Transforming Life Sciences Sales To Win in Applied Markets
Good anglers know you’ve got to fish with the right tackle. The right fly fishing rig is a great way to catch a trout, but if you’re going after tuna, you’ll need a completely different set up. For Life Sciences companies, it’s time to rethink what’s in your tackle box. The sales model used for years to win in Research markets won’t work in the Applied markets – Environmental; Food and Beverage; Clinical; Oil & Gas and others, which represent significant market growth opportunity.
Applied vs. Research Markets.
Research Markets: Research markets are traditionally made up of a few segments including Government (e.g., NIH), Academic, and Pharma/BioPharma. The business in each of these segments is often highly concentrated in a small number of accounts which can be covered with a modest number of product-oriented sellers. It’s not quite “shooting fish in a barrel,” but Research customers congregate, making it a little easier, like fishing in a “honey hole.” These sellers can typically visit with most of their target buyers each year by attending a narrow series of industry events and conferences. Research sellers are highly technical with in-depth understanding of how the product is used (applications). They have long-standing peer relationships, often serving as trusted advisors. They advocate for customers internally, pushing R&D and Product Management to invest in innovative features, precision and sensitivity.
Applied Markets: Applied markets are very different. They are fragmented, with significantly more accounts and a complex mix of players involved in the buying process. Buyers are interested in a value proposition that trades off innovative features, precision, and sensitivity for throughput, uptime and total cost of ownership. Applied customers are:
Price Sensitive: They are unlikely willing to pay for “value” in the Research sense. They operate on lower margins and negotiate aggressively to drive down price, often by asking to strip out unnecessary product features.
More Complex: Unlike Research customers, the user is rarely the sole decision maker. Instead, sellers must navigate a complex set of influencers including users, purchasing, finance, administrators and others. This calls for a more complex call plan for multiple buyer types and unique messages for each.
More Costly to Cover: Applied market buyers will not congregate for you at a few industry events. Although much greater in number, the buyers and influencers in Applied markets are spread out across various locations. This means your sales resources need to stretch further than today.
A Whole New Way to Fish. Many Life Science and Analytic Instrument companies have accepted this reality and are taking steps to evolve their sales models. Some of Alexander Group’s clients are deploying an “Account Manager” role, or even launching completely separate Applied customer sales teams. This is good – but these changes do not go far enough.
To win in the Applied markets, the necessary approach is not evolutionary but transformational. The sales model must be completely overhauled, and good execution is critical.
What changes are necessary to go after the Applied Markets?
A Mix of New Sales Roles: The Account Manager and/or a separate team represents a good step toward developing an Applied sales model. But it’s not a silver bullet. The model must also feature high reach and frequency resources like Field Marketing, Inside Sales and Sales Support. These roles help map the market, identify target buyers and generate leads. Most of these are not traditional marketing resources, jockeying with Eloqua or Marketo in a back office. They are sales resources with quotas engaging with the customer. Many companies have tried to deploy Inside Sales and have failed, miserably. If you have not had success with Inside Sales in the past, try using a third-party company, adept at this sales motion. Do not feel pressure to use this channel as a revenue-generating engine in the early stages.
New Sales Skills: In most cases, simply redeploying your legacy Product Specialist as an “Account Manager” or an Applied Representative is fraught with risk. Account Managers or Applied Representatives need far less technical depth. They know when to bring in Product Specialists to plug technical gaps during pre- and post-sale activities. Instead, they need professional selling skills. They must navigate the customer’s organization, dealing with multiple buyers and influencers. They are consultative and have excellent negotiation skills. It may not be realistic to think you can bring a whole new breed of resources into the organization to cover the Applied space. Maybe you lack the training infrastructure or the organization is not willing to bet on the come. In either case, you cannot expect your legacy resources to make the jump by changing their title and putting them through canned sales training. To gain traction you will need to combine training with manager coaching, goals and disciplined execution.
Overlay Specialists. The traditional, technically-oriented Research market seller plays a critical, but secondary, role in the sale. Applied Market sales models feature an overlay Product Specialist team – a big departure from leading with the technically-oriented seller. A cost effective model means keeping the right number of Specialists and expanding their role to provide a range of support to the Account Management or Applied team including pre-sale demos, technical acumen during pitches, post-sales customer set-up and technical sales training.
How to Effectively Execute the Model?
Invest in Market Research and Opportunity Modeling: Most companies woefully lack adequate knowledge of account locations, buyers and other important target customer details required to facilitate the sales effort. Field Marketing, Inside Sales, Sales Support or even Interns should be tasked with mapping the universe of potential accounts and populating account data. Develop new proxies for opportunity to help determine which accounts you will focus on and where you will deploy resources.
Segment Markets: High-level Applied categories like “Clinical” are not specific enough. What does Clinical mean? It could refer to Reference Labs, Acute Facilities, Testing Sites, or more. Are all these types of accounts created equal? Take a more sophisticated view of market opportunity – industry + potential + application + buyer profile. Sellers need to be pointed to the right types of accounts and buyers.
Define Sales Motions for Each Buyer Type: The most obvious change is the number of buyers involved. You need an approach to reach both scientists at the lab bench and purchasers at the negotiating table.
Have a Playbook: You can’t afford to have expensive sales resources knocking on doors. At the same time, you will never achieve your growth goals by relying solely on classic marketing techniques, i.e., waiting for customers to call you. Instead, design and run a series of programmed sales plays with a regular cadence – (1) marketing campaigns to get the message out, (2) inside sales calls to qualify opportunities, (3) account profiles and opportunities entered in CRM, and (4) qualified opportunities transitioned to the field for high-touch pursuit.
Take a Disciplined Approach: A passive approach to Applied markets won’t work – the stakes are too high. Pressures to grow top line combined with the thinner margins in Applied demand a strong execution model. Managers cannot be super sellers – they have to run the machine – they have to manage. Their job needs to be defined by a disciplined set of activities – developing a strategy for achieving goals in their geography, building and maintaining the pipeline, helping sellers progress deals, and analyzing data and reports to identify blind spots.
Conclusion. Selling to Applied markets is different and getting traction in the space not only requires the right products, but the right sales model and strict execution. Your tackle box is likely stocked with what it requires to win in Research. Do you have the right gear to reel in the Applied customer opportunity?
For more information about how to win in the Applied markets, visit our Life Sciences practice page.
Matt Greenstein is a principal based out of the New York office. He works with clients across technology, life sciences and healthcare. He has responsibility for leading the firms Life Science and Analytical Instrument and Digital Transformation practices. His areas of focus include large scale transformation and integration across all commercial functions–tactical marketing, sales and service. Matt has global consulting experience and is known for his fact-based, hypothesis-driven, problem-solving style.