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Insight & Intelligence : Feb 21, 2011
Marketing Innovations for Biotechs to Increase Revenues
Looking outside the industry can bring breakthroughs.!--h2>
McDonalds, the fast food giant, credits half of its yearly $23 billion in revenues to the drive-through. Interestingly, McDonalds borrowed the drive-through idea from banks who had created them nearly 50 years earlier. McDonalds continues to consult with companies outside its industry, like Disney executives, to discover how to move its customers through the drive-through lane more quickly.
Netflix revolutionized the movie rental business by ignoring industry norms and in the process drove Blockbuster into bankruptcy. Netflix gave customers the ultimate in viewing pleasure and convenience by borrowing from FedEx, United States Postal Service, newsletter publishers, and Apple.
The point is simple: if biotech firms are set on not just surviving but thriving in this economic environment, marketing innovation must take a front seat alongside product innovation. And, historically, companies can find innovations from outside their own industry. Numerous outside industries have followed four big marketing trends that have proven profitable. The biotech industry stands to learn from these initiatives.
Embrace Direct Marketing
In 2010, Deliver magazine, a 35-year-old publication based in St. Louis, MO, turned to direct mail to boost subscriptions and lower costs after seeing circulation drop 5% in the previous year. The strategy has been a sound one.
The magazine started mining their house lists more frequently and reached out to expired subscribers. Additionally, they are utilizing direct mail to push potential subscribers to their website to sign up, thus lowering costs.
Despite an increase in postage costs, many companies are still finding old-fashioned direct mail their most profitable avenue. Case in point is the Make-A-Wish Foundation. Elizabeth LaBorde, vp, recently said, “We are, as much as possible, using multichannel marketing—but most of our eggs are still in direct mail. We have been in the direct mail business for 15 years, and our most loyal donors are found through direct mail.”
Of course, following the principles of direct mail is what’s important. A company can implement the changes and test them online. If profitable there, it may be worthwhile to roll out the old-fashioned, postal direct mail.
The take home point is that with a still-sluggish economy, direct mail offers a biotech firm the ability to not only home in and market directly to prospects but to, more importantly, measure the return on investment of every marketing dollar they spend.
Capitalize on Email Marketing
While using email as a marketing tool is certainly nothing new, there’s no denying that it continues to grow in popularity. In fact, a recent study by Marketing Sherpa showed that 69% of companies put email marketing as something they will increase their budgets for in 2011 and beyond.
If a biotech firm is going to follow suit, it’s important that it knows the most effective strategies to getting emails noticed, opened, and ultimately acted upon. Newsletter publishers have performed numerous tests in this arena. One of the most valuable lessons they learned was the importance of the subject line in emails.
While industry averages for open rates hover around 20% to 30%, using personalization in the subject lines bumped open rates substantially. As an example, Aweber, an online email marketing software provider, queried its users and found that placing the date in the subject line can increase open rates to 51%. Messages with the prospect’s first name in the subject line can attain open rates of 40%. On the flip side, trying to over-personalize by putting the recipient’s first and last name in the subject line dropped open rates to the low 20% range.
Of course, use these as guidelines. Firms must test to reach their own conclusions. This only drives home the advantage of using direct mail.
Along with email marketing, website optimization is also high on many companies’ wish lists and will only grow in importance in the future. While websites are pretty much a requirement in the business world, few businesses understand the importance of optimization and what exactly to optimize.
Google has pretty much given all companies a guideline for basic optimization, and biotechs would be smart to implement these basic on-site changes first and foremost:
• Over the last five years website visitors have become even more impatient. Avoid flash animation and introductions if at all possible. The longer it takes for a visitor to find out if you can fill their need, the less chance you have that they actually hang around.
• Website visitors scan the screen, much like offline, from upper left to right and then down the screen. So, the hottest and most viewed part of a firm’s website will be the upper left. If a company has a product like a white paper, it may see an increase in opt-ins by placing its offer there.
Google has also made it known that off-site optimization is vitally important. This has to do with the number and quality of links pointing to a site. A biotech firm would be well served by implementing a strategic marketing campaign over the next 12 to 18 months to organically bring more links to its website. A proven way to do this is to have articles placed in related and respected journals and publications with a link pointing back to your site.
Additionally, the more quality content a firm has on its site, the better off it will be in the eyes of the search engines. A blog that a company posts to regularly or an email newsletter which is also archived on your site can work wonders in this regard.
The Social Media Question
There’s simply no denying that social media has been an absolute explosion, and more and more companies are keeping an eye on it. In 2010, Facebook surpassed Google as the most visited website on the internet.
But this begs the question: Can social media campaigns help biotech companies? To answer that firms must look at their current and prospective customers. While social media’s use is high, it’s often in the 18–34-year-old population and is most heavily used to keep in touch.
That’s not to say it can’t be profitable. Many consumer-focused companies including Comcast and 1-800-FLOWERS have documented successes. Others have noticed that social media doesn’t have the impact they anticipated.
For social media to be a viable opportunity for a biotech, there are some key points to keep in mind:
• It must be a dedicated strategy. Because social media is available 24/7/365, end-consumers often expect a response immediately. And, over time, the workload involved can be quite large. Comcast reportedly gets 60,000 emails per month as a result of its social media strategy. This can increase personnel costs.
• The exact strategy a company uses should be in line with its goals. For example: Comcast uses social media to handle customer service issues, while 1-800-FLOWERS is primarily using the media to drive transactions.
It’s been said that the reason something is an industry norm is because a company can expect normal results. While they are safe and comfortable, they have however ceased being profitable. Right now, with a number of biotechs reeling from the economy, healthcare reform, and regulations, it may be the perfect time to learn from outside strategies.
Curtis Alexander is a marketing strategist who helps biotechs increase revenues, lower marketing costs, and formulate plans for future growth. Web: www.curtismalexander.com.
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