- Inadequate customer segmentation and prioritization. Customer segmentation in life sciences is challenging because of the variety of customer types, ranging from large commercial pharma to preclinical biotech, academia, government and clinical laboratory customers. Each group has different needs and desired levels of consultative partnership support; it can be difficult to identify meaningful commercial opportunities among these many customers with unique needs. Particularly in biopharma, customers have complex networks of purchasing decision-makers, ranging from end users to procurement to executives. Insufficient segmentation of customers by needs and purchasing dynamics within the account can lead to lack of coordination, a poor customer experience and missed sales opportunities.
- Underdeveloped value proposition. Many tools and services companies are striving to evolve their value proposition from provision of point solutions to a more end-to-end suite of products and services, but this broader value proposition is not always being marketed properly. Instead of focusing on the holistic solutions they offer to address key customer issues, some companies are still messaging customers mainly about the enhanced features of their specific offerings.
- Insufficient collaboration across commercial teams (including roles such as sales, account management, business insights and analytics, and sales operations). Priorities and incentives between key account managers and sales teams are often misaligned, leading to uncoordinated account activities. Additionally, multiple sales representatives — each responsible for a different part of the portfolio — may call on the same customer stakeholders, competing for customer attention rather than collaborating and cross-selling.
- Poor coordination between commercial and delivery/support teams (including roles such as project management, technical/clinical subject matter experts, technical support, and implementation). Sales organizations often overlook the value delivery teams can bring pre-sale, given their extensive interaction with customers after sales are closed. They often fail to gather sufficient input from delivery teams during the sales cycle. A lack of upfront coordination and suboptimal post-sale handoffs can sidetrack project-oriented offerings when customer expectations are not met due to “overpromising” sales teams. Meanwhile, delivery teams may not proactively share leads discovered within existing customers post-sale, leading to additional missed opportunities.
- Suboptimal use of sales and marketing tools and technologies. Life sciences tools and services companies broadly underutilize sales and marketing tools and technologies, compared with other sectors and industries including biopharma. Many companies do not leverage customer relationship management (CRM) software (e.g., Zoho, Salesforce) to its full potential. Ideally, all customer-facing personnel leverage CRM tools with robust data entry both to inform and track their interactions and to coordinate across teams. Additionally, companies have underinvested in emerging marketing technologies that can enhance in-person sales efforts, such as single-customer views and zero-party data. They also generally lag in deploying novel marketing strategies like next-best action, omnichannel and catalytic marketing outside of select pilots.
Faced with these pain points, many life sciences executives find it challenging to realize the full value of their portfolios. They often observe fewer synergies than expected across business units that were bolted together after what was — on paper — a highly synergistic M&A. And they often realize their businesses are still primarily selling individual offerings despite having developed an end-to-end suite of solutions.
These pain points are also negatively impacting customer experiences. Customers increasingly view their interactions with life sciences tools and services companies as disjointed and cumbersome. For example, customer feedback indicates many are frustrated when several sales representatives call from the same company and by how difficult it is to reach technical support when needed. Many say they are not receiving the level of customer service expected for the offerings they purchased.
The net effects of these pain points are unforced errors in commercial execution and adverse outcomes for suppliers and vendors, such as customers dropping out of the sales funnel, selecting alternative offerings they can better understand, or becoming vocal detractors because they think the vendor does not understand their needs.
Several commercial model improvement initiatives can be explored to address these pain points
To address these common pain points, organizations should examine their commercial model capabilities across several key dimensions — the same dimensions that apply to any operating model (see Figure 3).
