying decision by using the Life Science company’s exclusive channels. The Life Science company’s website should be at the core of its inbound strategy as it represents the most authoritative domain that the company can control. Good and accessible objective website content that is harnessed to optimized search capability, LinkedIn and Twitter (for example) can serve well to attract, engage, and inform prospects.
Marketing’s role is to develop outbound and inbound objective content that both engages with and retains the prospect’s attention during the previously described stages in their buying process.Once those needs have been supported, marketing can provide support to a well-informed sales representative who can help to persuade the prospective client that their company is best placed to deliver the sort of solution that they seek.
“Prospects appear to be waiting longer before talking with a sales representative, but can be influenced by marketing’s objective content-rich information as they consider their options.”
What are the implications for Life Science Commercialization?
We can create a more effective commercialization strategy if we rethink the role of marketing, and know the ways in which prospective customers buy Life Science services and products, as well as the characteristics of high-performance sales representatives. Prospects appear to be waiting longer before they engage with sales representatives, but can be influenced by marketing’s objective content-rich information as they consider their options. When the time is right, we can send in our highly knowledgeable and engaging sales representatives to continue to support the buying process.
You can read more about effective Life Science commercialization here, and how Technology companies have used that approach very successfully here.
Mike Butler, Ph.D.
Founder and CEO, Unit Life Sciences.