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Life Sciences and Analytical Instruments Podcast - Alexander Group, Inc.

The industry is experiencing unprecedented investment and growth. Capacity and access to raw materials have superseded R&D and sales as immediate growth levers. As a result, commercial leaders are adjusting their priorities.

Life Sciences and Analytical Instruments practice leaders, Arshad Carim and Raj Sharan explore the top trends to ensure your commercial strategies, structure and management processes position you for success in 2022.

Visit the Life Sciences and Analytical Instruments practice or contact Alexander Group to learn more.

 

Full Transcript:

Arshad Carim: Hi, this is Arshad Carim. I’m a principal at the Alexander Group in our Life Sciences and Analytical Instruments practice. We’re back again today to talk about traversing surging growth, what life sciences and analytical instruments companies are thinking around commercial planning priorities in 2022. These five key observations have an overarching theme of works reversing the surging growth that’s going on and the concerns about how long it might last? What should I do about it? How does it affect my planning? What are the chess pieces that I move as I’m thinking about 2022?

So diving in issue number one is really continuing to focus on and stay close to long-term growth markets. Those may be certain applied markets that companies are focused on food and beverage. Environmental could be clinical, right, as a big growth area as well as emerging areas. So areas we hear a lot about in the news: gene therapy, cell therapy and analysis. Emerging areas that are getting a lot of investment and focus that we as an industry and companies in the industry need to continue to focus on and think about as growth areas. Biopharma is another one that continues to be a heavy growth area for companies. And all the while all we have to do that while responding to whatever our near-term demand is across our customer set and servicing all those existing customers that continue to buy from us.

The second one tethers back to something we were talking about earlier, Raj, and that’s new versus existing accounts. And again, you know, the focus has probably been a lot more oriented towards existing customers for sales and marketing teams. And they’re probably experiencing some burnout from that. But we also need to make sure that companies are flexing that new account acquisition muscle. And those were building up, I think, before the pandemic and the pandemic kind of stunted that a little bit just because of the need to focus on a lot on existing customers. Thoughts on that one, Raj. In terms of how companies are thinking about new customer focus.

Raj Sharan: Yes, Arshad. A client comes to mind. They basically have all the customers that account in their database, so to speak. But most of sales, it is typical 80/20 rule. In this case, it was even more skewed 90% of their sales was coming from 10% of accounts. So the long tail of customers that either was reactive or like almost no focus at all, like no sales over the past many years. So one of the big changes that we did there was we helped build an opportunity potential model. What that does is we use install bas, we used lost opportunity data, a couple of other elements there, to generate some insights for the sales team to identify new customers. I mean, it’s the list of accounts, but like basically untouched by sales. So in many cases, it’s a new account that they can go after and they’re actually seeing success already from this. The sales now has an opportunity pipeline that they are building. They’re going after new accounts, they’re building those relationships. It will take time, obviously. If you have to sell these $100,000-$200,000 instruments, it takes a while for that sales cycle to progress. But they’re already seeing a healthy pipeline built because of the opportunity potential model.

Arshad Carim: So that makes a lot of sense. A third key theme here tethers back to this idea of bringing science to the forefront, and this is, we mentioned, investment in these application, product, workflow specialists, etc. Making sure that you can make that connection with the customer at the science level and doing it in the right way. You mentioned the account management model example that a company was implementing, but also making sure I think they invest adequately and more in those other resources that can flank that account manager to give the expertise to the customer when they need it. In that deep sense around whatever they’re trying to do and to get to the outcomes. There’s also that continuity across the buyer journey where you’ve got resources that are connected to that customer as you’re selling and then post-sale, which I think was what you were describing also.

Fourth one is digital. A lot of momentum was created in the last 18 months around engaging virtually, engaging digitally with our customers because we’re forced to do it. That’s that was the nature of the beast in terms of what was happening. And so companies are thinking long and hard about how to take what they’ve learned and advance those capabilities that have been built, not only in the past 18 months, but over the last few years with what they’ve been trying to do. And keep that accelerated pace of change going, as it relates to digital, and to the learnings that they’ve gotten around how to engage virtually with customers. But I know it’s a point in talking with a lot of clients that they’re trying to wrestle with. They’re trying to figure out how much of it lasts. And there’s definitely some gravitational pull with some sales leaders around getting back to face to face and maybe wanting to restore that sense of that model. But more broadly as we talk to leaders, they don’t believe it’s returning to anything materially close to exactly what we had before. I think a lot of them say it’s going to be a new hybrid world. But what are your thoughts there on digital, virtual and what’s going on?

Raj Sharan: Yeah, definitely. I mean, if you ask the CFO is right, this is like the best state for them where they’re reducing the cost of sales, they would not want to go back to the old. So I know the CFOs will fight tooth and nail to allow their expenses to go back.

Arshad Carim: But they’re not cutting costs, right? They’re using that money to invest.

Raj Sharan: That’s true. A couple of companies come to mind in terms of how they’re thinking of digital and inside sales. So there’s a few different ways you can think about it. One is you can think about the expansion of e-commerce or digital inside sales. They can digitally-enabled internet sales with analytics and insights. You could have them focus on high volume transactional, low margin products that allows your field sellers or your more expensive resources -they could be high tech sellers, however you describe them – they can be focused on your top accounts are focused more on the complex instruments. So that’s one approach that you could take.

Arshad Carim: So we use it to solve that long-tail segmentation segment?

Raj Sharan: Of products, right? So the one vector is looking at the products. The other that companies are also looking at is could I segment my accounts and give the long-tail to inside sales or e-commerce? But those are trends that have been going for a while. The more interesting time recently has been moving to a model where you give the customer the option. So the customer can decide irrespective of their size. You can have a large customer who may decide that I prefer to engage with your insight seller. That’s just I have a lot of sites. They have a lot of different distributors, like labs, et cetera. I prefer dealing with an inside salesperson. And you leave that choice to the customer and the handful of companies who have moved in that direction. It’s definitely radical, but it’s working really well for them. And this is turning into a global trend not just focused in like Western Europe or North America. We’re working closely with the client right now in Asia, where, as you know, Arshad, it’s a very distributor-heavy model. But even there, the distributors are seeing the writing on the wall that they have to become digitally enabled to be successful in the future. They cannot continue the existing model. So even their companies are moving to digitally enable their distributors or they have inside sales calling on customers to sell with the distributors. So companies are trying different models in terms of engaging with the end customers and distributors are on board. Most of the distributors who see the trends are on board and the rest of them, I think they will have to get on board or they’ll be left behind.

Arshad Carim: Yeah, makes a lot of sense. That indirect channel is so critical to many company’s business models and the digital revolution is not only for the direct model. So we’ve got to make sure we enable that channel partner set as well.

Good. Well, let’s round out with our fifth and final key trend or theme here, and that’s around protecting the commercial team. And this goes back to the comments about the great resignation and the talent and job mobility that’s going on. Generally speaking, we’re hearing about 10-20% higher turnover versus the baseline right now. And you know, companies are losing people to hot, new startups or fast scaling well-funded companies. It’s all over the map because of the opportunity that’s out there. And because of the knowledge and experience that many of these commercial resources bring and can offer. So what are companies doing? Yes, there are financial aspects to this, and yes, companies are employing things like retention bonuses or short-term cash incentives. Those types of monetary aspects that can help with retention. But more and more, we’re also hearing about other non-monetary aspects to drive that retention, to drive that protection of the team. And it can be things like more and better coaching, better relationship with managers and what the manager is providing from a value perspective to make me as a salesperson potentially more successful, training, different types of goals, different development opportunities. If I’m viewed, maybe as a leader, can I take on something else that’s different and new? And can you train me up on some of the latest new science and technology so that I can be kind of on the forefront with the company? So we’re seeing more and more of that opportunity helping to drive this idea of tethering people to the team. Helping to assuage the turnover issue and align with the culture of the company and keep people there longer, which I think is a really important aspect as we have all this opportunity out there in the marketplace. Any final comments on that one, Raj?

Raj Sharan: I agree. I think the one big thing that we have started to see a lot of both in life sciences and in the tech vertical is this emphasis on career development. Part of that is, as you said, there’s only so much you can do in terms of compensation and quota and incentives, right? In the end, it comes down to people having the right experience, like the right managers and having seen a career path for them within the company. And so that is definitely an emphasis that companies are placing to clearly define how they can move vertically within the company, but also horizontally. For example, if they need to change roles, what are those opportunities that exist within the company so that they can be successful and stay longer with the company? So that even if you end up losing them in terms of like a sales role, at least you keep that talent within the company.

Arshad Carim: Great. Well, it’s been a great conversation. Thanks for joining me, Raj. Thank you all for listening. And we appreciate it. If you’re interested in hearing more about what we’re learning, about our benchmarks, about the practice that we have at the Alexander Group around Life Sciences and Analytical Instruments, please reach out at our website, www.alexandergroup.com. We’re happy to schedule a complimentary briefing or if you just want to learn more about our Life Sciences practice and the events that we’re holding. We’d love to hear from you.

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