BoneChat call #19 - Mark Maloney - Fraction Marketing for Startups

All right, we're live with Mark Maloney. He's a BoneChat member. He was an early one. Uh, quick intro, he, he's an industry veteran with at the big places like Stryker, J&J, Biomet, and he's been a serial entrepreneur with many startups. Sales background, uh, currently the CEO of VNOPS, a compliance company for medical practices. And, uh, and the— he runs a dealership called Orthotecnic, which I think is sports medicine. And I'm gonna hand it over the mic to Mark. Oh, we're talking about fractional marketing for startups today. Take it away, Mark.

Yeah, thanks a lot. And I think, the reason today's talk about fractional marketing kind of resonated with me, and I was happy to lay out some ideas and things, is that, my VenOps company, I started it, in basically we wrote software because I have a, a digital software background in medicine. We rolled out eTrauma, which was the first digital imaging play, the first EMR play for orthopedics. Uh, so, you know, for a baby boomer, I'm pretty digital. It's the, uh, but I, I've been hugely frustrated with trying to grow VenOps. Uh, VenOps is a compliance service that is mandatory by Health and Human Services OIG for medical practices, which is almost universally ignored unless they're big enough to afford general counsel, have really MBA management. In other words, have a real compliance plan. And so we've been, we tried to grow that so many different ways, you know, direct sales, agency sales, uh, you know, inside sales, uh, LinkedIn marketing. And it's just been so slow. We got a little over 1,000 practices. So in December, another industry veteran and I, Jim Jones, and a marketing veteran named Kat Valai, both healthcare, both medical device, both medical practice-centric. Started a, a marketing company out of, out of frustration. We said, we're gonna find a way to reach the decision makers that are called doctor or CEO or administrators. So that was kind of the, the genesis of this. So I'm actually also a pretty good example of the fractional marketing idea. You know, as an individual, I'm chief sales officer for a couple of different companies. One is Tempita, which is an EMR accelerator out of Phoenix. Our marketing company. Of course, I wear that hat as a board member. I'm an integral part of the process for a Canadian company called JointRep, which is actually a cartilage company, not a joint, total joint company. So I'm kind of an action junkie in that regard. I like to do a lot of different things. I've also, by the way, owned 2 search firms. They were small. I'm not— I wasn't nearly— I wasn't a very good recruiter. Like Tiger is. Both of my, both of my search firms were mostly contingency-based. They were in orthopedics. My, my, my graduate degree program at USC was in behavioral analysis. So I, I was really, it was almost more of a lab of behavioral study and research than anything else. I was a certified activity vector analysis, which is kind of like a DISC program, you know, the personality programs. I actually brought that to Stryker. I'm the guy that you can blame me for that way back then. Wow. And so I, every time I got the resume of a high performer, anybody that said they were number one and they were with a quality company like a J&J or Physiocontrol or some, any old company like that. I would always bring that guy in for an interview or that gal. There weren't that many gals. And I, it fascinated me as kind of like a Malcolm Gladwell sort of research stud—

study.

And what was cool was that I learned that they all knew why they were number one. They were hugely self-aware as individuals of why they were so good. And what was interesting was it was always something different. It was not like the same thing over and over again. It wasn't like they were all super fast. Um, so anyway, let me— I've got a slide deck which will stimulate some conversation a little bit later. Do you mind if I show that?

Absolutely.

Yeah.

Okay, good. Here we go. We called our little new band of brothers and sisters, um, Healthcare B2B Pros. And let me I don't know why I always struggle to show the— here we go, I got it.

There we go.

The only thing about Zoom is you get that floating bar that always gets in my way. Um, Fractional Marketing 101. Okay, here we go. So, this is kind of, this is the landscape we're all in. Okay. So one of my mantras as a sales leader from day one, a guy who, when he was carrying a bag, was pretty consistently, you know, somewhere in the top 5%. I kind of did everything in the medical business kind of like I learned it in the Army. And I was in the cavalry. Cavalry basically is all about gathering information. You gotta see everything. You gotta see the landscape. In fact, when I joined Stryker, I moved here from Germany and they're one of their first sales forces. There was no sales training or product training for several months. I just kind of learned, I just pretended I was doing recons. The, the key part of most salespeople that fail is that they're not showing their product or telling their story to enough people, enough doctors. Enough prospects. So that's number one. They don't see it, they can't buy it. The landscape today— I'm preaching to the choir— is information overload, and access to docs is incredibly difficult for new reps and even seasoned reps. You've got value analysis committee, okay? The great Satan, the great Antichrist, that hospitals have finally figured out how to build a dam to prevent new products from going through. You know, they They tried different ways through the years. Way back when, they tried to tell reps that you can't talk to our doctors without our permission. Well, we ignored that. Then they tried to tell the docs they only could use one or two products to talk. The docs then told them to go screw themselves. They weren't going to do that. Finally, they figured out that if they use their kind of legal arm and talk about safety, efficacy, and, and everything else, and product approval. They could figure out a way to build a process. And at first that was in-house for a lot of these big hospital systems. But we figured out pretty quickly who to sweet talk and take out to dinner and get to know and everything. And some of us really figured out a way to short circuit even that program. But now they've outsourced it to a third party. And they, you know, they're a lot, 3 states away, or, or you can't get to them. So it's a third party and it's real easy to to, to kind of block you. And of course, declining trade show attendance. We all know how the Academy was. So in a traditional new market launch, you know, you get a great product, okay, a faster widget, cheaper widget. You get your KOL group, advisory board, whatever. You hire VP of Sales and Marketing. They hire regionals. You know, you make your marketing plan, you plan your sales collateral, marketing collateral, go to trade shows. And then the, the regional guys hire independent dealers that know the doctors that have relationships because this is kind of a relationship business traditionally. And marketing goes to shows, drink too much, and take people out to eat. Okay, the alternative market launch, which I think might suit today's market even better, is you get a great product, you get co-als, and the first thing you hire is your marketing guy. You don't even hire sales. You just, maybe you just hire a marketing guru. This person orchestrates like a project manager, a social media campaign, a lead generation campaign, an awareness campaign, a branding campaign. And they find early adopters because, and they go directly, you know, via digital outreach to key doctors, either doctors that are prominent on LinkedIn, Or you can use Acuity or somebody to figure out who is putting in the most widgets or joints or whatever it might be, doing the most of this, most of that. And you go after those individuals and you use those individuals locally then with your marketing team to gain— you do a full-court press, you know, like Eisenhower in Normandy to get product approval, because product approval is still a matter of the amount of energy and resources you can bring to get approval with the right doctor. The biggest problem dealers have is, is this is not built into the numbers. We don't have a marketing team. And I'm a dealer. I know I don't have somebody sitting in the office with nothing else to do except overwatch that marketing process and, and make sure Greenlight didn't lose this or they didn't lose that. And then check when the committee is going to meet. So it's kind of early on, you know, it's a spotty approach at best. Unless you're a big giant dealer like the CrossLink dealer in Atlanta, you know, several hundred million dollars in sales, they, they can do it like a regular company. And then of course, after you get product approval, the agents can bid or at least jockey or market themselves for the rights to sell it. So what we've done at Healthcare B2B Pros is we've taken sort of a fractional approach aimed at a startup company or a young company, that doesn't really have a marketing department per se. They don't have a director of marketing, VP of marketing. You know, even a marketing guy fresh out of college is probably 80 grand loaded for the cheapest you could get. And this— but they need to have that to increase awareness and demand, to create actionable leads. We can help them do this with a greatly reduced time and cost. By being fractional. You know, you know, the traditional cost of investment for marketing and sales versus fractional, you know, everything costs money and it's all real expensive. And a lot of young companies, you get, you have a founder, an owner, 2 or 3 other people, a sales team, and that's it. And the sales team is mostly independents. They don't have really a lot of marketing. So this is kind of the, the, what we have put together. And I'm presenting this, I'm not trying to sell this, I'm trying to really solicit feedback and see what you think of it. We first of all knew that we needed, if we're going to go direct to key users, we needed a really good data source that was alive. And Definitive Healthcare, although very expensive, meets that need. Constantly updated. It's probably the best in the business for just data source that's live. You're not, you're not really hiring a list that's dead. You're hiring a list that is renewed literally every month and kept alive.

Mark, what is that? Is that, is that surgeons' names, hospitals, procedures?

Anything.

I can get the CEO. I can get the name of the CEO. I can get the partner, the owner, the doctor. I can get literally anything, and we got it for medical practices and doctors and medical practice leadership. And they have another channel for the hospital. Like, for example, I can do a search and tell you which medical practices own ambulatory surgery centers and that are private. Okay, that's a great, that's a great target list. And then I can also tell you, I can also do a search in, in after specific doctors that very specifically do kind of procedures, uh, you know, like sports medicine or something like that. So we've decided for our outreach to focus on email marketing, uh, because we think it gives the greatest return on investment. Um, we also include in this package search engine optimization, and you'll see why, because lead generation is all about a proper landing page and a proper call to action and some of the other stuff that we all know about. Secondly, third, fourthly is the social media presence. And that's some of the usual suspects starting with LinkedIn. The statistics on LinkedIn for medical professionals and medical professional administrators and management is phenomenal, in the millions. This is kind of the route we take. Okay, we work with the company to shape their message. I was an English major. I'm a good writer. We are experienced in healthcare. We know the market. We have other people of similar backgrounds, actually other, other English majors. So we create good content, highly targeted using the data source to increase awareness, to generate leads, and shorten the sales cycle. And the 24/7 thing is my realization that a, a digital marketing machine has to run kind of silently in the background 24/7. It's got to be putting out emails, putting out LinkedIn messages, all of this stuff without any sort of hands-on approach from the key people that you have in a small, young startup company. And we all know the rule of 7. You know, most, most reps give up after 3 or 4, but you know, this is, this is what it is. And I've heard people say that in the digital world, the rule of 7 is really the rule of 15 or the rule of 20. So I don't know what it is. I just know that it's, it involves a lot of repetition, and it has to be creative repetition or they will turn you off. This is that 24/7 in the background approach. This is a busy slide. I won't go through that, but down in the— down here where it says— wait a minute. The only— the things to look at here as far as email marketing are openings and click-throughs. And that's how you can tell that you've engaged. And so here's a typical thing. My VenOps company did a campaign that started 2 weeks ago, started with 2,000 contacts. Of those 2,000 contacts, about 350 50 opened the email.

The first— that's really good. That's really good.

That's good. Okay, well, on the second email, we got an 87% open rate. Okay, so 200 and something or 300 and something of them opened. And on the third one, uh, we, we got an equally high, uh, number with a 50-something percent click-through rate. So, you know, those numbers, those are really good numbers.

Huge. Those are huge numbers. Yeah.

Um, speed. Yeah, anybody who's ever read Malcolm Gladwell knows that the only measurable thing that a sports agent can tell when they're looking at a 12-year-old or a 14-year-old is speed. And as a sales leader, one of the things that I always look for in a sales rep, a new hire, was how quickly did that guy get to first base? How quickly did they initiate a trial, a dinner, that first sale, uh, that speed to, uh, is, is really critical. So what we do in this plan is we give our client— we give them results in the first month. We try to move as quickly as possible to that lead generation. We'll talk more about that. So these are our deliverables, and that's our initial price. We start off with a low price of $2,500 a month. And which, you know, for marketing costs, that's pretty darn low. But we, we, we kept it as affordable as possible for young companies. So data source, the email marketing, marketing, I've already talked about this search engine optimization. All of this comes into it. We also are going to throw on some add-on services. We can increase your social media LinkedIn to 4 posts a month. We can do LinkedIn marketing. I have a, a partner out of San Francisco who was, when we first started working to get together in Kyiv, Ukraine, that does incredible LinkedIn marketing. So we can give you 5— you give us 500 targets, 500 doctors' names or administrators or whomever, and, or tell us to build a list of 500, and then we'll message them twice, um, in the month, which is a lot of LinkedIn marketing because, you know, the limitations on LinkedIn, they don't let you just do this automatically. All of the LinkedIn marketing that we do there is organic, that is, it comes from an actual human. Some of the other add-on services are like newsletter marketing stuff, website development, Uh, you know, and so forth and so on. I want to draw everybody's attention to, for thinking purposes, to the lead response and qualification, because I think this is the area that a client will drop the ball. Like, for example, that email campaign that we just did for VinOps, we're going to wind up with 150 potential leads that have engaged What's gonna happen to them if those go on my desk? As busy as I am, they're gonna die. And so you gotta think about that ahead of time and say, okay, if we hand you a, a potentially, uh, hot lead or a warm lead or a, a somebody who's engaged, what are you gonna do with it? Uh, cuz if you don't know what you're gonna do with it, you're gonna drop it. And we just had a client, um, out of Texas that has a, uh, what's called a, um, a ROI company, which is a, um, a company that goes in and gets information for lawyers and second opinions and everything else. Um, we, we basically, uh, we took them on as a client in December because we know these guys, and the leads that we've given them— we met with them earlier this week— they have not followed up on one lead, and it's—

you can lead them to the water, but you can't make them drink. Yeah, some— yeah.

Anyway, so I'll stop my sharing. I'll stop sharing here. Like, that didn't take me too long to go through, did it?

Perfect. 20 minutes.

Yeah, if I'm on the clock, I probably went too fast.

All right, John's first question.

Hey, thanks, Tiger Buford. It's good to see everybody. Uh, been away for a while, so this is good to see you guys. I think one thing that was really important that Mark stated and something that I've noticed is that typically in the world that we work in, marketing and product management, which in our industry can be very, very similar, are vitally important and becoming more and more important. And they typically don't get the— and I'm an old sales guy— they typically don't get the respect from the sales guys. And the engineering folks, right? It's like, we'll just take them out to steak dinner, somebody else will just use it, right? But the truth is, I think in the world that we live in, and Mark really highlights this and has identified this need, is that it is truly a fairly sophisticated art and craft. And it's very, very valuable. And it truly is, there's science involved in it, you know, when you really analyze things like voice of customer and things like that. So I just wanted to reemphasize how important it is. And Tiger, I'd love to hear your opinion. In the world we live in now, it's probably 10x as important as it once was when we were just knocking on doors and talking to people. Now people are getting their information in the digital world, and so really effective and sophisticated marketing is probably more important than ever. So yeah, that, that's, that was my little lecture. Good to see everybody.

Well, I couldn't agree more. And I was a sales guy. And frankly, I thought the marketing guys were, you know, were, you know, kind of, kind of soft at best. I mean, and coming out of the military, you know, you know, I was a field guy. I was a combat arms officer, an aviator. I hated staff officers. In fact, one of the reasons I got out was I was getting ready to make major and I just couldn't stand that rank. And that's all they did. Um, and so marketing guys reminded me of that same mentality, and they just think they're so smart and they can't do anything, and they, you know, I didn't respect them. And a real-life experience is that when we were cranking up eTrauma, we sold 3% of our company to Smith Nephew. They gave us a million dollars, and The deal was made by marketing and they were sharp guys. And then they turned that deal over to sales. Sales told marketing at Smith Nephew to go screw themselves. They said, we didn't make this deal. We don't want to sell digital. That's not what we, we sell metal. Take this back to wherever you got it. And literally the deal went to hell. We had to sue Smith Nephew to get our money, to get our 3% back. And get them out of our kitchen, so to speak. We didn't give them their money back. Um, and it was— yep, it's where I learned that Smith Nephew, at least the marketing guys, were actually the brighter bunch. You know, it was—

here's my, here's my favorite analogy, Mark. So if— let's take a football analogy. So sales is your front line, okay? They have to grind it out every day. Without the front line, nothing happens. They create the opportunities. Your marketing is the overpaid wide receiver, and they only— they can totally bust a game open with one play. And they both need each other. You know, the, the wide receiver needs the, the line every day, and the line needs those big plays. And actually, if marketing does a great job, it should set the sales team up for success. I mean, you can double or triple sales with a great marketing campaign. So anyway, I thought that was a good analogy.

It is a great analogy.

All right, Stu is up.

Hi, I just, uh, I just wanted to kind of echo John's comment, um, around, around the dynamic, uh, with valuing marketing, and I've found, because I ran into that dynamic, I'm not a marketing guy myself, but I definitely value it and understand it's vital. And kind of getting up that wall of resistance that you mentioned with kind of engineer, engineering side and other folks who may not necessarily see eye to eye on the importance of marketing. Nowadays, you have a lot more tools at your disposal to show the connection between marketing and sales. If you build the backend properly, right, you can trace a view to an action and hopefully at the end tie that to the revenue from a sale. So That was my only comment, was to leverage that if others are struggling with, you know, getting organizational buy-in for the importance of marketing.

Good. Yeah, good comment. Yeah, digital marketing is infinitely measurable. I mean, you can get, you know, like Mark said, you know how many people clicked on the landing page and how many people if you're asking for an email or if you're asking for a phone number, you know how many people gave you that. Um, it's— and the other, the other thing I would say that a lot of people don't get right is digital marketing is all about trial and error. So you have to try 10 different pieces of content, 10 different stories, and you see which one sticks. And most companies, they put together a plan and then they do their plan for months and they watch the results. Well, they really should do 10 plans because— and then you drop the other 9 or 8 instantly because you can see there's no pull-through. So go ahead, Mike.

Yeah, thanks, Tiger. Thanks, Mark. This has been— this is helpful. I'm, I'm curious. I think what you're speaking about a lot is content marketing. So can you give us some examples of content in your experience that has converted, whether that's on LinkedIn or email, or is it video? We have to be thinking about content that our potential customers and prospects want. We've got to bring value to them. We can't just say, hey, do you want to try our stuff? Do you want to try our new product? Do you want to do this? You want to do that? It's like that guy at the, you know, in the streets of New York who opens up his trench coat and say, hey, you want to buy a watch? So we're trying to create content that is interesting and brings value to our customers, even though, even if it's not directly related to our product, but is generally related to the area in which our product addresses. So can you give us some examples of some content that has worked well in your hands?

Well, I could show you. Um, actually, let me pull one or two up here. Let's see here, give me just a minute. Let me share my screen again. Okay, Glindor, uh, another one of my hats. Okay, this is a company that, uh, UC Berkeley machine learning data, big data analyst type people, uh, data scientists wrote a software that completely sanitizes or removes PHI, or protected health information, from images, documents, audio, video at the point of origin. It's like if you want to, if you're a hospital or a hospital system, healthcare system, and you want to monetize your data, okay, you've got to sanitize it. You have to remove the PHI. Before you can sell it to the American Radiological Society or Amazon or whoever's going to buy it. And right now, the way to get that done typically is you have to send it somewhere else because you're not able to do it. So Glendale's got a great program. So this is an email that we've sent out, which was very, very effective. And I mean, it's not really good. It's one example. One of the things that we've learned is you do have to do A/B testing like Tiger was talking about. You got to throw out 2 or 3 or 4 different versions. And I mentioned that, you know, I was an English major. My, my partner Josh, an English major. We're really good writers. And I think you, in marketing departments, you have to make sure that the people that are creating the content are good writers. And it's kind of like, you've all read that, maybe you haven't read it, uh, that book about telling a story. It's all about a story. And I don't know, there's no real shortcuts to, you know, to that, Mike. Uh, I think video is very important too. We're, one of the things I wanted to try to do today was see what you guys thought about the concept of helping a startup company actually have a marketing team at an affordable price, and what you thought of our initial package. Any feedback on that?

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