Life Sciences Industry Trends
Eight Life Sciences Sales Trends From Alexander Group’s Research
Life sciences sales leaders face a consolidating, competitive and customer-driven landscape. Shareholders demand double-digit growth while customers want lower prices, more seamless channel experience and highly technical commercial resources that know their applications and industry. This new normal requires a go-to-customer model that is ready to compete in a complex, growth-constrained environment.
TREND 1: Segment Needs To Guide Go-to-Customer Design
Leaders are focused on new growth segments, no longer simply the academic research world. In the past, scientist sellers called on leading scientists in their fields with plenty of grant money resources. It was (and continues to be) a PhD-to-PhD conversation. While the research segment has cooled to some extent, companies still need to nurture this large and stable base business.
However, research is not going to deliver the 5-10 points of growth that CEOs and shareholders demand. Instead leaders are looking to applied markets, such as clinical, forensics and environmental, to drive new growth. Applied markets are littered with buyers who are not PhD scientists, but may include lab techs, procurement, or even the CFO or COO. These buyers are quite different and require the seller to understand new buyer journeys and value propositions in order to win their business.
As a result, you cannot go to battle with the same army. Companies need different sales and marketing people and new resources. For example, many organizations are hiring teams of strategic account managers who can manage large globally distributed relationships, develop sophisticated business cases and demonstrate enterprise-level problem solving. In this model, scientist sellers become technical product overlays and value-added advisors to customers; these scientists still sell the application and performance to ensure successful implementation, but they also provide application support. Your company may require a different field service model and supporting infrastructure than what is expected in research. Service technicians need to be highly responsive when serving clinical customers—often lives are literally at risk.
TREND 2: Geographic Segments Have Unique Dynamics and Require Aligned Models
What works in the U.S., Europe or Asia Pacific does not necessarily work in other geographies. Go-to-market models need to match customer demands, channel dynamics, government funding structure and local regulatory requirements. For example, the U.S. clinical market is distinct from the publicly funded European market. As a result, how you sell into each geography and market segment is specific. Leaders should consider buying preferences, headcount, resource types and language requirements. It may not be possible to capture the full market potential in an individual country: in smaller countries, organizations often must keep their sellers as “generalists” and cannot afford technical specialization.
To meet this challenge, companies are going beyond the basic account management framework to go-to-market cost effectively. While customers in key segments may need dedicated and high quality account management, the model may be expensive and unrealistic in many markets. For example, some companies remove account managers in smaller European countries because customers really value the language and technical specialization far more than a single point of contact.
It is a mistake to put in one global model. Companies that do so inevitably put market-specific models in place. Ultimately the company needs to show a depth of understanding of what customers want, as well as the coverage model that matches the revenue motions needed to execute and satisfy customer needs.
Trend 3: New Go-to-Customer New Business Teams for Aggressive Plays Against Growth Targets
SWATs are MBO-driven business development sales teams that “crack” accounts and new markets, growing business to a point at which they can transition accounts to the standard sales model of the organization.
Companies are trying to figure out how to fight more competitively for those relationships, for those opportunities. People are putting very specific SWAT teams, business development teams, in place in order to put more focus on new business. They’re also putting these teams, these business development or strategic teams around key accounts, so on the defensive. So you’ve got a very different go-to-market in the research space than you might for the growth markets.
These new SWAT teams are being put in places like forensics, clinical, or food and beverage. They’re putting them in place in order to supplement some of that industry or vertical knowledge. Very similar to what you might’ve seen in other industries as a vertical specialist, they’re putting somebody in a business development role that knows a lot about the industry, can warm things up, and the product specialists can bring in when it’s time to talk the talk of the industry.
Trend 4: Customized Sales Approaches to Penetrate Growth Segments
In the life sciences industry, there are two dominant channel or distribution partners that companies use in the U.S. In emerging markets, it is a lot of fragmented different third parties and distributors. And the labs, they rely on those as a single source to buy everything. They rely on them for supply chain and budgeting purposes. And so we might just worry about selling the box in. And if we get the box in, we’re confident that the customer and the research is going to turn the box on, use it, and we’re going to just allow the channel to passively sell in our consumables. So it’s reactive. Now when there’s no more filtered water or alcohol that’s needed to run the test on the shelf, well, they place an order with their channel partner, or the distributor. In the applied markets, it’s very different, because they might not know how to optimally run the experiment.
So you can’t just sell the box and leave it alone, because guess what happens? The boxes don’t get turned on. They’re not using them, they’re not working into their process to the rate in which they could. You’ve got to be constantly selling the technology, constantly selling the value. There’s this consultative role to demonstrate how you get the most out of your spend. And, you’ve got to stock the consumables. You got to push them to use the consumables far more than you might have to in the research setting. So very different dynamics. You also need a very different service model in those places, so that the revenue motions, or the way that you might approach these markets in a real practical sense, vary tremendously.
Trend 5: Field Marketing and Inside Sales Unlock Paths to Productivity
Field marketing has become an entry point into emerging markets. Companies are using this low cost role to generate relationships with key opinion leaders, target anchor accounts, build awareness and stimulate demand.
Inside sales creates capacity for the organization at large. These throughput office-based roles have increased capacity and can cover less complex products and transactional or geographically dispersed accounts. Companies can leverage these roles to work in tandem with other field resources responsible for lower value activities.
Trend 6: Maximizing the Value of the Service Organization
Field service engineers (sometimes known as remote technical support resource) are no longer just a “cost of business.” This elevated role provides an incremental source of revenue growth. The field service engineer not only conducts paid service but also pulls through after-market parts, consumables and service contacts. Companies are leveraging field service engineers for lead generation and after-market revenue.
Utilizing field marketing and inside sales to unlock capacity and maximizing the value of the service organization are two ways to achieve your revenue growth goals. Stay tuned for the next part of our trends series to learn more about how sales and commercial leaders are winning in this changing environment.
Trend 7: Shifting the Tectonic Plates of Life Sciences Sales Talent
Life sciences sellers commonly come from technical backgrounds with higher education degrees (like a masters or doctorate) and speak well to technical/scientific buyers. However, non-technical buyers (like procurement or finance) need professional sellers who can relate to and serve a broader base of call points.
It’s no longer enough to be a technical seller and sit in front of another scientist, and talk technical about the capabilities of the product, solution and output that it provides. Ultimately, Ph.Ds have been trained to be scientists and they’re better serving your business in that role. So, the paradigm has changed, the tectonic shift, as the trends suggest. And we need different types of sellers, we need to be able to answer the economic questions. Leading life sciences companies are changing the way they view top sales talent. The talent grab has begun for Ph.Ds that can bridge the business and professional selling gap.
Trend 8: The New Life Sciences Seller – from Ph.D. to Problem Solver
You have to think “How do you make the shift for the New Life Sciences Seller? And what does that really mean from the rep?”
Sales jobs are defined by customers, product and process. Today’s life sciences seller is evolving to be a problem solver that brings the full value of the company to the customer. It is no longer enough to sell Ph.D. to Ph.D.
The job of the future is somebody that talks to best practices, talks to insights, talks to performance and they bring in an application specialist. They bring in a technical seller for that part of the sales process that you really need somebody to run the demo. You really need somebody to talk to that user or that influencer that’s not necessarily an economic buyer.
And we believe that’s a far more scalable model that we’ve worked on with our clients in order to help them make that transition.
Summary
The experts in Alexander Group’s Life Sciences and Analytical Instruments practice have extensive experience, frameworks and benchmarks to ensure your go-to-customer strategy will allow you to meet the profitability and revenue growth needs of your company. Contact us today to leverage Alexander Group’s thought leadership for your commercial planning.
