innovation

Cultivating Distrust

As strategists and marketers one of our more complex tasks is to listen to customer feedback, probe market dynamics, understand competitive intent, divine replacement or disruptive technology and synthesize the varied inputs into actionable information for the business.  My experience has been, however, that even the least xenophobic teams trust too completely in their own data and their own framing of market and customer dynamics, which leads to numerous strategic and marketing errors of omission and commission.

Take for example the dutiful front-line marketing team which shares at company meetings first-hand accounts of deals they won and lost.  The stories are captivating and no doubt provide insight into operations, science/engineering and other teams who rarely have the chance to directly observe the real-world dynamics of their product deals.  We know, however, that there is bias in the selection of which deals to present to the audience and that a few instances of competitive dynamics is not data but mere anecdote, no matter how well intentioned.

What about the team that does more systematic sampling of wins and losses, convincing the sales force to document the final disposition of all deals from their funnel on a quarterly basis.  Can we trust this information?  While having more data points and in theory, not being selective which deals to include, is clearly moving in the right direction, the source of bias is the sales rep making the observations.  Anyone who has been through this exercise make recognize the top 3 reasons why “we” lose from this type of analysis:

  1. Customer relationship with the competitive account manager
  2. Lack of product performance/features
  3. Price

It’s not that the sales team is intentionally trying to skew the data, nor that marketing teams believe that this is necessarily the best method to collect deal dynamics.  Nevertheless, our not wanting to rock the boat by putting an objective, market research firm at the helm of collecting information directly from the customer trumps our own instincts to distrust the information we’re gathering.  Worse, folks further from strategy and marketing may end up feeling good about the collected data and be even less suspicious of their own plans and strategies which align with the “data”.

I am always mindful of the elementary school biology example of the frog placed in a shallow pan of water on the stove.  The frog does not jump to safety when gradual heat is applied to the pan.  So how do ensure we can take the mental leap out of our own business to think objectively about the opportunities and issues facing the company?

It’s a slight shift in focus, from trying to find the right data and answers to finding the right questions.  The right questions are always more valuable than answers.  Remember your inner three-year-old and follow your why!  A few other tips to cultivate healthy distrust:

    1. Seek out customers who purchased in the past but haven’t bought recently.  Ask them why they’ve stopped buying and if there’s anything the company can do to earn their business in the future.
    2. Stay close to technical support and customer service.  Repetitive issues, even at low levels, are the smoke that can sometimes lead to fire.  Remember that the customers that reach out to you are just a portion of your dissatisfied customers.
    3. Use 3rd party market research firms to conduct win/loss studies, surveys and focus groups.  Try to understand if your value proposition is still relevant, credible, distinct and positively impacts purchase intent.  Watch the win/loss trend line over the year.  Seek out unaided impressions of your firm vs. the competition.  Try using QFD to understand what the customers values most when selecting your product vs. the competition.
    4. Travel with sales on customer visits.  See if you can bring you to an unhappy customer, not just the best and brightest account.  Even better:  have them bring you to the customer who is a die-hard fan of the competition!

If you can sit with objective data and resist drawing conclusions for as long as possible, ask a lot of questions, listen and observe deeply, cultivating an outsiders mindset, you will always find new opportunities for improvement and growth….that you can believe it.

Medtech Innovation: Everything but the prototype. Answer these 5 questions first.

So you’ve got an idea for a new medical device. What’s the first thing you want to do?

If get money to make prototypes is your response, perhaps you might want to think again.

Sure, SBIRs (Small Business Innovation Research grants from the US government) are out there specifically to support such work. The urge to get hands on and make something is tough to resist, especially if you’re an engineer by training. But if your goal is to build a business and solve a problem, I recommend holding off on the proof of concepts, bench-top testing, and rapid prototypes.

I know, if you have a working prototype you can get customer feedback and use it to get funding for your company. But those funders, whether angel investors or venture capitalists, will ask you these types of questions before giving you one red cent:

  • What’s your “killer app”? (I know, you’d think they wouldn’t say that in healthcare!). By killer app they mean what is the critical problem you solve with your idea? In today’s healthcare environment that boils down to can you make care faster, better or cheaper…and ideally all of the above.
  • What is the evidence (data) that validates your idea that you can improve patient outcomes, improve safety/quality of care, or reduce the cost of care? You may be thinking how am I going to get evidence without a working device, but at the early stages you need a rationale and then a plan to validate your rationale.
  • Who are the 5 KOL (key opinion leader) clinicians that will attest to the fact that your idea (a) will do what you claim (assuming the technology works out) and (b) will buy it when it’s approved for sale.
  • What is your reimbursement strategy? It’s hard to get hospitals/physicians to purchase and clinicians to adopt new technology unless there’s an economic incentive to do so. If “new code” comes out of your mouth, you’re in trouble because it’s unpredictable and takes a long time to get a new code. So, if you can get approval for reimbursement using an existing code, all the better.
  • What is your regulatory pathway? To investors, the FDA is an unpredictable, time-sucking hurdle. The fact that current approval processes are under review and changing creates uncertainty, the enemy of VCs and Angels. Ideally you have a number of recent predicates that will enable a 510k submission. And if you were thinking of going the CE route and enter the U.S. market after a European entry, be prepared to reduce the early sales in your revenue model as the healthcare markets are smaller and adopt more slowly than the U.S. market.

Bottom line: Investors will be thinking up front how they are going to get their money out of your company up front. The first step in building that case is getting really solid answers to the above questions. Following that you can begin to think about your team, technology and testing plans…and your company’s exit strategy. But before you put money and time into prototypes, think about building your healthcare business case. If you do, you may find a way to bootstrap your business as good ideas attract money and people.

“Getting to Know David Freeman, Industry Thought Leader”

As it originally appeared on Schwartz Communication’s PRx Blog:

PRx Blog

Getting to Know David Freeman, Industry Thought Leader

Name: David Freeman
Title: President
Company: Freeman & Associates Consulting
My first job in healthcare was: My first job in healthcare was as a PR Specialist and Tradeshow Manager at HP Medical, in the headquarters operation.  I was 26 years old and I remember the feeling of awe when I first came to the company for an interview (the first of 9 interviews). HP was famous at the time for its open workplace environment (read low cubicles). As I rounded a corner I looked across a huge expanse of desks and people and computers on every desk!

It was a great start in healthcare because I had the opportunity to learn about HP’s entire portfolio as well as travel to conferences like the American Heart Association and American College of Cardiology, where I got to interact with clinicians, sales reps and marketing professionals from around the world.

What I like most about working in healthcare is: It’s of course trite to say that I work in healthcare to make a difference.  And that the industry attracts good, smart and caring people. All true. But working in an office, caught up in conference calls and cross-functional meetings, a challenging regulatory environment, demanding quality system requirements, it can be easy to forget why I feel so passionate about being in healthcare.

However healthcare has a way of stripping the business veneer away and reminding you of what’s at stake and how you make a difference in a way that I imagine few industries can. Every time I visit a hospital on business, suit and tie, folio in hand, there’s a moment when the environment breaks through and I realize that I’m surrounded by people in crisis and that I’m connected to assessing and preserving health.

I was a pediatrics product manager when the first Iraq war broke out. We were racing to develop a pediatric transesophageal ultrasound imaging transducer. The miniaturization of the electronics was pushing state of the art at the time but my clinical trial sites at children’s hospital in the U.S. and U.K. had conveyed how important this innovation would be to assess surgical repair of congenital heart defects from behind the heart, out of the sterile field, after the repair but before the chest was closed.

The European OEM firm we were working with to develop the transducer had a sister division that got caught up in the night-vision scandal and the State Department put the entire company on hold for business with the U.S. Six months in on a scheduled nine month project we scrambled to find an alternate firm to work with to restart our effort. Our schedules slipped and while we kept our clinical trial sites informed, one day the head of Pediatric Echocardiography from the largest of the U.S. children’s hospitals reached me by phone at my desk.  He proceeded to tell me about a patient they had lost on the table the day before and that the transducer might have saved the patient’s life.  He was upset and emotional and asked me what was taking us so long.

Similarly, I was involved with Schwartz to build awareness of sudden cardiac arrest from the early days when every new airline placing AEDs on board was still news. At each turn, as we worked with corporations, public places, schools and home users, the calls would come in…hi, my name is (pick a name)…and I’m just calling to thank you because my (husband, father, daughter…) was saved by your device.

It’s that vital connection to people, to saving and preserving lives, that keeps me loving this industry.

When I’m not working, I like to: We have four kids and I love spending time with them. Other interests include music (jazz and chill), taking nature photographs, writing poetry, and keeping up with the world and technology.

Who had the biggest influence on your career?: A woman named Cynthia Danaher, who was at HP, has been the most influential person on my career. She heard me interacting with customers on the trade show floor (when I was in my first healthcare job) and recruited me to work in the ultrasound business. She demonstrated a mix of three qualities as a manager that I admire to this day:  (1)  The ability to personally connect with people, (2) Passion for advancing the business, and (3)  Intellectual rigor of the work she did and asked of her team. I learned an enormous amount from Cynthia and HP about management, marketing excellence, and corporate ethics.

People would be most surprised to learn that I: Went to a canoe/survival camp when I was 15 years old in Northern Canada where I learned to portage wood canvas canoes for up to five miles and survived 5 days in the woods with nothing but a match and a knife.

If I wasn’t in healthcare, I would probably be: If I wasn’t in healthcare I would probably be an unknown writer.

You can find me at (email, Twitter, LinkedIn):
Web: www.freemanb2b.com
LinkedIn: http://tinyurl.com/26shj26
Blog: www.freemanure.wordpress.com
Twitter: @freemanb2b

Tags: David Freeman, healthcare, healthcare PR, medical device PR, public relations agency, Schwartz CommunicationsPosted by Jayme Maniatis on December 7, 2010 at 12:31 PM
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Effective Marketing: What’s Sushi Got To Do With It?

When I was at Hewlett-Packard in the late 80s there was an interesting tension between two conflicting aspects of the company:

  1. It’s pride in developing bench to bench, as in engineers making products for folks just like them (where’s the marketers?)
  2. The self-deprecating characterization of marketing, best typified in the now famous quip “that if HP were marketing sushi, they’d call it cold, dead fish”, a reference to its marketing via objective, conservative benchmarks and specifications.

Which leads me to my question:  Effective Marketing:  What’s sushi got to do with it? As a lover of both sushi and marketing I think there some interesting observations to be made.

History:

Sushi has been around a very long time, starting in 4th century BC in Asia as a method to preserve fish, an important source of protein.  Salted fish was kept in rice, stored for months, allowing the rice to ferment the fish.  With this type of sushi, called nare-zushi, the fish was later consumed but the rice was thrown away.

Early in the 8th century, after having spread throughout China, the Japanese began to adopt their own form of sushi in which both the fish and the rice were consumed.  The fish was allowed less time to ferment with the rice and was therefore still partially raw.  Seisei-zushi represented a fundamental shift from food preservation to cuisine.

Later in the 19th century mobile food stalls began selling sushi in Tokyo Bay, combining fresh fish and select seaweed and calling it nigiri-zushi.  As a result of the Great Kanto earthquake of 1923 there was enormous dislocation in the Tokyo area, which couldn’t sustain the city’s concentration of sushi chefs.  They spread out across Japan, helping to spread the new variety of sushi, which later gained popularity in the United States in the early 80s not only for taste considerations but as a healthy dining alternative.

As for the history of marketing, it has a shorter timeline.   Some attribute Gutenberg’s invention of metal, movable type in 1450 as the beginning of marketing as that technology eventually led to the first “mass” production of flyers, notices and brochures.  Magazines followed in the early 1700s, paid advertising in newspapers in the early 1800s, and spam (via the telegraph), billboards and brand trademarks followed shortly thereafter.

Methods, materials, primary purpose, location have all evolved for both sushi and marketing and having a sense of the history helps provide perspective on current trends and future directions.  And that despite great change, there’s continuity.

Specialized Skills:

In Japan it can take 15 years of apprenticeship before you are viewed as “ready” to be out on your own.  Pre-dawn selection of fish from the fish market, preparation of the special vinegar rice, cleaning and cutting the fish, perfecting making the rice ball and maki rolls, all require specialized skills, attention to detail, and great patience.

Having tried to making sushi at home I have had the dispiriting experience of my rice balls falling apart and the cut fish looking like a ham steak instead of an elegant piece of sushi.  I imagine that many people don’t want to “try this at home”, happy to trust their sushi experience (and their health) to the experts.

But have you noticed that folks from many functions believe themselves a marketing expert?  After all, research suggests we’re bombarded with marketing messages every day (Consumer Reports suggest American consumers are exposed to 247 messages each day.  To put that in perspective, each of us sees more ads in one year than people 50 years ago saw in a lifetime).  All that exposure makes us experts on some level with regard to a sense of what resonates and what appears to simply not work.

Nevertheless, like being a sushi chef, great marketing requires specialized skills.  Whether it’s customer and market research methodology, creative design and branding, strategy development, communications expertise…all combine to establish the art and science of cost-effective marketing programs that have impact.

Great sushi looks good, is free from parasites, and tastes great.

Great marketing moves markets, creates new categories, defines new business and product strategies that offer unique customer value, creates product intros that generate profitable sales, etc.

Beauty:  An End In Itself?:

Clearly the Japanese aesthetic is part of sushi’s attraction.  Glazed sushi plates, chopstick rests, soy sauce dishes, placement of the sushi on the plate, attractiveness of each piece, plate decorations (seaweed dividers, wasabi and ginger arrangements, etc.) all contribute to an attractive appearance.

But if the fish isn’t fresh and the maki doesn’t taste good, well all that beauty doesn’t add up to anything.

Similarly, artistry and creativity are certainly a part of great advertising, website and collateral design, and even brand naming.  There are a number of industry awards that recognize such creativity, innovation and artistry…but does the marketing work?

The products of marketing may be aesthetically beautiful (even art) but a few of the true tests of marketing lie in:

  • Are the messages and visuals credible and relevent to the audience?
  • Are your products, services and related communications different, so that they get noticed, provide unique value to the customer, and establish unique space vs. the competition
  • Does the marketing advance your company and brand image (awareness and preference)?
  • Does it move your audience to purchase consideration?

These are just a few of the litmus tests that can be applied to really good marketing.  Like sushi, great marketing must satisfy more than your visual appetite!

Timing Can Be Everything:

Did you know that the least popular days to go to a sushi restaurant are Monday and Thursday?  Fresh fish is at the heart of good tasting sushi.  In Japan fish markets are often closed on Sundays, which is why many sushi restaurants are closed on Mondays.  Many sushi restaurants buy their fish on Tuesdays (for the mid-week) and Fridays (for the weekend).  The best nights to get fresh fish are Tuesday and Friday night (very busy sushi restaurants may also buy fresh fish on Saturday as well).  Monday and Thursday, if the sushi restaurant is open on those days, may not provide the freshest sushi.

Timing is critical in strategic marketing and communications as well.  The right campaign at the wrong time could yield negligible results.  Some critical timing factors to think about:

  • Product development, particularly in regulated industries like medical products, invariably takes longer than anticipated.  Having been around that block a number of times, what contingencies do you have in place if your product functionality, portfolio completeness and timing shifts?
  • Are your messages linked effectively to the buying cycle?  If you don’t get invited to be part of the RFQ/RFP, spending a lot of resources on communicating about your differences vs. the competition may be a waste.  Gaining awareness, being considered in the purchase process, growing your positives with the installed base, each require linking critical messages to your audience at the right time in the customer lifecyle.
  • Have a disruptive innovation?  Many times enthusiasm for the attributes of the innovation cause marketers to communicate too close to the product instead of conditioning (educating) the market about the new category and then linking it to their company.  A great example of this now is the UPS logistics campaign, a fabulous example of category creation (we’re not in shipping, we’re in logistics) so that customers understand the new benefits and that those benefits are uniquely provided to UPS (which provides a far more detailed description of benefit than the prior campaign, “What can brown do for you?”…I don’t know, deliver my box?).

These are just a few examples of critical timing considerations for effective marketing.

Timing can be critical, whether you’re crafting a sushi roll or marketing message.  Ignore timing at your dining and business peril!

Convention and Protocol:

The first time I traveled to Japan I was excited to go to my first authentic Japanese meal.  I was honored by one of the business leaders to be taken to a nearby sushi restaurant.  With his help I ordered a few items.  We got caught up in conversation as the food arrived and I hungrily dug in…with my fingers.  I hadn’t yet mastered the art of chopsticks so I simply grasped a piece of sushi between finger and thumb, dipped it in the soy sauce, and popped it into my mouth.

When I looked over at my host he was staring at me in horror.  In a flush of embarrassment I asked what was wrong and he proceeded to lecture me that I must use chopsticks, turn the sushi over and dip only the fish side into the soy sauce, not to put additional wasabi on the sushi as the chef already put the right amount on when he made it, and not to put wasabi into the soy dish.  I begged forgiveness  and ate with difficulty and self-consciousness the rest of the meal.

A few decades later I have mastered chopsticks but when in the States I cater to my own sense of taste and propriety and can’t say I’ve noticed any shocked stares from the chef or other patrons.  And while I respect the tradition, I’m not sure any of those conventions change the quality of the experience in my mouth.

In marketing, we have a fair bit of convention and protocol as well.  It seems automatic in the B2B world that for every new product introduction a brochure, print ad and press release are what’s expected.  Besides there being so many more ways to engage your customers, raise awareness, and support sales efforts, fundamental questions should always be asked before jumping to conventional deliverables.  These questions center on who your target customer is, what’s important to them, how to build credibility and relevance, what are the barriers in the market to overcome, and what are the best vehicles to achieve your initial and downstream objectives.  Maybe your first resources will be spent on visual demonstrations, white papers and industry association engagement.  Or perhaps social media, web ads, and email.

In  both sushi and marketing, convention can get in the way of meeting your objectives (whether it’s an enjoyable meal or an effective campaign).

Finally…

Chop sticks, convention, cold, dead, raw fish…to the novice, sushi can be a little intimidating.  Perhaps you’ve heard of “beginner sushi”, which includes a California Roll (no raw fish in that), cucumber rolls, and if you’re daring, maybe a piece of tuna sushi.

Marketing can be a little daunting too.  I recommend starting with the end in mind:  What are you trying to achieve and work backwards to what is the strategy and tactics to reach your objectives.  And when in doubt, reach out to an experienced marketer to help you navigate the menu of marketing strategies and tactics best for your business.