Sakaduski Marketing Blog

We had some requests at the Chicago Meeting to re-run this blog, which I have updated.

The Field Guide to Convention Wildlife

From years of attending dental industry conventions, Joe and I have compiled this handy field guide to the species frequently observed in that habitat. See if you recognize any of them:

1. Doctorus obliviata (The Wondering Doctor) – usually spotted walking slowly in a serpentine pattern, gazing up, without any clue as to what he’s doing or where he’s going.
2. Papyrus accumulata (The Literature Collector) – can be identified by its bulging bag of brochures, coupons, flyers, and catalogs, most of which will end up in a recycling bin at the end of the day.
3. Pathus coagulatii (The Aisle Clogger) – generally seen stopped in the middle of an aisle, or even better, an intersection, engaged in a long and involved conversation, usually including hand gestures that jab passersby. This behavior is often preceded by a sudden stop, so as to force a collision with those walking behind.
4. Wheelium rotatus (The Wheel Spinner) – a dentist, usually one netting $400k+, who will stand in line for 20 minutes to spin a wheel for a pack of gum.
5. Baggus tripata (The Bag Dragger) – an individual who drags a wheeled suitcase around the show floor, while others trip over it.  Particularly common during peak periods when traffic is most heavy.
6. Bambino strollifera (The Stroller Pusher) – an increasingly endangered species due to new regulations at some shows.  Can be found pushing a stroller containing a screaming child through the hall, accomplishing both to clog the aisles and inflict various injuries on those who collide with it.
7. Baggus pendulumnus (The Tote Bag Swinger) – Closely related to Baggus tripata, this species can be distinguished by the pendulum-like motion of a full tote bag, which often results in clipping those walking in front precisely in the backs of the knees.
8. Samplus grabbiosa (The Sample Grabber) – Most often recognized by the darting motions of its hands as it scoops samples off counters while walking by.  Has excellent vision. If any boxes behind the counter are in their range of vision, they will most definitely inquire about its contents and ask to see what’s inside. Juveniles of the species are particularly prevalent.
9. Phonus blatherus (The Cell Phone Yakker) – Easy to spot as this species is generally oblivious to its surroundings.  May be stationary or transitory.
10. Juvenilis non-babysitterus (The Child Dragger) – This species mistakenly anticipates that its young will enjoy attending a dental convention and when it becomes apparent that the juveniles are becoming unmanageable, they entertain them by encouraging them to test various pieces of dental equipment, particularly those that can be stained, misaligned, or broken.
11. Exhibitus ripofferii (The equipment stealer) – Rarely sighted, but known by the disappearance of equipment and display materials from exhibit countertops. Much entertainment can be had by affixing clear fishing line to appealing items before placing them in tantalizing positions on the counter and attaching the other end to large rocks, load-bearing pillars, or the company president’s legs.
12. Conventiana comantosa (The Worn-Out Conventioneer)  –  This often overlooked species can be recognized by its bloodshot eyes, zombie-like walk, and rumpled plumage. Having attended far too many meetings, and been at the Sirona party until the wee hours, this sad species can be seen passing through the hall in a hypnotic state.
13. Dentista fullofhimselfus (The Dentist Blow-hard)  –  A predator species guaranteed to clear out any exhibit booth, this species perches in front of the exhibit and warbles loudly, primarily for his own amusement, for long stretches of time.  Other species flee, allowing this species to rule the roost.

The Chicago Midwinter, by most reports, was a surprisingly successful meeting.  Our clients reported brisk sales on Friday, with the usual tapering off as the meeting wore on.  Most talked about products seemed to be the A-dec chair, a gorgeous work of art and a bold move on their part; OraVerse, an injectable pharmaceutical product that reverses local anesthetic (halving the time of numbness); and the Identafi 3000 oral cancer screening device (http://www.trimira.net), which we are delighted to be involved with through our association with the GPS Clinical Sales organization (www.gpsclinicalsales.com).  This product is deservedly receiving a lot of buzz, and represents the next generation in oral cancer screening.  The Oral Health America Gala (a pro bono account of ours) was also successful, so even on the nonprofit side, the predictions of gloom and doom seemed to fall away to some extent.  The ADA in Hawaii may be another story…

The economic bad news is coming from everywhere. It may take a while to figure out how it affects the dental industry, but eventually it does. This morning, a major market leader announced an employee layoff. The word is that is was done because of slumping sales. That economic news has immediate impact on the dental industry. When the clear leader has sales woes, that means there are sales woes. No more talk about a recession-proof industry; hard times are here. Like other industries, ours has its own unique set of economic markers. Patients had money to spend on discretionary procedures. Anything cosmetic: whitening, veneers, adult orthodontia, implants, to name a few, meant more procedures and more income for the dentist. The dentist now buys more from the dealer. Digital pans, CEREC, and other high ticket items mean more profit for the dealer and more business for the manufacturer. The manufactururer adds capacity, hires more salespeople, attends more tradeshows and is willing to give more to the dealer to keep the end user happy.

What happens when the well runs dry? Patients lose jobs and postpone or cancel procedures. The dentist sees the cosmetic bubble bursting and decides not to invest in the the practice for the short term. Dentists are consumers too, and they begin cutting back on the number of tradeshows they attend. Dealers begin to reduce inventories in the light of reduced purchases from their customers and begin to demand bigger financial contributions from the manufacturers to cover the cost of catalogs, sales meetings, and promotions. The manufacturer, who has already reduced costs by integrating lean manufacturing practices and outsoucing components to overseas companies, now has no choice but to lay off employees to survive, and that gets us back to the beginning of the story.

Are there ways to fix the problem? Sure, but it means shifting the paradigm, thinking outside the box or (insert metaphor here).

Over the past 10-15 years, the contol of the dental business has shifted from the manufacturer to the dealer. Years ago, the dealer did a lot for 40%. Now they want the manufacturer to pay for their catalogs, sales literature, sales meetings, yet still give 40%, or more, discount. The money is just not there anymore. The manufacturer needs to determine the value the dealer brings to the transaction and pay accordingly.

The manufacturer needs to consider two key aspects of their business: tradeshows and sales representatives.  Regarding tradeshows, how many is enough? Is Yankee or Hinman worth the investment anymore? The ADA is in Hawaii this year. Are you willing to sacrifice your own vacation, but subsidize dentists’ trips to Hawaii by buying booth space at this show? And have you checked hotel prices in Cologne? Try skipping a bunch of state and local meetings and see what happens to your sales? MY bet is they don’t go down. The last issue is sales representation. If you are a small to midsize company ($5-25 million in sales) should you be employing dedicated sales representatives and owning all of that human capital? Dedicated reps mean base salaries, commissions, bonuses, benefits, and travel expenses. Although some dealers are loathe to deal with independent reps, most dealers are not. There are a number of organizations that can hire, manage, pay, train, and motivate sales representatives. This results in sales coverage for the manufacturer at a fixed cost of sales.

Lastly, there is the end user. It is time for dentists to realize that they must increase the value of their practices and raise the standard of care to their patient bases. They can do this with little investment. New products such as devices for oral cancer screening and saliva tests for periodontal disease and HPV are new areas to increase patient awareness and to provide new sources of income for the practice. Waiting for the bleaching market to come back is like waiting for Godot.

A lot has happened in the past few months which will cause a lot to happen over the next few months. And what is going to happen will be big, so if you were ever considering some big changes in your business model, the timing may not be better.

In the February 9th issue of Newsweek, Craig Barrett, the retired chief executive officer of Intel, talks about the fact that market share is won or lost during transitions.  And if ever there was a period of transition, this is it.  He points to the interest in fuel-efficient cars that allowed Toyota to take share from American automakers. 

He makes the point that although it is responsible for companies to cut back during times of financial crisis, those that cut back on research and new product development “do so at their peril.”  The bottom line is that you cannot save your way out of a recession, you can only invest your way out.

It’s difficult to take a long-range view when your sales are dropping, but the companies that survive this downturn may well be the ones that invest in innovation and competitive advantage.

Cognitive psychologists at Ohio State University have found that consumers who hold an object for 30 seconds or more are far more likely to buy it — and will pay more to do so.  The researchers split people into groups and auctioned coffee mugs off to them. Within each group, some bidders got to hold the coffee cup for 10 seconds beforehand, others for 30 seconds. On average, subjects who’d been allowed to handle the mugs for 30 seconds bid 37 percent more than subjects who had handled the mugs for only 10 seconds. The researchers speculated that holding the mug allowed participants to form an attachment that made them not want to give it up.  Read more here: http://www.sciencedaily.com/releases/2009/01/090107134535.htm