Question

Topic: Strategy

Help Communicating W/ Customers After Oem Loss

Posted by Anonymous on 1/16/2006 at 1:34 PM ET 500 Points
Hi everyone, I work for a life sciences company that manufactures and supplies research reagents and kits to pharmaceutical companies and academic and government scientific researchers. We use distributors for international sales, but domestically sell our products direct. We also have an OEM-type relationship with another U.S. company similar to ours who takes our product and re-labels it as their own. The only mention that it is manufactured by us is a small line on the back of the instruction manual that I’m sure nobody notices. This relationship accounts for 25% of our yearly business.

Three days ago this other company notified us that they were no longer going to be purchasing from us. They have made their own products so will no longer need to purchase from us. Here’s the problem. How do we attract the customers of this other company who were actually using our product all along and probably didn’t know it. How do we say “you were using our kits all along” without saying “you were using our kits all along”? Also, how do we communicate this without bad-mouthing the other company? We are thinking to put ads in journals that this other company regularly advertises in and also look into purchasing these journals mailing lists. We have no idea who they were selling our products to, so it makes it rather difficult to communicate with them.

In the life science industry it is extremely important that your products are used in published, peer-reviewed studies that appear in journals such as Science and Nature. Our top-selling kits (those that are OEM’d by this other company) have many citations as our kits, and also are cited as the other company’s kits. Since their new replacement products will not have a proven history this will be key to getting the customers to come to us from now on. I’m quite confident that the new products the company has come out with will not be as good as ours. Also, in this industry, researchers get very upset when a company makes any change to the products they are purchasing if they are in the middle of a study. The other company is going to “pass one over” on the researchers and not make a big fuss over this. I personally think it’s a really bad idea and that they will end up losing a lot of business because of it.

Any ideas on how to find these customers, what to say to them and what form of communication would work best here? Sorry so long-winded, but this will obviously be of great impact to me and my company.

Any help is greatly appreciated here. Thanks, Karen
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RESPONSES

  • Posted by michael on 1/16/2006 at 1:42 PM Accepted
    Karen,
    You're dead on for the life sciences industry and the need to be seen in industry publications. A thousand years ago I worked for Hoffman LaRoche and this was a big issue for our purchasing dept.

    That said, there's nothing wrong with a full page color add that says, you can no longer by our trusted reagents from XYZ company. (snappy quote here about "never read the small print on the label, did you??)

    Now make an offer that's wide open to anyone to register on your website or contact the local sales person for shipping options even, heaven forbid, co-branding. What if you just replaced them?

    Hope this stirs the juices.

    Michael
  • Posted on 1/16/2006 at 4:07 PM Member
    We have a similar problem with the comapny I work for. We do work soley for the graphics industry, so often times another graphics firm gets the credit for our hard work without our name even in small print on the back.

    Purchasing the mailing lists of popular industry publications is a great idea for getting your name out there. If you do plan on doing this, remember that people tend to throw form letters away, but post cards they have to look at. You also might want to contact a fulfillment firm such as Century Lists. You can buy mailing lists of certain SIC codes in desired geographic areas for as little as .04 a name.
  • Posted by telemoxie on 1/16/2006 at 5:01 PM Accepted
    Do not forget to talk with your attorney. If it were me, I would review the paper file for that supplier page by page, to determine what (if any) agreement you had regarding contacting these folk directly.

    I really like the BASF ads - "we don't make the products you buy, we make the products you buy better". and so on - see https://www.basf.com/businesses/plasticportal/pp_about_testimonial_en.html
    After checking with the attorneys, I would be all over that BASF web site looking for ideas....

    ...oops - per Google search and https://digitallibrarian.org/
    apparently the phrase "We don’t make the products you buy, we make the products you buy better” was used by Amco. Anyway, I would use those two companies and that phrase as the starting point for a few hours of Google searches and look for related marketing white papers and case studies of similar companies for more ideas.

    p.s. I wonder if the attorneys would let you do a user satsifaction survey. Could you call some of the "end users" of your product and ask how happy they are with it? (again, see BASF). They will say, "we don't use your product", you can say, "We, yes, you do..." and take it from there.

    And, I would do my best to assess the down-side risk (if any) from other current and future customers fearing that you might market "their" customers directly.
  • Posted by Chris Blackman on 1/16/2006 at 5:32 PM Accepted
    Big oops indeed.

    I'd be taking out a full page ad in the trade journals that plays on the researchers concern their study will suddenly have lop-sided results.

    "If you have been buying XYZ reagents from ABC Company, and need to maintain consistency of supply for your longitudinal research project, read on:

    ABC has recently stopped distributing XYZ reagents which it re-badged under its own brand. If precise continuity of reagent formulation is important to your long-term study or research, you CAN purchase the exact same products you have been using by dealing direct with (your co name).

    Call our customer service and technical support team on 555-5555"

    Something along those lines, run past the legal team, and published wherever makes sense, might do the trick.

    Let us know how you go. Your experience is every marketer's worst nightmare.

    ChrisB
  • Posted by mgoodman on 1/16/2006 at 7:37 PM Accepted
    I like the informational tone suggested by ChrisB. The last thing you want to do is trash the other company or its products. What you want is to make sure that people who care about consistency are aware that you're not going to leave them high and dry when your OEM relationship ends.

    You may also be able to distribute a carefully worded press release to all the relevant trade journals with the information they need. Be sure to include a URL where people can go to "get the facts" and request purchase information and/or a direct call from one of your sales reps.

    Good luck.
  • Posted on 1/16/2006 at 8:57 PM Accepted
    Excellent advice from the above. The ones you seek were your customers too in the former arrangement.

    You will also want to be sure to market the high quality of your products and the benefits thereof. The benefits will be more important to the customers than the source.

    Your former partner will be looking at your customers, too. You will want to maintain the loyalty of your current customers while you are seeking the business of the other customers who had been served by your partner.

    Good luck to you.
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