A growing number of companies—from technology start-ups to the Fortune 500—are participating in a phenomenon that goes by several different names, such as social media, social networking, the social Web, and Web 2.0. Although the experts can argue over the nomenclature, there are three important points that most agree upon:
? The use of social media is continually growing and evolving as more age groups and companies adopt it.
? Social media is still evolving and becoming more capable and value added.
? A new, more sophisticated and targeted generation of business-to-business (B-to-B) social media is building on the current B-to-B weaknesses of Twitter, LinkedIn, Facebook, and YouTube.
The social media evolution began with individuals connecting with each other over special interests on social networking sites, such as MySpace and Facebook. It wasn’t long before businesses realized that these sites represented a way to connect with certain consumer types and jumped aboard and created their own presence on these sites. Interactive social media campaigns are now a part of nearly every consumer company’s marketing communications strategy.
Although social media is rightfully viewed at this point as more of a tool for consumers and for companies that want to connect with consumers, there’s a growing body of evidence to indicate that more B-to-B applications are on the way. Businesses engaged in B-to-B communications have learned from consumer-oriented businesses that social media or networks are a way to connect with customers. In many ways, this has become the norm and the typical evolution of new technologies.
The growth of LinkedIn, the standard bearer of business-oriented social networking sites, illustrates the value of these sites as a way to communicate with key audiences for the many firms that market primarily to other businesses. Many companies in the medical device industry—on LinkedIn and elsewhere—have begun forays into social media and social networking. A search for “medical devices” on LinkedIn yields 479 groups, such as the Medical Device Professionals Network with more than 13,000 members. Another eight groups are focused solely on Stryker Medical, a leading orthopedics company.
Charlene Li, a former analyst with The Forrester Group and founder of the Altimeter Group, says that social media will become “like air,” and be pretty much everywhere. So if it’s acknowledged that social media is ubiquitous, or will be, the question remains for many: what are companies doing with social media? And have they been successful? The short answers are: companies are using social media primarily to market themselves; and yes, many have been successful or are well on their way to being so.
Proponents point to President Obama’s use of social media in the 2008 election, in which his organization claims to have raised $55 million in a 29-day period. The cable giant Comcast has gotten rave reviews from customers and the media on the company’s use of Twitter to perform customer service under the user name “ComcastCares,” which has almost 45,000 followers. Starbucks has more than 5 million “fans” on Facebook in its attempt to create loyalty to the brand. H&R Block is using YouTube, Facebook, blogs, and Twitter to reach out to young customers and prospects. On YouTube, its videos have been viewed more than 700,000 times since 2006.
Although B-to-B examples are more difficult to find, technology companies like Oracle, SAP, and Salesforce.com have made aggressive moves into the world of social media. Oracle, for example, boasts of an official Oracle Wiki, an account on Twitter, and an Oracle OpenWorld room on FriendFeed.com. The enterprise software company has close to 11,000 followers on Twitter.
It’s somewhat ironic that although the Internet is the ultimate tool for mass communications (put up a Web site and anyone with an Internet connection can see it), what makes it so useful is its ability to help create communities for smaller, specialized audiences that are geographically dispersed. The lucrative and very critical medical device industry provides the perfect example. Although it’s a large market that earns $225 billion annually, compared with other industries in the B-to-B space, it’s extremely specialized, and has a smaller universe of participants than most other business sectors. The medical device industry is different in other ways, as well, and this gives rise to alternative uses for social media and social networking.
Social media is being used in the medical device industry in a number of ways, including the following:
? To market products and build loyalty among customers like doctors, nurses, and patients.
? To create a feedback mechanism and a customer relationship tool.
? To find partners and to collaborate in the all segments of the product life cycle.
Bringing Products to Market
Much has been written about the marketing potential of social media; however, its role and potential for aiding medical device researchers, venture capitalists, and manufacturing firms with innovation and product development is often overlooked.
“Social media has influenced the marketing area first because it hasn’t required companies to substantially change the way they do business,” says Kipp Bodnar, a social media consultant who blogs on his socialmediabtob.com Web site. “From a product research and development perspective, we’re still in the beginning stages with social media. But we are seeing larger companies using social media tools to collaborate within their organizations and even externally to ask for feedback on products in development or commercialization.”
The transparency and openness that is part of the social media movement comes with a potential challenge. In this competitive environment, researchers, innovators, financiers, manufacturers, and just about all participants in the medical device industry need to tread the fine line of accessing the community’s collective knowledge and specialized skills while also protecting valuable intellectual property, patent rights, and trade secrets that are the economic backbone of the sector. The medical device technology industry is highly fragmented, with many specialized institutions, companies, and individual participants, and has a complex and highly regulated product development cycle, one unlike most other industries.
There are very few medical device companies that can bring a product from original idea to full production without an evolving array of service providers and strategic partnerships along the way. Consider that despite industry consolidation, approximately 80% of the more than 8000 U.S. medical device firms employ less than 50 people each. As CEO of a small medical device company myself, I know first-hand that rapid collaboration and partnering is a way of life in this industry. Success for medical device manufacturers requires continual research, as well as a focus on promotion, internal knowledge sharing, speed, and collaborative partnerships.
Let’s paint a scenario that illustrates the interdependence of different and diverse segments within the medical device industry. It begins with an individual or small organization (a research lab associated with a major university, let’s say) that innovates a potential new device technology. A research partner is likely needed, as is a development partner. Venture capitalists or some other organization is needed to fund the further development of this potential new product, as are service providers, such as patent and trademark attorneys. At some point in the process, a technology transfer agent may be called on to market a potential new product (or its core technology) to an industry veteran entrepreneur for new company creation or licensing to an established medical device company or institution. There are many more clinical, legal, and regulatory professionals needed for the pursuit of market approvals once the product is in final stages and then the use of manufacturers, distributors, and marketers to get the product built, distributed, and marketed around the world. There may also be a need for communications specialists to drive education, visibility, and branding of the technology and organization that initially developed and patented the device to lay the foundation for outreach for continued funding via venture capital, etc.
Many medical device firms, and other organizations within the industry, are using online platforms that streamline and empower all sectors of the fractured medical device ecosystem by providing a secure, online environment for rapid technology assessment, trade, collaboration, and the ability to find partners and specialized services rapidly and without utilizing any confidential information.
Social media is also extremely helpful when looking overseas for help and becomes especially important when a firm within the industry is trying to develop or repurpose a product for overseas use and adoption. Many firms may not have the expertise or infrastructure to market their products internationally, so they may have forgone this revenue-generating opportunity in the past given the difficulty of finding qualified partners to secure necessary local approvals as well as marketing and distributing the device. Being able to locate these organizations through specific searches and rapidly through enhanced social networking makes it more possible for all.
Like most companies using social media, there’s no doubt that medical device companies are and will continue to use social media to market themselves and their products. A recent survey, Social Marketing and the Medical Device Industry, sponsored by LifeScience Alley and conducted by MediComm Consultants, indicates that firms in the medical device industry are in the early stages of using these new tools. In fact, most medical device companies have been using social media for less than six months and for most, the marketing department initiated these communications.
When asked about the top uses of social media within their companies, 40% said it’s used to reach key influencers. Other uses include understanding the consumer and competitive landscape (39%), creating brand communities and fan pages (32%), media relations (31%), lead generation (31%), product launches (28%), product reviews (19%), and monitoring conversations (6%).
As social media opens up new communications channels for marketers, FDA regulation (or a lack of it) has caused many within the industry to tread cautiously. In November 2009, FDA hosted a public hearing featuring feedback from pharmaceutical companies and medical device firms on regulatory issues surrounding direct-to-consumer (DTC) communications via social media versus traditional marketing communications techniques. Because FDA has yet to issue clear social media guidelines, many firms, particularly those whose communications filter directly to consumers, must be extremely careful about how they use of social media. It also won’t be surprising when communications geared toward other businesses (partners, doctors, healthcare institutions) are governed by whatever guidelines created by FDA on social media.
Feedback and Customer Service
According to the MediComm survey, the top use of social media within device companies, at 47%, is to manage and monitor customer feedback, which in many ways represents a combination of future product development, sales, and the building of brand loyalty.
Once you delve into social media, it’s easy to get used to its many benefits. It can be used on the front end of product innovation and development, to team build and collaborate globally, and to connect with all of the stakeholders needed to get a device to market. On the back end, it provides an opportunity to gauge feedback and customer experiences in real time from product users and influencers, whether they are doctors, hospitals, patients, or other groups involved with the product life cycle.
The question for medical device firms should not be whether to engage in social media in 2010, but rather how to leverage the new technologies and communications platforms to create a competitive advantage or at least begin to use it so that it doesn’t become a competitive disadvantage. Increased speed and global efficiency are critical today. At the very least, companies should be using social media and specialized social-business networking sites to help them connect specifically and rapidly with others within the industry they share important synergy with. Used to its fullest potential, social media can change the way device companies market to prospects, communicate with customers, and find and interact with potential business partners. While these initial efforts can feel foreign at first, the capital costs are typically low, which is good news for the budget-conscious as the economy continues a slow recovery.
I’m willing to bet that within most medical device companies there are early adopters who are already using social media to perform their jobs. The challenge for medical device firms of all sizes is to get its full workforce to adopt and harness the power of social media tools as part of everyday activities. They will become normal like most new technologies—the key is to get started now.