Repositioning for Growth
Pharmaceutical Relationship Marketing Company
Insolvent after $18M in funding and 7 years of losses, the company was struggling to articulate a clear value proposition to its market.
Stabilized operations, retained key staff and clients, repositioned as pharmaceutical relationship marketing firm, re-tooled marketing, sales and account management.
Doubled client list to include 14 of top 15 pharmcos, tripled revenues, brought the company to profitability, posting 14 consecutive EBITDA positive quarters.
Everyone told me it was troubled company but that just made me more curious, because everything I knew suggested it should be a successful company with a unique set of offerings. So I took a position there as COO to merge the technology and services divisions. A year later, I exposed the precarious but unacknowledged state of the company’s finances in a board meeting. The CEO forced me to resign. After the board of directors realized my figures were correct, I returned as the new CEO to accept what was now a turnaround assignment.
Removing Barriers to Growth:
1) Clarifying Positioning and Identity
The company’s clients did not understand what the company was or how to do business with it, because the company was clinging to its historical identity as a wannabe CRM software vendor while making virtually all its revenue from relationship marketing services. With the window of opportunity closing and no further capital available, it was time for the company to grow up and accept its destiny as a specialized vendor of marketing services primarily for the health care sector. I worked with the executive team and investors to reset expectations and create consensus around a new vision.
We started using the language of our clients’ and changed the job titles of all client-facing staff. On my evenings and weekends I created the content for a new Web site and hard copy marketing materials. We talked about enabling technology rather than licensed software and defined our niche as a specialized relationship marketing firm. Our clients responded with increased demand for our offerings. Growth accelerated further as we adopted industry standard methods for servicing our accounts and charging for our services.
2) Supporting the Value Proposition
The value proposition for a pharmaceutical brand was simple: on average, a patient served by one of our programs would purchase two additional prescriptions. But our company had done a poor job of articulating its successes and this was limiting growth. I created case studies focusing on the results and the ROI generated by the company’s programs. Using these we were able to make a strong case for adding a specialized marketing services firm to the roster of agencies for a given brand, which led to millions in incremental revenue.
3) Leveraging Unused Assets
Much of the company’s capital had been invested in creating a unique CRM platform enabling cost-effective creation of the type of highly tailored content scientifically proven to produce behavior change in consumers. This 8-figure investment had not been leveraged because the software languished incomplete. I made it a top priority to finish the software and migrate all programs over to it. This effort took more than a year, but it had some unforeseen benefits beyond the productivity boost by bringing the company’s staff together through an appreciation of these remarkable tools that made everyone’s job easier and clients’ programs more reliable and efficient. It also gave us a unique selling point, because we could now put in market highly sophisticated programs at a lower price point than the competition.
4) Developing Internal Talent
On becoming CEO, I inherited an organization with several high potential but underdeveloped managers. I could not bring in outside talent at market rates because I had to immediately bring the organization to positive cash flow and re-launch with no external funding. I was fortunate to have some smart people but needed to quickly transform them into capable executives. This went beyond typical mentoring and explaining to managers how to dress and behave around clients and stakeholders so I created a leadership development program staffed with a blend of internal and external personnel. There is little difference between professional development and personal development so this involved some deep and challenging work for those involved. Few things are more gratifying than watching someone grow into a role and progress beyond it, and I am proud of the executive team I created from the young managers I inherited. They are the ones who really turned the company around and tripled its revenues in our few years together. It was a privilege to play a part in unleashing their potential.