Time to Read the 10/22 Letter to Shareholders Again
1) BIEL had a limited marketing budget
2) BIEL's products had little market awareness
3) Relying on distributors to create a market was not working
4) Decision to market directly to UK market via retail outlets
5) Chronic pain targeted through use of social media to create awareness
6) 7 day Trial for $5 had 80,000 responses
7) This created over 40,000 720 hour customers and the retail expansion to over 2,000 stores
As a Marketing Professor at the Fuqua School of Business at Duke University, I continually tell my students that launching a new product is never an easy task. For BIEL the hurdle was particularly high. Not only are we a small firm with constrained resources and limited access to working capital, but our product had almost no brand awareness or market acceptance. At that time our distributors in Europe were working through the medical profession to establish some limited distribution. Although this approach was working to some extent, we decided that we needed to take a new, bold approach and try to market our product ourselves and to do this through over the counter (OTC) channels. This led us to look for one or more retail chains that would carry our product. Just about two years ago we were able to get limited distribution in Boots UK Limited, the largest and most well-known pharmacy chain in the UK. Our next task was to generate sales even though we had no brand awareness and Boots was not willing to aggressively market ActiPatch®. This coupled with the fact that our prior marketing research indicated that consumers were skeptical of the efficacy of our product and thus were not likely to buy it just because they saw it on the retail shelf, told us that we had a tough road ahead unless we came up with a creative approach. Our challenge, then, was to show Boots and the world that our product would sell and we needed to do this by first making consumers aware of the benefits of our innovative product and then getting them to try it and spread the word about its efficacy. And we had to do this with a limited marketing budget. Clearly this was a daunting task, but one that I am happy to report was executed successfully.
Our approach was unique and innovative. We first settled on targeting chronic pain sufferers versus going after those with acute pain. Next, we used a combination of public relations, Boots customer reviews, charities websites, and social media to generate some initial buzz about our product. However, the key marketing initiative was to offer potential customers a trial product that lasted seven days at a price of about $5. We knew that if the pain sufferer tried the product for this amount of time that a clear majority would find substantial and sustained relief. We started this sampling program about 15 months ago and since then we have sold over 80,000 7-day trial devices. Another major benefit of obtaining these trial users has been the establishment of a massive email data base allowing us to survey them and in the process gain substantial amounts of data about how much ActiPatch® impacts their baseline pain, how they use ActiPatch®, how likely it is to improve their quality of life, and their purchase and repurchase behavior of our commercially available 720-hour product at the retailer’s regular price. The net of all this is that we can show retailers that by offering “skeptical” potential buyers the option of buying the 7-day trial product initially, the majority of triers find clinically significant pain relief and consequently will continue to buy the 720 hour product for years to come. Current estimates are that use of a 7-day trial product will result in about 50-60% of the triers purchasing the 720 hour retail ActiPatch® and over the next year these users will purchase another 2-3 devices. Thus, the life-time value of this newly acquired customer is substantial. We continue to track the sampling and the resulting sales and feel confident that this innovative marketing approach will continue to result in ever growing sales volumes.
Due to the success of this approach Boots positioned ActiPatch® more prominently in their stores and nearly doubled the number of their pharmacy’s carrying ActiPatch®. Not surprisingly ActiPatch® is currently their largest selling analgesic on their website. Building on this achievement, we just received an order from the second largest retail chain in the UK, Lloyds Pharmacy Limited, to stock 1,077 of their outlets and another one from Gordon Chemists who have over 60 outlets. In addition, we have received several inquiries from other retail chains who are looking to stock and sell ActiPatch® in their stores. The bottom line of all this is that we have found an economical way of launching our product into new markets and it is gratifying to see the resulting positive customer response after they try our product. This is because for the first time there is a solution available to them that enables the majority of the chronic pain sufferers to get substantial and sustained pain relief with no adverse side effects. All this leads to strong brand loyalty, great word of mouth promotion and multiple repeat purchases. It also means that these chronic pain suffers are able to improve the quality of their lives and decrease their use in systemic analgesic pain medications, including reductions in opioid-based analgesics.
Given this success we are now leveraging our newly gained experience in other markets. Thus, in Canada we have recently launched the sale of ActiPatch® through a distributor using the same “Try and Tell” program and this distributor is finding similar success. We expect to have some very large sales coming soon. More info will be announced when the ink dries on the purchase orders.
