Welcome to Science with Shrike! Today we continue our discussion about selling to scientists, specifically academics. Last week provided an overview of how purchasing works, and covered consumables. Now we will move to the bigger ticket items—buying equipment and selling to the university.
Equipment is vaguely broken down by how easy it is for a single principal investigator (PI) (=person responsible for the lab, aka faculty member) to afford it. Anything up to $10,000 is something an individual PI can afford, as long as they have funding. Items up to ~$50,000 are also possible. For single ticket items up to $100,000, you start needing very well-funded PIs… someone pulling $250,000/year on grants will have a lot of trouble buying something with a $90,000 price tag. Above $100,000, you are looking at writing instrumentation grants to get the device. There are some exceptions… notably, Howard Hughes Medical Institute (HHMI) investigators don’t have to worry too much about price. If they need the item, HHMI will buy it for them in addition to their regular funding.
The other angle is departmental and/or university purchases. If four people in the department can each afford $10,000 and they need a $40,000 instrument, they can work together to buy it. Similarly, departments, colleges or the university might buy equipment that their personnel need as shared equipment. These larger groups tend to be more time-sensitive. if they have $50,000 that they will lose if they fail to spend it in the next 3 weeks, they have to move quickly. Alternatively, if they get funding from the state, they may need to wait until that money comes through. If a grant is involved, it might take nearly a year before the purchase can go through. For example, Shrike applies for an NIH grant in February. This is when Shrike needs the quote for the instrumentation to help justify the grant. Shrike will know if the grant has a chance by the end of June. Best case, it won’t be officially funded until Sept-Oct. By Oct, it may be worth waiting a month until all the sales reps are worried about making year-end, so Shrike can get better pricing. Then Shrike gets the quotes again, and sees how far the money can go. By the time the product ships and the university pays, it’s next February. If the grant is rejected, Shrike may resubmit, which will add another 3 months to the process.
The other wrinkle with large purchases is that bureaucracies are sensitive to the appearance of corruption and wasting money. As a safeguard, they require more hoops for larger ticket items. This usually involves getting at least 3 quotes, and a whole bunch of other paperwork justifying why that particular vendor will be used. This is a nuisance for PIs, who prefer to think about the science instead of the paperwork.
Enter the miracle of sole source justification.
Sole source justification is a way to escape most of the purchasing rules. The idea is that some purchases may be unique, or only offered by one vendor. This happens a lot for specialty reagents, and/or specialty equipment. In these cases, there is paperwork called ‘sole source justification’ explaining why the product or service can only be fulfilled by one vendor. This is what an example form looks like
Having sole source justification ready to go is a cheat code for closing PIs who do not want to bother with multiple quotes. If they just have to copy and paste onto their form, that is relatively painless. This means you need to have the information ready for when they ask for it.
To be clear, sole source justifications are not equal to selling features. “Features you use to sell” and “sole source justification” can be overlapping circles on the Venn diagram, but they serve two distinct purposes. Sole source is explaining to a bureaucrat why your product is unique and what it does cannot be done by anyone else. For example, Fisher’s Attune NxT flow cytometer uses ‘acoustic focusing’ (don’t worry about what that is) to quickly get cells into a single-file line so that they can get blasted by the laser. While they argue it works better than the old ways, it’s really just a different way to solve a problem that’s already been solved (lining the cells up). Yet since no one else can specifically do ‘acoustic focusing’, now it can serve as the basis for the sole source justification—you absolutely need acoustic focusing because it’s better than the other ways, and your application requires that high sensitivity. In this case, when the PI asks the Fisher sales rep for the sole source documentation the sale has already been made. If the sale has not yet been made, you can bet having sole source justification is one of the checkmarks for the PI if they’re already asking for it.
PI equipment purchases
With or without sole source justification, when PIs buy equipment, there are four approaches Shrike has seen. In the first case, the PI already knows exactly what is wanted, potentially down to the model and catalog number. In this case, just give them what they want as easily and as painlessly as possible. Don’t waste their time with sales pitches or do anything else to screw up the sale. If you have sole source justification and it’s a big ticket item, let them know. This situation happens when people were trained on one particular instrument, trust one particular brand for a product line, or are trying to replace broken/outdated equipment. It’s an easy sale: ‘yes we have it’, or ‘we don’t have it, but we have 3 alternatives to that product’.
In the second case, the PI has a clear idea of what is needed, and wants to judge between a few competitors to see which is the best. A demo should be expected in these cases. For example, Shrike convinces the university to buy a new confocal microscope. Next step is to reach out to Nikon, Olympus, Leica (and maybe Zeiss) reps to spec out a potential confocal microscope and check image quality. Cost will be limited by the budget. If Shrike’s budget from the university’s central administration is $500,000 for the scope, it doesn’t matter if the scope is $400k, $450k or $500k because the university keeps any cost-savings, not Shrike. If the scope is $525k, sometimes extra money can be found, but that is variable. If Shrike is purchasing from start-up or other funds, where Shrike benefits from the cost-savings, money matters more, but is also more flexible (within some hard limits). For example, if Shrike planned to spend $20k on a plate reader, but has $50k available for equipment, an upsell is easier. When departments or groups of faculty are making the purchase, price will be a major factor. Department chairs understand ‘how much will this cost’ (and ‘how many faculty/grants will this help’) more than they worry about features, and are usually working from limited funds. Faculty will need to be able to make convincing arguments to them that the extra cost is worth it. If you are selling to the faculty, it helps them and you if you provide them with this ammunition.
The third case is where the students/trainees drive the purchases. This is common in larger, more established labs where the PI is not involved in the day-to-day of the lab. You sell the students/technicians/postdocs on the technology during your in-person visits, or at your vendor show or national meeting (they came to your table for free chocolate, pens, etc…oh and your shiny machine). The lab manager will be the initial decision-maker, and potentially reliant on specific trainees’ opinions. If you can figure out whose opinions matter the most, you know who you need to sell to. (Hint: if you’re selling specialty equipment, look up publications/presentations of the people currently in the lab to see who used that kind of specialty equipment in the past). While the PI is the one who ultimately signs off on the purchase, the lab manager is the primary gatekeeper. The ‘need to ask the PI’ routine is part game, part PI giving feedback/asking questions. Expect that it will take more than one visit, and the lab manager will come back with extra questions after speaking to the PI. However, if the PI is busy (the PI is always busy in a large lab), it is unlikely you will meet directly with them. It is also not unusual for PIs to be traveling or out of the country for a month at a time. Usually they have email, so this should not delay things.
The last approach is what Shrike calls the ‘new lab startup confusion’. This is named for the experience many PIs face when starting their labs. The PI has an idea about what they want, but are very brand and feature agnostic. They may not even know what brands are out there, or how to find any of these items in their purchasing software. This is where you need to know the Fisher and VWR sales reps. The PI says ‘I need a minicentrifuge that can spin 1.5mL tubes up to 17,000xg’ and the reps will quote them one as part of the total new lab package. Will it be yours? This happens for all of the low ($250-$5000) range equipment that faculty don’t think about on a regular basis. Stir/hot plate? PCR machine? Vortex? 37 C incubator? Even pipettors. In this situation, it is easy to upsell models… just be careful not to get priced out in case the Fisher or VWR rep prices out “a couple different centrifuges” for the PI to choose. How many is based on their experience and whatever deals they’ve cut with the other suppliers. With Fisher, you’re almost always going to be competing against ThermoFisher brand equipment (the equipment arm is distinct from the vendor side, and can be ordered via VWR too). In this case, you need to figure out what the PI needs, and give them one (or at most two) options that fit their needs. Especially for new labs, the more you can do to reduce confusion and make the quote/order process smoother, the easier the sale.
University-level purchasing
When universities purchase big ticket items, there is often a committee involved. However, in some cases, one individual will have the local expertise and drive the purchase/request. In this case, assume Scenario #1 or #2 above. If it’s not an individual, you’ll be stuck dealing with a committee. The university gets together a subset of potential expertise/stakeholders. They will solicit RFPs to various vendors that the committee knows (either by use at the university, expertise in the field, or DuckDuckGo). The committee will compare the proposals and weigh the relative merits. Then they decide to test a few out (for SaaS), and settle on one, or possibly a few solutions. The lucky winner will make tons of money, and everyone else loses out. Once locked in, the university will need to onboard users, deal with recalcitrant faculty and iron out the bugs. The more effectively this step is accomplished, the harder it will be for the university to change again due to inertia, and resistance to change.
How will the committee work? There are two broad ways the committee functions. In some cases, the administrators have an agenda they want to ram through. In this case, sell to the administrators, and make sure your product aligns with their agenda. If it doesn’t (eg if they already know who they want to go with), you won’t get the contract. If you do somehow manage to get the contract against their agenda, expect them to backstab you every step of the way. Other times, the administrators’ agenda is more product-agnostic. They’re checking a box to make other administrators, students, alumni or future students happy. Either way, the administrators running the committee (and those in the power structure who are on the committee) are key prospects.
When the committee isn’t an excuse to buy a predetermined product, the committee will function like most committees: two or three people will do all the work, and many will not even come to the meetings, including the most vocal guy who won’t actually use the product anyways. There are some people who can more easily sway the rest of the committee, so you can be more targeted in your sales.
One note on committees: if you have good pre-existing customer relationships (ie they prefer your product over the competition), they will help you. Especially if the university is looking to grant monopoly-status to a product, the current users do not want to change products. Depending on how cantankerous the faculty on the committee are, this can make or break the sale. If you have current users, you have advocates already on the committee. When Shrike favors one particular solution, Shrike is willing to help connect that rep with the relevant people needed to make the sale, and provide information needed. In general, the committee needs to be fair (no insider knowledge), so others on the committee will give competitors similar information/opportunities to ask questions. It also means even if someone is willing to bend that rule, it will happen verbally, not over email/text.
The process for committees is long. It will take the committee a month just to schedule the first meeting, let alone do anything. For SaaS solutions, committee members will need to test it out and see how it works compared to the other solutions. For big equipment, there will need to be a demo. If it’s too much nuisance to use the product, or too many weird bells and whistles, Shrike will dislike the product. Once that decision is made, the product faces an uphill battle. The amount of time Shrike is willing to invest in training sessions and instructions is proportional to how much the product can benefit Shrike. At least Shrike can DuckDuckGo things… boomers may need step by step instructions laid out for them, even if the same information can be found with a 2 sec web search. Remember that some of these people still use overhead projectors and transparencies to teach!
Depending on how effective the committee is, you might deal with people with widely different areas of expertise. For example, if a committee is trying to design a new lab, you will have the administrators who authorize everything, mechanical engineers/operations people, and the scientists who plan to use the lab. They will all catch different things, each of which can eat into discussion time.
However, the upside of surviving the gauntlet is much higher. The sales will be much higher, and with meetings spread out, you don’t have to devote too much time at once on the issue. However, good support can change fire-breathing faculty members into stalwart advocates once they learn how it works.