Medical Device Link.

Originally Published MX July/August 2004

TOPSPIN

With clear objectives and a well-defined plan, even a marketing staff with limited resources can bring company success.

Catherine M. Wolfe

In the world of marketing, big budgets appear to equal big growth. So, when a medtech company is a smaller competitor—with a marketing budget of equal proportions—what are the chances of making significant strides in the market? How can company marketing staff best use their limited resources to obtain the biggest possible return on investment?

Since 2000, Toshiba America Medical Systems Inc. (Tustin, CA) has enjoyed annual year-over-year growth of 20–25% in a U.S. market that has been growing by less than 10%. Nevertheless, in the diagnostic imaging industry, Toshiba is a relative David in a field of Goliaths. For every one of Toshiba's salespeople, the market leader has at least five. For every marketing staff member Toshiba has, the competition has at least four. And for every promotional dollar Toshiba spends, the competition spends 10. Obviously, in such a competitive environment, Toshiba has to select marketing strategies that make the most of its hard-won dollars.

Catherine M. Wolfe is director of marketing services for Toshiba America Medical Systems Inc. (Tustin, CA).

For companies in a similar position, success lies in assessing the potential return on marketing communications and promotional options, and using that information to make some tough but necessary choices. Pairing those choices with an overall corporate strategy focused on offering products or services that meet customer needs—and striving for complete customer satisfaction and loyalty—helps to ensure that the company doesn't squander a single opportunity to attract and serve its customers.

For Toshiba, this has meant saying 'no' to a lot of potential channels for exposure. We've had to say 'no' to the broad awareness generated through national television advertising because of its high cost. We've had to say 'no' to advertising in business publications, in spite of the access they provide to desirable purchasing groups, because such advertising does not offer the targeted focus that is available through trade publications. We've also said 'no' to an expanded presence at symposia that could help us quickly enter into new market segments because of staff limitations. And we've said 'no' to representation at major industry association meetings that include the administrative buyers in our business because, frankly, the expenditure is prohibitive.

Killer Strategies on a Shoestring Budget

To overcome the limitations of so many negatives, medtech companies should explore how they can make a little creativity, discipline, and persistence translate into exposure, awareness, and even sales leads. At Toshiba, we found the key was in maximizing resources and opportunities to their fullest.

Promote Every Win. Self-promotion is not shameful. Companies should never pass up an opportunity to promote an ac- complishment. Instead, they should take any award, any positive assessment by industry analysts, any noteworthy sales win, and publicize that accomplishment in every imaginable way that reaches their target audiences and fits within their budgets. A company can do many things that don't cost a lot of money.

For example, one of the industry's analyst organizations recently presented Toshiba with a product of the year award. We communicated that win through a press release, on our Web site, in letters to customers, in employee communications, and in sales presentations. If there was an opportunity to bring it up, we did, many times using the same informational materials that we would have created anyway for employee communications, sales presentations, and so on.

Similarly, one of our industry associations tracks customer feedback. We make sure that every time we lead in those ratings, our entire organization knows about it. We provide our employees with materials that help them understand why such ratings are important and how to share that information with customers and prospects.

Build an Army of Customers. It costs four times as much to win a new customer as it does to market to current customers. That's why it is critical to a company's success and growth that company leaders understand what their customers think—about the company, its products and services, and where the company needs to enhance its performance. Listening to customers offers a chance to get very specific information for improvement that can save a company a lot of time, money, and heartache. Customers also can be a great source of new ideas for future products and services.

Four years ago, Toshiba was losing customers as fast as it was winning them, resulting in flat growth. An opportunity-loss analysis estimated that Toshiba was missing between $50 million and $80 million in potential sales opportunities every year. That realization brought about a new way of dealing with customers.

Today, Toshiba tracks customer satisfaction through surveys conducted after equipment is installed as well as through a broader annual survey. When the company embarked on this program, we investigated hiring outside companies to conduct the surveys. Some survey companies can do a great job, but they can also be budget busters. In the end, we decided to establish an internal department of two people and found an inexpensive telemarketing company that tracks customer satisfaction data. We augment and validate this research with data from industry analyst organizations.

Toshiba attributes a large part of its success and growth over the past few years to this customer survey program. If a company has to cut its budget, this is not the place to cut. It is impossible to know where a company needs to improve and grow if it doesn't know what customers think about it.

Tie to Well-Known Brands. The most cost-effective and successful advertising vehicle a medtech company has is always its customer base. Every medtech company that sells a product has key customer sites that provide heightened visibility by their very nature. By targeting several such high-profile customers and making sure the company's performance with them is flawless, a company can go a long way toward earning visibility, prestige, and credibility in the marketplace. Companies should seek to market their relationship with such customers to the greatest extent possible.

When Toshiba undertook this endeavor a few years ago, the company's reach was limited by the fact that it was not aligned with any high-profile sites. However, we selected a couple of institutions and set to work building relationships with them. Our primary target was the Johns Hopkins School of Medicine. Through ongoing work that spanned several years, Toshiba was able to place its leading-edge technology at Johns Hopkins, which is now using the company's CT and vascular systems to conduct research. By ensuring this account was given priority status throughout the entire company, the relationship has given Toshiba visibility—in the industry, among customers, and in the press—that it could never have achieved in any other way.

Level the Playing Field with PR. It's no secret that public relations can be a cost-effective way for a company to appear larger than it actually is. A solid media relations campaign offers a company credibility and the chance to reach customers through the market's target publications, and the cost is minimal compared with running an ad in those same publications.

Despite the fact that Toshiba is considerably smaller than its major competitors, in its areas of focus the company has been able to generate press coverage on par with those competitors—a feat that could not be accomplished in the advertising arena. In fact, this strategy has been so successful that a recent media audit of key industry trade editors showed Toshiba being perceived at the same level as its leading, and significantly larger, competitors, and as a technology leader in several product segments.

Another benefit is that $30,000 in PR spending can produce results comparable to $200,000 in advertising coverage. That's like a $170,000 savings versus buying ads directly. Moreover, with advertising the company misses out on the credibility that is conveyed by a third-party report, as opposed to the company's own statements.

A final benefit of PR is that the company can get at least two hits, maybe more. The first hit is when the company gets coverage in the publication. The second is when the company purchases reprints or shares information about the coverage with customers and employees. Such reprints are a great way to raise employee morale and make sure that the company's messages get across to everyone that's important to the company.

For companies that are planning to undertake a PR campaign, however, there are two points of caution. First, make sure that the company's messages have been fully developed, and that all of its spokespeople know what those messages are and how to deliver them. Second, make sure that the entire company is committed to the program—including particularly those in management. There is nothing so frustrating as setting up an interview and having the company's spokesperson get cold feet. Marketing communications staff can overcome these obstacles by training their people well, educating them on the value of PR, and making sure they know that the press is as important as the company's best customer.

Trade Shows: Select Carefully and Go Big. Trade shows are expensive endeavors, particularly in an industry sector that exhibits large equipment. There are space costs, transportation costs, design costs, travel costs, staffing costs—and the list goes on. If a company's opportunities for trade show participation are extensive, then it will be particularly important to assess which shows are critical to the company's perception and visibility in the industry. Companies should do everything possible to make their presence at the shows they select as professional and strong as possible.

At Toshiba, we make lots of tough choices about which shows we will participate in and which equipment we will exhibit. At the sector's two biggest shows—the Radiological Society of North America and the American College of Cardiology—the company holds its own against competitors by offering and showing only its best, from the exhibit to the associated advertising to the people working the floor.

Think before You Speak. Every opportunity a company has to reach out to its market, no matter what communication tool it is using—advertising, public relations, the Internet, customer presentations, and so on—is a critical moment that, if used wisely, will help the company achieve its goals.

To make sure that every such opportunity is maximized, marketing staff should hold message development sessions with the company's senior management and business unit managers. The resulting messages are a reflection of the company and its values, and should be tested internally and with select, trusted partners. Above all, the company must always be honest and speak in a way that is consistent with its corporate culture. The market is smart. It can smell an untruth, and the company will be found out, damaging the corporate reputation it has worked so hard to build.

At Toshiba, for instance, we hold message development sessions annually. We also carefully train anyone who is giving a presentation or interview. We develop question-and-answer documents for different circumstances. If an issue must be addressed with the company's field organization and customers, we communicate directly with both audiences so they understand the company's position and can get the response or support they need, ensuring that everyone in the company is putting their best, and unified foot forward.

Draft Employees onto an Extended Marketing Team. Companies shouldn't underestimate the value of their employees as emissaries. Marketing staff should reach out to them in as many ways as possible, including company meetings, hard-copy newsletters, e-mail, and the Intranet. Marketing staff should also periodically ask employees what they think about the information that is being provided to them. In response, staff should be prepared to revise their strategy based on employee feedback; otherwise, don't ask.

At Toshiba, the sales organization accounts for 15% of the total workforce. Recognizing the value of the entire employee base as extended company marketers, we try to use 100% of that workforce to reach out to the market. If an employee has an encounter with a customer, at the very least they should leave as positive an impression of the company as possible. There's nothing that can kill a reputation faster than an organization's own employees. After all, employees are a reflection of the soul of a company. Pay attention to them and value them accordingly.

The Boomerang Effect. When customers are provided tools that help them market their own services, they can also be enabled to market their medtech company partners. In the diagnostic imaging industry, hospitals and diagnostic imaging centers can spend from $1 million to $2 million for a new MRI or CT system. They frequently need help marketing the new capabilities offered by these systems to their local communities.

Responding to such customer desires, Toshiba has created a kit that includes everything a customer needs to announce the new capabilities, host an open house, and even market to its physician community (see sidebar).

The Debrief

Having limited resources doesn't have to mean that a company's impact on the market is limited. An expanded definition of resources—for example, viewing every employee as an extended member of the sales team—can help a company to achieve more than it thought possible with little to no additional budget. Don't underestimate the value and return on investment of some of the less-obvious marketing strategies—building a strong company reputation, word-of-mouth advertising, and good old-fashioned elbow grease like maximizing every opportunity to its fullest.

The most important tasks are to determine the company's objectives, make sure the entire organization is aligned with those objectives, select the marketing activities that are critical to achieving those objectives, and be willing to make some hard choices about what the company will and won't do. With clear objectives and a well-defined plan, resources won't be as taxed and results will be much more satisfying because they are bringing the company success.

Copyright ©2004 MX