Entrepreneur Report – Lab Connect LLC

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The Company

Lab Connect LLC was founded in 2002. It is a clinical research company that provides global central laboratory services including routine and esoteric laboratory testing, kit building, sample management, bio-storage and scientific support services for biopharmaceutical and CRO clients. The company has a unique combination of state-of-the-art technology, world-class laboratories, easy access to emerging markets and extensive specialized testing expertise, which means the drug development industry can rely on a single provider for all of their central laboratory service needs.

Target market

Its target market is small and mid size biopharmaceutical companies. Its target contacts are decision makers with titles such as Project Manager, Director of Clinical Operations, Clinical Research Associate, etc. with BS, MS or PhD degree, typically 35 to 50 years old, tech-enabled, but not necessarily tech-savvy.

They are disrupting an existing market. The current market size is about 4 billion dollars and the company has more than 20 competitors, including some billion-dollar companies such as Covance, Quintiles, and Quest. But the goal of Lab Connect is to develop a unique, distinctive and memorable brand to effectively differentiate from the much larger, more experienced competition. They want to promote the “decentralized central lab” concept with the messaging of “The world’s local central lab. Global reach. Local expertise”. As the CEO said, Lab Connect should be the “Toyota” or “Crate & Barrel” of the lab industry—connoting a well-designed product with good value. They are striving for a unique and differentiated “look and feel”. Some differentiating factors include connectivity and accuracy, humanness and “high touch” customer service, and high tech yet “user friendly”.

Positioning and Value Proposition

Positioning: The CEO wants to position Lab Connect as the “decentralized central lab” that provides biopharmaceutical companies with strategies for any phase of development, from target identification to commercialization, whether those companies require short- or long-term storage of their samples. He believes that proper sample management is a vital aspect of today’s clinical trials. Because samples may have to be retested for compliance, data or drug-safety reasons, a comprehensive bio-storage plan should be a part of their initial trial outline.

Value proposition: Lab Connect is focusing on taking customizable approach to meet clients’ protocol’s geographic and analytical needs, establishing regional laboratory hubs for site support, building industry leading specialty laboratories, providing unparalleled project management experience, developing innovative sample tracking and reporting technologies and keeping service oriented organizational culture, with solution driven mindset.

Channels and distribution

Since it’s a service company, its current sales channel is direct communications with decision makers of its target companies. They are taking a project management approach. Since the CEO used to work in the biopharmaceutical industry for several years before he founded his own company, he has a strong network in his target companies. He used to list all the primary contacts and let the sales people to call or visit them on a regular basis. Once they acquire a customer, they will have face-to-face meetings and start with project planning and hold routine project team meetings. They also have on-line collaborative tools with their clients.

Their customer acquisition is mainly through word of mouth. Starting from the CEO’s network in the industry, the company now has a stable customer group. Since the company did a good job in improving service quality and keeping a high switching cost, their retention rate is pretty high (around 22%, which is much higher than the industry benchmark). The company’s strategy is always focusing on increasing sales of existing customers. They’ve also tried email and cold-call sales to acquire new customers before, but didn’t achieve as many leads/sales as expected.

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Local Entrepreneurial Advice on Customer Retention & Referral

Last week, we had the following local entrepreneurs and marketing executive come speak on a panel about Customer Retention and Referral: Jen Nausin, founder of Detaale, a marketing consulting firm; Nathan Kaiser, founder of 2bar Spirits, a Seattle-based craft distillery; and Kelby Johnson, an associate director of Integrated Media Strategies at Wunderman. Each had a different perspective on customer engagement. Here are the key learnings from the discussion:

  • Acquiring Customers – Listening is key and so is relationship marketing. This could mean literally knocking on doors, but most important is talking to potential customers. You want to share your vision and the reason why you’re doing what you’re doing. It’s the “Why” not the “What”.
  • Retaining Customers – Be your true self. Set expectations right from the beginning in order to retain the relationship. Keep them engaged and determine what motivates them to action. Consider contests, games, incentives, or an ambassador program. Also, what would make your customer switch to a competitor? What are the barriers to switching? Think about the businesses who have you as a repeat customer. Jen’s example was Nordstrom. Do something special that goes above and beyond. Understand the reasons why you return for to those businesses and services, and incorporate those aspects into your own customer retention strategy.
  • Customer Referrals – Deliver quality always. Start with your local customers first. Provide a great product or service and your customers will talk about you.

We had a great discussion with our panelists and also had an opportunity to talk to them individually about our product ideas. Thanks again to Jen Nausin, Nathan Kaiser, and Kelby Johnson for taking the time to speak to us. We really appreciate your advice!

– The Ring of Engagement team

Fracture – Customer Acquisition

Fracture is a new way for the average consumer (not professional photographers) to print their photos – except now they come on glass. The website allows the user to upload any photo, decide how they would like to present it (wall/stand/etc) and the size and then place the order. The website is attractive, easy to use, and comprehensive without being overwhelming.

From a customer acquisition perspective, Fracture does a nice job of making the service available to anyone and everyone in a variety of forms. As a first time user, you can upload a photo, make your selection and place your order in under 10 minutes (5 if you are really moving). You don’t have to sign up for anything or commit to using the service in the future. Once you have placed an order, the site asks the customer if they would like to sign up for the newsletter (which also has coupons) and then asks them to refer a friend (or two or six).

This is a great start for Fracture as it appears that Fracture depends on both inbound customers and outbound efforts for their acquisition strategy. Most of their customers appear likely to come from their activity on Facebook, twitter, Linkedin, Google+, Pinterest, as well as their blog which they post to periodically. They have also been featured on a number of television shows and in a number of prominent publications which note their accessibility. Through these forums, they are generating customer interest and then acquiring new customers with an easy to use website that allows for a low cost initial investment for those who find their way to the page (you can get a glass photo for $10). Fracture makes it easy for a new customer to try their service and then determine – once they receive the first photo – if they would be willing to remain a customer and refer the company to others.

Fracture appears to make customer acquisition easy once a customer gets to the webpage.

There is another option which is that customers can register on the website and upload a series of photos to an account that can then be accessed later by the customer. Though I registered for Fracture, I have not received my confirmation email that would allow me to access the account. This will give me a better sense of what it means to be a long term user of Fracture and what the process is like for uploading and saving photos for future purchases which will be important for customer retention.

All in all, Fracture has an attractive platform whose simplicity appeals to a variety of individuals – from moms, college students, and even the tech savvy who aren’t expert photographers. And it doesn’t hurt that it was started by two UF grads (go Gators!).

Revenizer makes you feel not quite at home

I was poking around angel.co the other day to see if there were any new web analytic companies that were worth checking out.  I wanted to find a small company (< 1MM in raised funds) that had a decent website and a cool product.  After jumping around I settled on a company called Revenizer.  They have a ‘try it before you buy it’ model so I decided to create a profile and give it a shot.

Let me start by saying that I am a tech savvy person.  My day job is deploying advanced scheduling techniques on large scale manufacturing systems and bundling custom software to assist in the execution.  If I don’t understand something I can usually figure it out in a short amount of time.  Revenizer was straightforward to log into and create a twitter dashboard, however I had trouble getting it to work for facebook.  When I tried to create a page for my facebook I kept getting this message: ‘no facebook pages exist for your account’.  I know I have facebook pages so something on Revenizer’s side is causing this error.  I tried the online help but it was not specific enough to answer this one problem.

I was hoping to get a welcome email from the company that might have info on how to contact them if I have questions.  After one day I did receive an auto-reply email “welcoming” me to the website.  The email is below:

Hello,

Welcome to Revenizer and thank you for signing up! Keep these login credentials handy in case you need them in future.

Login URL: app.revenizer.com
Registered Email: imtimcook@gmail.com

We are excited to have you with us and we’re always here to help. If you have questions, email us at support@revenizer.com and we’ll get back to you promptly.

Thanks,
The Revenizer Team

 

To be honest this email was not helpful, it wasn’t personal and wasn’t what I would expect from a smaller company.  Why wouldn’t Revenizer notice I hadn’t set up a facebook dashboard and asked me a specific question about it?  It would have made me feel a lot more appreciated if the email said something like this, “Hi, my name is (insert name here). I am (insert title here) at Revenizer.  We really appreciate you creating a profile and look forward to helping you track your online presence. I noticed you have a twitter dashboard set up but haven’t created anything else.  If you have any questions or need some tips please feel free to contact me at (insert personal business email and phone number here).  I look forward to your call/email.”

Having a more personal welcome not goes a long way to making a new customer feel at home.  Because after all, if you feel at home on a website you will spend more time there.

 

BenchPrep Customer Acquisition

BenchPrep is a company out of Chicago that specializes in providing study material/courses/prep for standardized tests and certificate programs over all of your mobile/online devices. No matter if you are studying for your college entrance exams (ACT, SAT) or for graduate school exams (GRE, MCAT, LSAT, GMAT, DAT), BenchPrep has study material and courses to help you prepare. The thing that sets BenchPrep apart from all of the other competitors is that its content is made to be used on your mobile device such as your smartphone, laptop, or tablet. Moreover, you can switch from device to device and not lose your place in the process.

BenchPrep has mostly inbound customer acquisition. It turns up as the 2nd overall result on Google when searching for “mobile standardized test prep.” It is on the top of the second page for “standardized test prep” search. Their pricing plan is a monthly or yearly fee to access content. From their Facebook feed, it seems like they are very flexible and willing to accommodate the needs of their customers. Moreover, from their Facebook page, it seems like they had a Groupon deal for a 2-week trial, which is likely an outbound strategy to bring awareness to the company. Speaking of Facebook, BenchPrep is also very active on the social media sites. They have very active Facebook, Twitter, Pinterest, Google+, and Instagram accounts.

BackOps – We Get It Done – Customer Acquisition Analysis

Backops delivers a paperless ‘Back Office As A Service’ to the SMB market. Its critical to have right systems in place for small business to succeed. Companies spend hours upon hours working on tasks that are irrelevant to their business; like  process loads of paperwork required for basic operations, crunching numbers in Quickbooks and churning out piles of human-resource forms for new hires. Backops manage all these day-to-day activities of  HR, Accounting and Finance departments-all for small business by combining 15 or so modern business productivity tools with crowd sourced labor from stay-at-home workers. Businesses get a simple dashboard that shows them what’s happening across the organization, from accounts received to job offers accepted. If the exec wants more detail than the dashboard’s accounting summaries and human resource statuses provides, they can request custom reports or data dumps from Backops.

Company has a simple website through which it can process inbound calls. The landing page and inbound form looks like following

BackOpsBackOps_Form

Below,  I will be analyzing BackOps customer acquisition strategy

Awareness: For outbound channels, I’ve tried various social channels and Search engines to analyze the web presence of the company. Presence of the company on these channels is fairly minimum and most of these channels are not active. Moreover, company search term is bringing up a computer game that spells closely with BackOps. As company positioned itself as a back office support for technology start ups  it is essential to maintain active web presence and engage early startup’s through active communication. BackOps has some presence on sites that are dedicated to start up eco-systen and these websites to them can serve as a good acquisition locations.

Activation:  Website is simple and elegant. It outlines all the services BackOps offers and address concerns like cost and security on website. Customers can get in touch with BackOps through a request page that is available across all department pages. However, this page doesn’t generate any automated message which makes me believe that BackOps potentially have a physical sales team that would handle RFI’s and RFP’s once customer express interest in the firm. Other than this form there is no other channel available for customer to reach out to the company. Website is neither linked to any of their social platform sites nor does it have company contact information and address.

Retention and Reference of customers is very hard to analyze for this company as there is very little out there on the web. Lacking the automated acquisition engine that encourage customer references, I am assuming that most of the references are going to be word of mouth from existing customers. I tried to get in-touch with company for additional information, will update this blog once I have requested data.

Revenue – BackOps claims that they cost half of traditional outsourcing firms and cost a third of internal staff salaries. Fees start at $750/month for both accounting and human resources services. Their fee structure is based on the number of employees company has and the number of transactions a company makes on a monthly basis. BackOps objective is to increase the efficiency of operations by automating where ever possible and saves its customers time and money. I find this ironic as even their own inbound customer acquisition process is not automated. Business model has huge potential and when executed effectively can end up as a  multi-million dollar business – and to do so they should begin by developing various channels to acquire, retain and manage customers.

Zulily Customer Acquisition

A trip to the Zulily home page tells you a lot about how the company works to acquire customers, The company, a Seattle based online retailer of products “designed for moms” offers different deals at discount prices to their online users.  Want to find out what the current deal is?  You will have to sign up.  The home page cannot be navigated until the customer offers an email address.  The user experience is captured below.Image

As the user quickly finds out, any exploration of the site requires the user to sign up.  While this may deter some customers from signing up it enables real customers to self select.  If a person is interested in the service they have to sign up and Zulily has their email address.  The user immediately is rewarded with seeing a deal and Zulily now has another email address to target market to.  The more information about purchase habits Zulily gathers, the better they can target deals to consumers who want them.

The second part of Zulily’s acquisition process is via customer referrals   Customers are encouraged to invite their friends to join the deal hunting process.  The reward for a successful conversion of a friend is $20.  Image

This process informs us that the expected life time value of qualifying Zulily referral prospects is over $20.  The company must have calculated that referred customers are more likely to use the service and purchase.  How many customers can Zulily afford to get this way?  Well as the benefactor of an $85 million raise by Seattle’s Mavron Venture Group, that’s over 4 million Andrew Jackson’s.  

Zulily’s future looks bright.  Ifl their customer lifetime value calculations are right they can afford to spend a lot of money of customer acquisition   With powerful Ally’s in Seattle, the company is bound to go far.

Charlie Northrop

Charlie Northrop is a second year MBA student at the Foster School of Business at the University of Washington.  He is a regular contributor to the Marketing 555 Blog.