How to create winning products with integrity
Scientific validation of benefits is becoming increasingly important in the competitive world of natural products, and communicating those benefits to the buyer is just as important. Ken Fichtler examines the elements necessary for a successful return on investment
Few areas in marketing are as mystifying as the problem of getting the consumer to understand your product's scientific validation. You worked hard for it, spent tens of thousands of dollars and waited months for results, but now no one seems to get it. It is a problem faced by far too many alternative-medicine companies today.
The ultimate goal in launching a new product is, of course, to make money. But to do so, one must 'spend money to make money,' otherwise the ramifications can be devastating. Discount bulk materials may lack purity, cheap labels may scream poor quality to the consumer; and without adequate foresight or due diligence, the product may not be a standout among the ever-tightening competition. So, how does one compete in the crowded natural-products industry? The answer lies with the E.C.O. formula — an acronym for the three vital elements in a new product: expertise, capitalization, and originality. With this formula, one can easily predict the probability of success.
The first two factors, expertise and capitalization, are often overlooked. Product formulation by an expert may seem patently obvious. But your product must also be branded and marketed by an industry expert to give it a professional look and a specific, yet unique, market position. Funding or capitalizing this process is often one of the most poorly thought-through aspects of launching a new product. As a general rule, take whatever you think is the cost and add another 20 per cent for safety sake.
Originality is the last element of the formula. Your product's ingredients and formulation don't have to be unheard of, though the product must have differentiating characteristics than other products on the market. Be sure not to mistake originality with obscurity, however, as that can be just as deadly as being imitative. A product can be so niche or so atypical that there is not enough interest from the marketplace to warrant its success.
To achieve originality, do your research, talk to leaders in the industry and find out what can be done to set your product apart. It could be something as simple as a more convenient dosing and delivery system or as complicated as a relatively unknown cutting-edge ingredient. No matter, it must be distinguishable from competitors' products.
Increasingly, consumer awareness about scientific validation is on the rise. Does this mean consumers can understand all the scientific jargon that might be available on your company's website? Absolutely not. Consumers may demand a certain level of scientific credibility, but that doesn't mean there is a high level of comprehension. Even so, a lack of understanding is not a license to misstate the results of your trials or to water down the results to the point of no real meaning. Therefore, it is imperative to find the appropriate language that legitimizes the findings but conveys the information on layman's terms. As a general rule, write scientific sales material as if teaching a 10th grade biology class.
The most important part of selling science to the consumer is extracting sellable points from the scientific report. The points must be as scientifically accurate within context as out of context so as not to be misconstrued and misinterpreted, or the results could be a publicity crisis. This can be an exceptionally difficult task depending on the complexity of the study. Remember the 'E' in the E.C.O. formula. If you cannot accurately sell the consumer your science, find an expert who can. Attempting to interpret a scientific study without the qualifications or knowledge to do so can lead to detrimental publicity for your company.
The ROI on marketing and science
Return on investment (ROI) is one of the most common issues when considering how to use your company's resources. When will you see a return and how much will it be? When managed properly and complemented with appropriate promotions and publicity efforts, your scientific validation budget will be the best money ever spent.
Advertising is an investment, not an expense. It should always pay back the investment and then some. Many businesses incorrectly look at advertising as an expense or a cost. Analysis of an appropriate marketing campaign, however, reveals that this assumption is not accurate.
For example, let's say you spend $10,000 on a print ad in a magazine. The advertisement results in $45,000 in profit. Plug this into the formula: $45,000 - $10,000 = $35,000 and $35,000 ÷ $10,000 = 3.50. The ROI is 3.5 times the advertising investment.
Measuring science is a bit more challenging than measuring advertising ROI, namely because the return is a bit more indirect. Science alone cannot tell a story. It needs interpretation and publicity to shine. Scientific publicity has an advantage over traditional advertising. It is newsworthy and therefore is seen by consumers as more of a public-service message than an advertisement. This means that the communication will be perceived as more trustworthy than other methods of promotion.
The best way to calculate the return on investment of science is to keep good records. Upon commencement and completion of a scientific study, don't be shy — send out as many press releases as possible, write articles and advertise. Then start measuring sales as soon as the first promotion hits the press. It's not uncommon to see a spike in sales soon thereafter. Once the numbers are in, take that percentage and subtract the ROI you typically see in advertising and publicity efforts. Any percentage in addition to the norm can be attributed to the science.
Of note, though, is that it can take some time for the full effect of the scientific study to be seen. So be sure to track your sales carefully for one year or even longer, and communicate with your customers to find out what prompted them to buy. By comparing the sales increase the year after the scientific study was released to the sales increase the previous year, one can get an even better idea of the return on investment.
In other ways, the return on investment for scientific studies is immeasurable because validating the safety and efficacy of your products increases customer confidence and trust. Though abstract, this type of return is, in some ways, more valuable in the long term than sales figures or profit. The goodwill built through an investment in science can carry a company through some of the hardest economic times by generating referrals and creating repeat business.
Ken Fichtler is chief executive officer of Aim & Act, a leading provider of scientific marketing and consulting services for the natural-products industry. Respond: [email protected]