2025 Market Predictions
As we venture into 2025, the life sciences tools and services industry is poised for continued transformative changes. From heightened cost sensitivity and streamlined workflows, to the evolution of go-to-market strategies, the landscape is shifting rapidly. Sales teams are being redefined, with a focus on talent and effectiveness, while modern marketing investments are transforming the way businesses connect with their customers. The rise of protectionism is also reshaping the landscape, pushing for local manufacturing in powerhouse markets like China and India.
These five market predictions paint a vivid picture of an industry ready to embrace change and thrive in the face of new challenges:
- Customers expect value – cost sensitivity, simpler workflows and productivity of product are all critical value drivers
- GTM evolution – suppliers will continue to tailor their GTM models, focusing on end-market and segment-focus differentiation to capture share
- Sales effectiveness – sales teams and first line sales managers will go through talent overhauls, where companies focus on getting “back to basics”
- Modernized marketing – investments are replacing traditional sales headcount, as B2B buyers expect a fluid omnichannel experience
- Protectionism will expand – local manufacturing is needed to win in markets like China and India
1. Customers Expect Value
Life sciences tools and services customers continue to navigate tighter funding (flat in U.S., decreased in Europe), higher interest rates, and geopolitical and legislative pressures. This requires customers to prioritize different value drivers during the buying process.
In recent voice-of-customer (VOC) interviews by Alexander Group, customers voiced price sensitivity as one of their primary value drivers for making a purchase. Customers have also voiced efficiency, like simpler workflows and speed of results as other factors of importance.
Another differentiator may be staff augmentation for labs or Applications-as-a-Service (AaaS). There are thousands of experienced field application scientists that may be used in customer labs to bring best practices, expert advice and workflow efficiencies as-a-service.
2. GTM Evolution
In 2025, the life sciences tools and services industry will continue to embrace a customer-centric approach, with sales account managers transitioning to a full portfolio-focused model. This model enhances customer relationships and maximizes lifetime value by providing a single point of contact who offers a comprehensive range of products and services.
Sellers will specialize by segments and geography (e.g., Biopharma focused sellers in Boston, Energy focused sellers in Houston). The investment in specialization roles such as market specialists and field application scientists ensure that customers receive tailored, innovative solutions.
Life sciences companies will continue to adopt advanced sales compensation strategies that reward overall portfolio success, reflecting the industry’s shift towards holistic customer engagement and strategic growth.
3. Sales Effectiveness
Two years ago, Alexander Group posted an article called Q1 Softness Unveils Sales Atrophy. The article described recent sales leader feedback that their sales teams were struggling in front of customers. Sellers became comfortable selling via TEAMs and were struggling to differentiate themselves from competitors in-person ever since customer budgets were tightened and scrutinized.
Two years later, sales leaders continue to voice their concerns about their sales talent. This includes individual contributors and their first-line sales managers. Individual contributors are struggling with engaging customers in-person, navigating complex broad portfolios while understanding customer needs, and creating territory and account plans. Sales managers are struggling with forecasting and demand planning, being a strong coach and mentor and holding under-performing sellers accountable.
This year, suppliers will implement a rigorous process to enhance their sales talent profiles. This initiative will focus on understanding current competencies and skillsets, evolving training modules, and launching new sales leadership academies.
4. Modernized Marketing
Traditional reliance on simply adding sales headcount to achieve growth objectives will give way to investments in modern marketing and key sales enablers that can create broader value and ROI. Greater sophistication in demand generation techniques and tools, better digital engagement options for buyers (e.g., think interactive product configurators like build-your-car sites) and better investments in more personalized and smaller customer/prospect-focused events will all receive greater attention and investment dollars. Lab buyers no longer rely on sales reps for traditional product information that was once stored in their heads or on glossy sheets.
Today, the true value of interacting with vendor personnel lies in solving customer problems, completing workflows, advancing scientific outcomes and producing better drugs. AI tools will become more prevalent, significantly impacting seller time by freeing them up to engage with customers and address issues.
This shift will necessitate a talent overhaul for some companies, requiring them to upgrade the competencies and capabilities of both their sellers and managers.
5. Protectionism Will Expand
The trend of economic decoupling and protectionism is expected to accelerate in 2025 with the new administration in the United States. Companies will continue onshoring or nearshoring manufacturing operations to mitigate the impact of high tariffs. The adoption of advanced automation manufacturing technologies will help to offset some of the increases in production costs in a high-cost country like the U.S. high-value product vendors are poised to benefit the most, while those dealing with commodity goods will likely experience a decline in profit margins.
On the international front, China will remain a significant market for life sciences companies, despite a slowdown in growth compared to previous years. China recently unlocked a flow of stimulus funding, which suppliers saw as a positive sign in Q4 2024. This trend is expected to continue, with more stimulus anticipated through 2026.
To maintain competitiveness, firms will need to expand local manufacturing capabilities within China and neighboring regions. India also presents a robust growth opportunity, driven by the expanding middle class and their increasing demand for high-quality products and advanced healthcare solutions. Establishing and expanding local manufacturing in India will be essential to remain price competitive and capture a substantial share of the market.
Get Ready for 2025
The life sciences tools and services industry will continue transformative initiatives to balance the needs of the customers, the company and their colleagues. As companies navigate cost sensitivity, evolve their go-to-market strategies and modernize their marketing efforts, they will need to adapt to the changing landscape. Focusing on local manufacturing in key markets like China and India will be crucial for maintaining competitiveness.
By embracing these market predictions, companies can position themselves for success and drive innovation in the industry.
Need Help?
For life science organizations looking for new ways to enhance their organization in 2025 and beyond, contact an Alexander Group expert to learn more.
