Tradeshows can be a great place to get the word out about your product and also to keep abreast of late breaking news, trends and opportunities. However, they can also be very expensive. Registration fees, travel costs, shipping and other logistical costs, not to mention opportunity costs by having your sales team out of the field for a few days, add up fast.
Don’t just attend, participate!
It is important to identify all of the tradeshows and conferences that will be good sources for customer leads. Note that I said ‘good sources for customer leads’ not just which events you think your customers will attend. Some tradeshows and conferences, although excellent events for scientific exchange, are less than great places to make meaningful contacts with potential customers. Determine which events will have the most value for you by attending as many tradeshows and conferences (as an individual not as a vendor in the beginning) as your budget and time will allow. Make sure to plan time towards the end of the event to speak with some of the people manning the vendor booths. Be sure to speak with a representative sample of vendors to get an overall but relevant sense of how valuable this event has been for them in terms of identifying good sales leads (both quality and number). Be sure to attend some of the scientific sessions and especially the poster presentations of those researchers that could become some of your first customers when you launch.
When Attending Prior to Your Product Launch
Talk with vendors about how valuable they think the show is. (Do this towards the end of the show but not at the very end)
Visit the posters of researchers that you think could be customers for you and find out if the problem you plan to solve with your great product is appealing to them or not and why. (Don’t propose your solution yet) This can be a great way to start narrowing down what the minimal performance characteristics and features are that your product must have when you launch. You will also get a sense of how well your offering will be received if and when you host a vendor booth here in the future
Take advantage of the fact that this can be a great place to set up meetings with key people that will be important for your business since they might also be attending the meeting.
Post Show – Get all of the contacts that you made into a database and follow up with a brief thank you. (MS Excel spreadsheet is more than enough for this at this point)
Post Show – Use your meeting value assessment (see above) to rank all of the shows you attended based on how valuable they would be for getting customer leads (The conference at the top of your list will be the one that you should plan to use as part of your launch strategy)
When Attending After Your Product Launch
Before the Show – Be sure to have a customer lead follow up plan for how all leads will be handled after the show and by whom
Have sales team and/or product management manage the booth
Have your booth staff rate the value of each contact they make immediately after meeting them. For example: add an A, B or C next to each new contact using your lead capture system to aid in your post-event follow up. Put an A next to those that could be customers in the next 30 days (First follow up group), B next to those that would be customers in 60 days (Second follow up group) and a C next to everyone else
Continue to visit posters and get feedback on the problem your product is solving. This way you will be on top of important trends that will guide the next iteration of your product, modifications to your sales value proposition and other positioning materials based on what you learn
Measure your brand strength. When meeting with people at the booth or at the scientific sessions, ask ‘Have you heard of ‘your company name here’ before?’. If they have, ask what they think about it. Don’t correct them if they get it wrong. Just collect this information for now (The first time you do this can be a bit discouraging but you will be setting a baseline, If you are doing things right, you will notice a real improvement at next year’s tradeshow.)
Some conferences and tradeshows that were initially valuable may not be worth the expense in later years. Meeting agendas change as do the attractiveness they have for your customers. Getting in the early habit of doing a post-event value evaluation after every tradeshow or conference will insure that your time and money for this are maximally rewarded. As your budget for meeting attendance grows, consider reserving some of this to attend new events that could have a better return on your investment.
Working with Distributors can be a great way to expand your sales reach as you grow. This can be a very effective way to ramp up sales especially when you look to sell internationally. It is important to have a good understanding of how best to support, motivate and manage your distributors prior to your product launch to make sure that you get the biggest bang for your buck here.
A few myths
Hire them and forget them. Your distributors will require training, sales collateral and on-going support to be successful. Whether you have a direct sales force or a distributor, they both require the same level of sales and marketing support. In addition to this, you will likely need to plan on refresher training and customer visits with your distributors over time as there is turnover in their sales team and also to keep them motivated.
They will be excited to sell your new innovative product. The business team that sold you on the contract will be excited about your product and its business potential. The distributor’s sales team, not so much. An unfamiliar new product takes time and effort to learn how to sell effectively. When the distributor’s sales team member has a choice of selling an existing product versus a new one, everything else being equal, they are more likely to focus on what they already have confidence in selling. Consider offering cash or other incentives for early sales for a period of time. Once the distributor’s sales team has some success with your product, this challenge will become less of an issue.
Distributors will be less work than a direct sales force. (see the first point in this list) You will need to plan regular update meetings with your distributors to monitor progress and help them to succeed with your products. In the early days, you will find that you need to provide more support to your distributor’s sales team as new sales people call with questions or issues. With a direct sales team, you will not have to constantly deal with the same questions and issues.
If you sign on with a big distributor, you will instantly have hundreds to thousands of sales folks selling your product. The distributor’s business team will brag about the enormous size of their sales force, in practice the number of sales people that will actually learn and sell you product will be a fraction of that. If you are lucky, you will have a few talented sales people that will have early success with your product. They will tell their colleagues about this and interest in selling your product will increase throughout the sales force. However, you need to make sure that you are not taken in by pronouncements of how ‘thousands will be selling your product every day’ this just is not true.
You can count on the experience, reputation and size of a distributor to mitigate some of your sales risk. You can never outsource risk! This is as true of sales as it is with any other risks that your business will face. You will need to work with your distributor to help mitigate the risk of poor sales. It doesn’t really matter if it is your own sales force or the distributor’s that is not closing sales. In both cases there is a problem that you will need to address.
The number one thing that you can do to insure a good experience with your distributors is understanding that you will be expending a significant amount of time and effort (especially in the early days of the relationship) helping them to be successful with your product or service. Whether you have a direct sales force or not, you will still need to plan on producing teaching materials and conducting training sessions so that your distributor’s sales force has a good understanding of your product and confidence to sell it successfully. You will also need to provide them with a clear point of contact in your company that will handle all questions, concerns and technical issues in a timely manner (recommend that this be the Product Manager not one of your Sales team members). You will also need to plan to travel with your distributors on a regular basis to insure that you are meeting their customers. This will allow you to get critical customer feedback as well as motivating the distributor through demonstration of your commitment to support them. Traveling with your distributors also allows you to further strengthen your connection with them and show them that you are not only actively managing them but are open to helping them be more successful. In time, a supported distributor will put increasingly more effort into generating the leads and winning the greater numbers of sales that you expect.
Other advantages Not all products are ideal for distributor based sales. If your product is truly ‘game changing’ and requires a very technical sale, you will likely be better off with a direct sales force, at least in the early days after your product launch. Once you have established enough sales with your direct team so that you have a good understanding of your ideal customer demographics, the most successful tactics for discovering and reaching them and the value proposition that has proven to be most effective, you are ready to consider bringing on a distributor to augment your sales efforts.
There can be many other advantages of brining in a distributor other than expanded sales reach. Keep the following in mind during your negotiations with prospective distributors.
Forward stocking locations: This can be a particularly valuable asset to have when you start selling overseas. Having your product warehoused in the same country where it is sold will insure timely delivery to your customers without the unpredictability and delays caused by getting through customs. Being able to maintain stock at your distributor’s overseas warehouse will also allow you to take advantage of cheaper (and slower) shipping options like having your product delivered to them by ship rather than by air.
Shipping and handling services: Distributors, especially larger ones, will be able to use their size and expertise to significantly reduce the costs of shipping and handling. Your distributor already has the infrastructure and expertise in place for this, better to take advantage of this in the early days and save your money for other business expansion activities than customer fulfillment.
Marketing and Lead Generation Services: Many distributors have their own Marketing Communications teams. They can promote your products in their own marketing literature, at tradeshows or generate literature that has been translated for use with international customers.
Localized Promotions: A good distributor knows the regional and cultural cues that will be most effective for your customers in their territories. Work closely with your distributor to prepare custom promotions that are designed to appeal to their customers. Discount and loyalty programs that are prepared for local and regional audiences are always more effective than a ‘one-size-fits-all’ global campaign.
Investing in the tools and resources that will be required for an effective missionary selling campaign will help your customers see the light!
Having a truly innovative, disruptive technology or service is both a blessing and a burden. A blessing in that you can ‘own the market’ for a period of time if you successfully launch and grow your business. (This is the good side of being first to market). The burden is that achieving a successful launch and growing sales effort will often face entrenched skeptical attitudes and outright hostility from the very people you hope to reach with your new offering (The downside of being first to market).
Why does customer resistance exist with innovative and disruptive offerings?
If you have a truly new offering, much of the resistance can come from a lack of understanding of the positive impact that your products and services will have for them. Some may even feel threatened by the new offering if it would seem to decrease their own power or influence particularly when it allows lower skilled workers to produce equivalent or better results once restricted to this individual by their having a ‘hard won’ skill or talent. This means that your company will need to expend some time and resources to develop an education component to its Sales & Marketing efforts. This will help transform skeptical leads into satisfied customers. This is often referred to as missionary selling (and marketing).
“A missionary type of sales job involves convincing someone who has never used a product to buy it. Selling financial planning or life insurance and other financial products typifies the missionary sales job. The metaphor of a missionary involves educating someone about an idea or concept and convincing them to have faith in that concept.” (Answers.com)
What’s an innovator to do?
The rewards of being first to market with a disruptive technology can be significant in financial terms to say the least. Being aware of some of the resistance that you might face even early in the game will allow you to craft a launch and Sales & Marketing strategy that will be able to handle the additional education burdens that this opportunity presents. Eventually the burdens of missionary selling will decrease as your customer base grows and evangelizes your innovation.
Tips for Successful Commercialization of Disruptive Life Science Offerings:
Prepare a Scientific Road Show to connect with scientists through their research. You have some great science. Why not leverage that to connect with other scientists through their research. The questions and conversations that will come from this effort are invaluable for tweaking your ‘go to market’ strategy (See ‘Taking Your Show on the Road: Using Your Science to Boost Sales’)
Use a Key Opinion Leader (KOL) plan to help smooth your launch. Key Opinion Leaders can be a strong force for reinforcing the value of your innovation to the field. (See ‘The Key to Key Opinion Leaders’)
Invest time and resources to creating scientific content that will be compelling to your future customers. Consider starting an application focused blog, write white papers and present at industry conferences in the scientific forums. (See ‘Where Does the Science Belong in the Life Science Startup?’)
Paying attention to these 10 essential elements for a successful startup will greatly increase the prospect that you will get your hands on these keys!
Transforming breakthroughs from the lab into successful companies is a daunting but ultimately rewarding task. For some, there is no better validation of the quality and value of their scientific discoveries than the kind you get when it generates demand from paying customers. However, according to Shikhar Ghosh, senior lecturer at the Entrepreneurial Management Unit at Harvard University, 75% of startups fail largely because they have neglected one or more of the 10 essential elements of successful startups.1
The 10 Essential Elements of a Successful Startup Are:
Compelling Value Proposition: Having a great idea or discovery does not always mean that you have a product or service that will generate the customer demand required to sustain a business. Having an experienced Board of Advisors can help you figure this puzzle out and will also provide you with the introductions to the industry experts and Key Opinion Leaders you need to feel confident that you have a viable business hypothesis.
Capital: How much money will you need to keep your operation running until you start to generate revues? How will you fund the company? Grants, Foundation money, investments and bootstrapping are just some of the ways that entrepreneurs get the funding they need to get their product or service to market.
Key Resources: You need key people on your founding team with the technical know-how and business sophistication to shepherd you company from the early days to a real going concern. In addition to the people, you need to make sure they have access to the resources they require to succeed like adequate lab space, access to equipment, reagents, regulatory guidance etc.
Key Activities: Seems like an obvious one. It is critical to develop a detailed roadmap that describes all of the strategies, tactics and activities that need to be successfully completed to reach your ultimate goal for the company. This plan will include critical milestones along the way so that the team can monitor progress and make course corrections as needed. Also, this plan will allow you to develop a realistic budget which will help you to mitigate the risk of running out of capital before you have achieved a successful launch. The best roadmaps break this down to enough detail to guide not only month to month activity but day to day efforts as well.
Cost Structure: After you have launched your product or service, your focus now shifts towards expanding profitability. Your Operations team will be looking to reducing the costs of providing your product while your Sales & Marketing team will be executing on tactics that will bring in significantly more leads, and more sales.
Key Partners: You don’t need to go it alone. Establishing strategic partnerships can help you expand your market reach when you set up co-marketing agreements and save capital when you share the cost of space, equipment and other resources that you can both profitably share. Your team will also benefit from the experience and perspective of your partner as your relationship grows stronger.
Customer Segmentation: This is something that needs to be started way before you are even ready to sell. It is important to know both who will want to buy your product as well as who will not. This will not only help you with your marketing efforts but will also insure that you build the right offering.
Demand Creation: Once you have a good idea who your customers will be, figuring out how to reach them and what message they will find most compelling becomes a lot easier. Running an effective beta-evaluation with perspective customers will provide you with key insights that will go a long way to insuring that you have a strong product launch and have a Sales & Marketing plan that will quickly scale up to meet the business growth goals you have set for the company.
Sales Channels: Having a well thought out Channel Management plan will greatly increase the chances that you will have a strong launch. It is important to know how you will sell to your customers and then develop the resources and team that will allow you to execute this well. Different channels have different demands and processes. Be sure to consider whether you will be using a direct sales force, distributors, a combination of the two and how that would work etc. Don’t’ forget to consider e-commerce!
Revenue Streams: Another seemingly obvious ‘element’. Don’t’ forget that you can get revenue for intellectual property that you can monetize through licensing fees if you don’t commercialize it. Be sure to consider other ‘products’ like extended warranties, service agreements and advanced training offerings for example. There are many ways to generate revenue besides what you get from sales of your core product or service.
Making sure your Founding Team has the expertise to manage the “10 Essential Elements” is the best way to improve the odds of success for your startup.2
The Secret to Getting this Right
The secret to keeping on top of all these ‘elements of success’ is having a founding team with the depth and breadth of experience and know-how to cover all of these areas. Each ‘element’ can require very specific skills and tactics. Furthermore, it is critical that these are customized to fit the particular needs of your company. The other thing to keep in mind here is that these ‘elements’ are not static in their timing and demands for resources. Having at least a few team members that have done this before will insure that you get all of this right. Founders should look to establish a Board of Advisors very early on to help manage all of this and or help you to find these key people for your founding team.
Beta testing done right can significantly improve the chances that your product launch will be a success. When done wrong, this can be a terrible waste of time. With this in mind the following checklist should keep your team on track for a successful launch.
Select a technically savvy Product Manager or BD guy to lead the Beta Testing, not someone from the R&D team. The purpose of the beta is to confirm that you have created the best product to meet the needs of the customers you plan to target. The intent here is not to modify the product, but to adjust the type of customer that you will target at the product launch. Technical feedback will be shared with the R&D team but this should be viewed as a commercialization effort.
Identify a number of prospective Beta Evaluators that closely match the demographics of the customers you hope to win.
You want to select those evaluators you believe will typify the customers that will purchase your product. Keep the number as small as possible but large enough so that you get at least one or two evaluators who do not like your product (it is just a vital to know who your customer isn’t as who they are).
Prepare Launch focused survey instrument.
It is important to find out what each tester likes about your product as well as what they don’t. This should not be a complicated or long survey but it should probe deep enough to give you insight on how to modify your positioning, marketing, technical support and their view of the competition. This can be completed informally in a discussion or by asking to have the evaluator fill this out directly.
Contact prospective beta evaluators and get commitments from them on what you expect them to do for you including timelines.
Select the fewest number of beta testers that will give you the information that you need to insure a strong launch. Managing this effort can be very labor intensive and can include travel and other expenses. Keeping the number smaller will allow for a more manageable effort.
Collect feedback testimonials to support your launch.
Online surveys are OK. However, the best way to do this is by meeting with the beta tester face to face. You will get much more information and it is easier to get a testimonial or two from happy testers when you are meeting with them.
Convert as many beta testers to paying customers as possible.
One of the best measures of a successful beta evaluation is when the tester wants to continue using your product and is willing to pay for it. It is easy to tell someone that they have a great product but there is no better validation than someone that is willing to back that up by purchasing your product. Offer to sell them a unit at cost (if an instrument or piece of software) or at a deep discount on their first order if this is a consumable.
The quality of the interaction your customers (both current and future) have with you in the early days of your company can be a powerful differentiator in the long term. In fact, establishing a high level of customer care is something that startup companies with small customer bases have a decided advantage over larger competitors. When you have only a few customers, you are able to actually speak with them on the phone to ease purchasing or handle technical issues. Doing this in the early days can help to create a group of evangelists for your product(s) that will generate the kind of positive publicity that will help you win new customers and successfully compete.
Hold onto this advantage by growing with your customers
All of this may seem pretty self-evident. However the key here is to make sure that your customer care efforts are scalable. In the beginning, you may be able to plan visits, schedule direct meetings with your lead R&D team members and other activities that will delight your first customers. However, these types of interactions are costly (with regard to time, effort and money) and are likely not sustainable as your customer base grows.
Maximizing your customer relations efforts
Use your early effort-intensive efforts to learn what particular customer relations efforts are most valued by your customers and begin to plan scalable, sustainable and cost effective alternative that can grow along with your increasing customer base. Doing this early, will allow you to plan for the budgets, human resources and other efforts that will be required to maintain this.
The following list of Customer Relations Tactics is intended to kick-off the thinking that will lead to a winning strategy.
Smooth purchasing process
Small Customer Base: Every order handled in-person or by phone
Larger Customer Base: E-commerce, ‘Click here for quote’ button on online store, hire inside sales dedicated personnel
Caring technical support
Small Customer Base: Every issue handled in-person or by phone
Larger Customer Base: FAQ’s on website, ‘How-to’ videos, hire dedicated tech support personnel
Small Customer Base: Encourage customers to call you with any issue anytime
Larger Customer Base: Encourage customers to contact via email, hire dedicated tech support and/or inside sales personnel to handle calls
Insuring customer satisfaction
Small Customer Base: Check in with all customers by phone or in-person
Larger Customer Base: Check in with a customers by e-mail (automatically set up at the time of sale), periodically send out satisfaction surveys, randomly select a subset of customers for calls by dedicated inside sales personnel.
One of the best ways to validate your new technology with your customers is with publications (especially those of happy customers). What do you do when you don’t have them yet? Key Opinion Leaders or KOLs can be a great resource for getting things moving in the early days before there is a compelling publication record.
Who are they?
Although most scientist-founders will easily be able to name the key people in their field, it is important to find out who your future customers regard as the Key Opinion Leaders. Set up meetings with your customers, face-to-face if possible, over coffee, in their labs, at trade shows and everywhere and anywhere that you can. You want to generate a candidate list of about 10 – 15 Key Opinion Leaders. During this discovery process, be sure to ask who the ‘up-and-coming’ leaders in the field are as well. The top people can be fickle as they are courted by many whereas the leaders of tomorrow tend to show more loyalty (The up-coming leaders will likely value the relationship more since it can have a bigger impact on their own careers).
Who gets what out of this?
Your goal is to develop a relationship that you and the Key Opinion Leader highly value. When you and your company are valued, the Key Opinion Leader will talk about you at industry conferences, provide valuable insights on what the key issues in the field are and many other tangible and intangible benefits that will help you with your product launch and even early sales. Putting some thought into what you hope to get out of the relationship as well as the benefits for the Key Opinion Leader are essential to maximizing this effort. The two lists below are some examples of the types of things to be considered.
What They Get from You
Free conference attendance and travel
Early access to instrument or product
Free instrument, supplies etc.
Completion of a small study by your R&D team on their behalf
Increased visibility among their peers as you promote them
What You Get from Them
Keynote speakerships at tradeshows
Completion of a small study on your behalf
Testimonials for your marketing team
Publications with your product (eventually)
Early insights in the field with regard to trends and opportunities
Ready, Set, Go!
Now that you know who the Key Opinion Leaders are that your customers most highly regard and what you will do for each other, it is time to reach out to them. These early discussions can set the stage for how well this effort will turn out for both of you. Share with them what you hope to gain and what they could expect to gain from the relationship. By the end of this you should have agreement on outcomes, timelines for when you and they expect to deliver on your commitments, how any issues that come up should be resolved and how frequently you will connect to discuss progress (aim for at least once a month if not more). Having a plan like this in place at the outset will insure that everyone’s expectations are in line and will give you the best possible chance for a successful outcome.