Crisis and opportunity in the life science sector.

Service providers in the life sciences (e.g., CROs, CRMs, core labs, firms offering preclinical services such as formulation, etc) work in a sector that is changing and changing rapidly. The Big Recession tore a big swath out of Big Pharma, leaving opportunities for smaller firms to come in and grab a piece of the outsourcing action. Competition among these smaller firms is increasing as they jockey for position. Yes, there’s work out there, but there are also plenty of hungry firms that want that work.

This sector is facing both crisis and opportunity. For crisis, we need look no further than the patent cliff, the collapsing blockbuster business model, increased regulatory oversight and the global recession. For opportunity, we can look at the accompanying offshoots: the increase in outsourcing and the expansion of markets worldwide.

In this sector’s marketing there is both crisis and opportunity as well. To see crisis, look at the increase in the number of competitors and the prevalence of low-cost, offshore providers. To see opportunity: look at all the ineffective marketing in this sector. Firms that solve the marketing puzzle can differentiate themselves very clearly, driving demand and fighting off price pressure.

For service providers along the drug development chain, the work product or output is typically reviewed by the FDA, but the marketing claims are not. This is in sharp contrast to companies selling pharmaceuticals direct-to-consumer or direct-to-clinician, whose claims are closely monitored by the FDA.

You don’t have to be an economist to notice that the scrutiny of work product by the FDA leads to a similarity in work product. Given the importance of the end result, and the amount of money that can be won or lost based upon FDA approval, poor data isn’t typically a problem. Given the similarity in work product, astute marketing would dictate that these firms find other ways to differentiate themselves. Looking at much of the marketing in this sector, this isn’t happening. Isn’t it odd that poorly focused marketing is the norm?

A simple test for effective marketing.

Marketing has two goals:

  • a) to establish a clear positioning (image) in the minds of the audience, and
  • b) to facilitate action or a change in belief by the audience.

 

To rephrase the first point, marketing should differentiate your firm from your competitors; your marketing claims should reveal and reinforce your uniqueness.

It is easy to test whether your marketing is effectively accomplishing this. Visit the home page of the web sites of your firm and your three top competitors. Translate the jargon you find there into marketing claims written in plain English. For example, this language: “you are kept informed at every step as your project progresses with the quality, precision and efficiency that you expect” would be translated into: “We keep you informed. We provide quality, precision and efficiency.”

Look closely at the resulting claims from your site and compare them against your competitor’s. If you find a similar claim from any competitor, eliminate it from your list. Many firms in this sector claim that they produce “Quality data” or “Quality results,” so scratch the claim of “Quality” from your list of claims; it is not unique.

If you are like many firms in this sector, you won’t have a very long list when you are through eliminating duplicate claims. In fact, it is not uncommon for firms with poor marketing and little differentiation to eliminate every one of their claims; every claim they make is a duplicate of a competitive claim. If your marketing claims are non-differentiating, you’ll never create or own a unique position in the minds of your prospects. Without uniqueness, your firm is a commodity. Commodity offerings have a much harder time facilitating action or a change in belief.

What is wrong with “Quality”?

As the language in the example above reveals, a claim of “Quality”is often a clear statement but one with an ironic twist. The statement implies, “We are just like everyone else.” A simple claim of “Quality” is not effective, because every firm, when asked, will claim that they provide a quality product or service. From the viewpoint of a prospect, how is it possible to distinguish between competing claims of “Quality?” It is almost impossible, so if you are going to use “Quality” as a claim in marketing you can’t just make this claim; your claim has to be either demonstrated or proved.

Demonstrating quality: If there is a way you can demonstrate the quality of your product/service, go ahead and do so, as this can be effective if handled correctly. Car manufacturers want you to visit the showroom, so they can demonstrate the quality of their product as you kick the tires, hear the sound of the door close and inspect the fit and finish. When demonstrating the quality of an intangible service, however, it often requires providing that same service on a trial basis. While this is risky, it can yield positive results if handled properly.

Proving quality: An alternative to demonstrating the quality of a product/service is to provide proof. Car manufacturers use the reliability results from firms like JD Power and Associates to prove the quality of their products. Customer surveys and other metrics can be used as evidence when proving the quality of a service or product.

When “Quality” does damage

What alternatives do you have to a claim of “Quality?” Your own marketing claims will need to be based upon your firm’s offerings and rooted in the specifics of your particular situation. There is no single answer that will apply to everyone. And that is the point, isn’t it? When everyone makes the same claim, that claim ceases to be differentiating and is no longer effective.

While there is no universal claim, there are some universal guidelines. To be effective, your claims must meet several key criteria. Your marketing claims must be:

  • Unique (that is, differentiating)
  • Authentic (that is, grounded firmly in what your firm is committed to delivering)
  • Meaningful (that is, both relevant and credible)
  • Verifiable before purchase (that is, an independent person should be able to validate the claim without purchasing the product/service)
  • Sustainable (that is, true for a prolonged period)

Of these, the most important is uniqueness, without which your firm will not be differentiated from your competition. So if you are looking for an alternative to a claim of “Quality,” look first to those differentiating factors that really do set you apart from your competition. In most cases a claim of “Quality”will not be seen as unique and will position you as a commodity.

Making a claim such as: “We produce a quality product/service,” is a waste of your breath and your audience’s valuable attention. And if you waste their attention, you are damaging the relationship by destroying trust. In this case, poor marketing will hurt more than it will help.