The two following examples from our BWP consulting practice were formulated for our new book, “Game Strategies in Business: Changing the Rules of Competition” (Campus 2008). They illustrate what it means to effect a change in behaviour in the respective target groups by using strategic creativity in difficult competitive conditions, thus setting a course for sustained growth.
How to conquer ‘impossible’ market potential
A few years ago, we received a call from the pharmaceutical firm Aventis (today known as Sanofi-Aventis). They were searching for a sustainable growth strategy for an insulin product called Lantus. The sales of that product had peaked two years after launch – and now the marketing team was setting out to capture a business potential which industry insiders called ‘unconquerable’ in the truest sense of the word…
Facing the insurmountable ‘Insulin Barrier’
In the market for diabetes medication (more precisely for Type-2 diabetics who are still able to produce some of their own insulin) a distinction is made between ‘tablet patients’ in the early stages of the illness, and more advanced ‘insulin patients’ who need to take daily injections of their medicine. The sector talks about a kind of natural ‘diabetic career’. You start with one tablet a day, then two, then three…and at some point there is the major and irrevocable ‘camp transition’: After several years the typical patient finally moves forever from the ‘tablet camp’ to the ‘insulin camp’. And therein lies the problem: The tablet patients experience massive emotional resistance during the transition to the negatively charged insulin camp, even though they accept intellectually the need from a medical perspective. This so-called ‘Insulin Barrier’ creates huge headaches for insulin manufacturers. Patients behave as if on the other side of that barrier, they were entering a prison from which there was no release. A life sentence in the ‘insulin camp’—it is not much of an exaggeration to say this is how many patients feel.
The goal: unlocking a major but ‘impossible’ market potential
For insulin manufacturers like Aventis there is an extraordinarily attractive market and growth opportunity: A million tablet patients in Germany alone receive insufficient therapy, and really should have made the transition to insulin injections a long time ago—and for the rest of their lives. From a medical standpoint, every attempt to move insufficiently medicated tablet patients over to insulin was not only clinically legitimate, but urgently needed, because otherwise more serious consequences threatened, among them dialysis, blindness and amputation of limbs.
Now the strategic thinking task: How can you convince a million under-medicated patients to move to the ‘correct’ insulin camp? How can you help them to break through this massive invisible barrier? And finally, how can the insulin preparation Lantus capture a large share of this ‘impossible’ potential?
Getting a deeper understanding of the ‘Insulin Barrier’
Let’s take a deeper look at the issue: What is the ‘Insulin Barrier’ ultimately about? What is it really that makes the ‘insulin camp’ so scary? There is a lot more to it than just the fear patients have about giving themselves shots. Today’s modern ‘pens’ take most of the pain and complexity out of injections. What the patient really fears is a radical change in lifestyle—and one that he will have to live with the rest of his days. He experiences the move from the tablet camp to the insulin camp as an irrevocable change in personal status, a final, definitive alteration in his own self image. The thinking of the typical tablet patient runs something like this: ‘When I’m finally over there, in the insulin camp, my life will change radically and forever. I’ve got to give myself insulin injections up to four times a day. I’ve got to plan all of those injections according to meal times, which means I’ve got to plan my meal times down to the half-hour exactly, and figure out in advance how much I can eat. I’ve got to take blood sugar measurements every day and count every slice of bread I eat. There’s no getting around it: my whole future routine will revolve around my illness and the treatment. From the day I start those insulin injections, my whole life hangs from the end of the needle.’
It’s natural to recognize and respect major status changes in life, especially the positive ones: Think about your bachelor’s party before getting married. Or those herds of chain-smoking men walking around in circles in the waiting room, getting ready to evolve from mere ‘husbands’ into ‘fathers’ with everything that brings with it. Even in these generally positive instances the ‘status shift’ is charged with fear and anxiety. But in the case of diabetes we are dealing with a negative status shift: from ‘normal person’ to an ‘insulin patient’ forever dependent on that needle.
The classic marketing approach turns out to be a dead end
Aventis was not the only company looking for a solution: so was the entire market of insulin manufacturers. How do we surmount this barrier? How can we succeed in converting insufficiently medicated tablet patients to insulin?
The market had developed and implicitly agreed on a very simple ‘model’ of the market landscape which guided the thinking of the pharmaceutical managers: They imagined two camps—a tablet camp and an insulin camp—separated by an emotional insulin barrier that they had to overcome. This view became part of the structure of the market, and it doesn’t require much effort to see how it could be interpreted to be part of the fixed general conditions.
With this two-camp model of the market in mind, there was an obvious—apparently!—solution that the industry discovered in fairly short order. It consisted of creating a new transitional therapy: designed to be an entry-level insulin therapy. Sounds logical enough: If making a ‘hard’ switch to insulin doesn’t work, then the entry-level therapy builds a bridge the patients can more easily cross over to insulin. Unfortunately, if this entry-level therapy was such an obvious correct solution, how come every attempt to use it failed? What went wrong?
One thing is fairly clear about the entry-level insulin position: The entry into the insulin market is logically on the other side of the barrier, where the rest of the market is located. As a result, the patient views this kind of transitional therapy as the first step into the negatively-charged insulin camp, which represents a major status change in life, and a negative self perception. He has no choice but to internalize this status change completely and emotionally before he will accept an entry-level insulin therapy.
This explains why an entry-level insulin therapy has no hope of solving the problem. It may promise a soft landing after the jump over the barrier, but the barrier still exists and still has to be surmounted.
A strategic sleight of hand
When dealing with this type of subtle mind game, we like to convene a ‘Game Changer’s Workshop’. That may sound a bit pompous but it serves the purpose of reminding the participants of one iron rule: ‘No thought is taboo to the Game Changer. He elevates himself to the second level of the Game in order to restructure it to his purposes.’ This simple thought process usually is sufficient to free-up everyone’s thinking.
On this basis we proposed the following line of thought to the Lantus team:
Transitional therapy is a pretty good idea in principle. But who says it has to be on the other side of the barrier, in the negative camp? Why do we have to define it as an entry-level insulin therapy? Wouldn’t it be far better to conceive of a transitional therapy as the last stage of tablet therapy—which would keep it on this side of the barrier, still in the positive tablet camp?
What we were doing, in the truest sense of the word, was nothing less than intervening in the design of the market, integrating the new class of therapy not behind the wall, but in front of it.
This seemed like a pretty clever and provocative idea: A final stage of tablet therapy, which just happens to include the first daily insulin injection. It might seem a bit contradictory at first. But on closer examination everything becomes clear: It isn’t the injections that constitute the shift in camp, but rather the expected life change resulting from them. If you can avoid the latter, then the patient is logically and emotionally able to remain in the positive tablet camp.
In order for the new class of therapy to be a success there was one inviolable rule: The final stage of the tablet therapy must be designed in a manner that does not require a dramatic change in quality of life. The Lantus product itself was ideal for this purpose, thanks to its regular and long-lasting effectiveness profile. In this new stage of tablet therapy, everything stays the same (well, almost everything!): No complicated planning of mealtimes. In general the injection didn’t have to be timed with a meal, and just one lasted the entire day. The new class of therapy had to be designed so that the patient could keep his personal status and self-perception (‘I am still a tablet patient!’). The early stage diabetic receives first one tablet, then two, then three…and from there it is just one small step to a complete tablet therapy, which happens to include a single daily injection. The patient stays happily in the tablet camp, and simply changes to a new sub-segment. Tablets continue to be the mainstay of the therapy, just as they were before.
A nice kind of Trojan Horse
At this point, some of you may be wrinkling your brows and asking: ‘The patient still has to take an injection, even if it is only one a day. How can this mean he is still in the tablet camp? Doesn’t that automatically make him an insulin patient?’
Here’s where you have to pay very close attention, because a single injection every day does not imply a status change or a new self-image. Someone who eats vegetables once a day is not in the ‘camp’ of vegetarians. Someone who drinks one glass of wine a day doesn’t consider himself in the ‘camp’ of alcoholics. And a diabetic whose basic medication consists of tablets, but who also receives one injection a day does not consider himself to be a member of the camp of ‘insulin patients’. He continues to be a ‘member’ of the tablet camp, because he continues to have a relatively uncomplicated life which insulin patients no longer enjoy.
It’s not much of an exaggeration to say: We transferred an insulin product to the positively charged tablet camp. Dressed in the clothes of tablet therapy, insulin is no longer terrifying. That’s why we compare this strategy to a ‘Trojan Horse’. A strategic sleight of hand, legitimated by the fact that the ‘camp shift’ results from a medical necessity.
Launch and Success
After final testing and confirmation by the company’s team of medical experts, Lantus was launched in the market as ‘Basal-supported Oral Therapy’ or BOT for short.
The name itself indicates that we are talking about an oral therapy, which means a tablet therapy. Basal-supported means simply a harmless, tiny injection of basal insulin, which only needed to be administered once a day, thereby playing a supporting role to the tablets.
The BOT idea caught on immediately with the entire scientific community. The BOT principle was the subject of reams of medical literature, and today is on the curriculum at all universities. Meanwhile, Lantus has gone on to become the leading insulin in Europe. It is the first product that broke through the billion-Euro annual turnover threshold.
A decisive factor in the success of BOT—as the final stage of tablet therapy—is that it opened the doors to a new, nearly exclusive distribution channel, namely general practitioners and family physicians. Because it involves an extension of tablet therapy, general practitioners are the first to presume that they are responsible for BOT. Aventis was able to free itself of the constraints of a limited circle of 1,200 diabetes specialists, and enlist the support of a large part of the 45,000-strong force of general practitioners. In this new market, Lantus was a pioneer, a first mover, and therefore able to stake out its territory months before the competition could respond.
What we can learn from this case history
Many managers have difficulty accepting the notion that an individual company can intervene in the rules and laws of the pharma market. The ‘Lantus’ example shows that this is in fact entirely possible. The new transitional therapy unleashed a new dynamic that affected millions of undermedicated patients. They opened the door to a new distribution channel, namely general practitioners. So now the question is, how could Aventis achieve this? How can an individual firm use such a powerful lever in the market and bring forth a totally new dynamic force?
To understand this, we must remember that at one point in time, the new therapy ‘B.O.T.’ was nothing more than an idea—in fact an idea that did not involve any kind of a new product, but rather those that had been on the market for many years.
Our story is about Zeiss, a respected German optics firm with a 150-year tradition of quality and innovation. The first microscope was produced here around 1850, and still today the company produces outstanding specialty microscopes for modern microsurgery. At one point Zeiss developed the most sophisticated telescopes in the world, and today produces telelenses for the Mars expeditions. Zeiss has always produced lenses for cinema cameras, and today sends its finest lenses to Hollywood. They are true premium players in the best sense of the word.
Ironically, in the down-to-earth and far less technologically complex business of eyeglasses Zeiss had never been able to truly exploit and capitalize on their competence edge. As can happen in many markets today, a downward spiral in prices brought with it merciless consequences. The winners were low-cost producers, including imports from Asia with unbeatable prices and well-accepted quality. National and international ‘mass-market’ brands were putting pressure on Zeiss’s eyeglass business.
The Problem: A Market that doesn’t appreciate Top Quality!
The Management team at Zeiss invited us to work with them to find a solution to this difficult market situation. We experienced first hand the degree to which the medium sized Zeiss organization is totally focused on technological top quality. Not only for microsurgery, space expeditions or Hollywood. Also for eyeglasses, Zeiss is firmly positioned as a premium producer.
Inspired by a century and a half of experience with the art of seeing, the Zeiss development labs came up with innovations straight out of a James Bond thriller. A typical example: Zeiss engineers developed a video tower called ‘Video Infral’ that made it possible for opticians to film the ‘vision process’ of the customer’s eye and to measure it precisely under different conditions. The measures were translated into precise mathematical algorithms that were beamed over the Internet to Zeiss production facilities where the glass lenses were ground. The grinding and focusing of eyeglasses involves a precision of hundredths of a millimeter. The slightest deviation can produce significant strain on the eye. With its innovative tower to measure vision, Zeiss enjoyed an undeniable technological advantage. The dilemma was, to put it crudely, nobody cared much. The optician’s business is primarily about selling chic designer branded frames for glasses that offer the customer a sense of well-being and permitting them to express their personalities. At such an emotional moment, who gets excited about the technical advantages of superlative lenses? The magic Video Infral ended up as a tough and tedious sideline business – with little appreciation from opticians and their customers.
The Strategic Analysis
While Zeiss was occupied at the highest technological level with the measurement of sight, the market was ticking away at a much more modest level. In particular, customers paid attention to three purchase decision factors: Eyeglasses must be above all (1) anti-reflective coated, (2) scratch resistant and (3) super thin (=super light). Nothing more.
These are the fundamental quality standards that lead all opticians—and which guide the overwhelming majority of their customers.
We met with Zeiss management, and described the problem. Our analysis can be summarized as follows:
The existing quality measures in the market for eye glasses were rather unsophisticated, because they were reduced to physical characteristics of the glass material.
Our conclusion: In order for Zeiss to stand out from the other market participants as a premium producer, the company must establish a new and intuitively aspirational premium performance criterion.
The Game Changer’s way of thinking
How’s this for a striking contradiction? Eyeglasses have to do with the ‘Art of Seeing’. They support a highly sophisticated and complex physiological process. But on the contrary, the market game revolves around the common criterion of glass processing, for which low-cost producers are trusted just as much as Zeiss. A new kind of ‘Quality’ standard had to be established, and on a far-higher level. There is a possible connection in the fact that perfect vision is the result of the interplay between the defective eye and the corrective lens. Eye and glass—the living and the artificial must cooperate, interact and harmonize, perfectly.
It is on this higher level that the new premium criterion must be defined. The essence of the new premium criterion can be captured in the intriguing Game Changing Idea:
‘Relaxed Vision’ is a new measure of performance for eye glasses – defining for the first time the opposite extreme to unnatural, strained, stressed-out vision that millions of consumers experience and suffer from day by day (especially the more mature consumers using reading glasses).
Let’s remember that the eye is a ‘muscle’ – and one that’s working 16 hours a day or more: Looking at computer screens. Reading documents, files, books and magazines. Watching TV. Driving the car at night. Over the years, that muscle loses some of its power and specifically some of its ability to adapt as quickly and efficiently. You start wearing glasses which help the eye to work as perfectly as ever.
Now, who would you trust to deliver relief from that kind of eye fatigue? What about any one of these mass-market manufacturers that know everything about glass processing? Or wouldn’t it be a lot easier to trust a premium producer like Zeiss – one who has researched the art of natural and relaxed vision for over 150 years?
The ‘Relaxed Vision’ Tower unfolds its Magic
By establishing the new premium criterion, the Video Tower suddenly takes the spotlight in the entire sales approach toward opticians. The name of the futuristic column was changed from ‘Video Infral’ to ‘Relaxed Vision Tower’ –and became a central part of the Zeiss proposition.
Now imagine, as a customer, you walk into an optician’s shop, the optician points to this hightech column and offers you to have your own personal vision process filmed, measured – and the conditions of your ‘living’ eyes ground into your new eye glasses. Who wouldn’t be tempted to experience that relieving comfort of ‘Relaxed Vision’?
This is introducing a thoroughly fascinating and emotional event at the point-of-sale of Zeiss partner opticians. Customers who had always limited their decision-making to picking the right ‘branded’ frames, suddenly get highly emotionally involved with choosing the right ‘brand’ of glasses, too. And all those millions of customers that actually suffer from eye fatigue should naturally be inclined to find out how ‘Relaxed Vision’ can help them, too.
How did the Competitive Game change?
With the introduction of the ‘Relaxed Vision’ criterion Zeiss (as well as their partner opticians) was able to stand out from the mass market, and with its highly refined lenses, force aggressive price suppliers into a second league. ‘Relaxed Vision’ had the potential to rise above the mass of competitors and establish itself on a higher level with new freedom for growth and value creation.
The Relaxed Vision Tower, by measuring sight, provided substance and credibility to the new strategy. In a sense, it served as the ‘material’ evidence for the ‘immaterial’ Zeiss competence, making 150 years of research experience in the ‘art of vision’ suddenly visible and tangible. And on top, the Tower created an exciting and involving customer experience at the point of sale, one with the power to leave the customer deeply impressed and catapult the Zeiss back into a class of its own.
For so many years before, the sales talk had revolved around the rather technical question: ‘So you want anti-reflective glasses, anti-scratch and super-thin? – Do you prefer the economic version from our standard “partner” manufacturer or would you like the premium version from Zeiss?’ – It’s easy to predict who would be the logical loser in that competition.
Now, imagine how the Competitive Game at the point of sale gets an entirely new twist when the optician introduces that hightech ‘Relaxed Vision’ to his customer, redefining his options much like this:
‘So, you still have trouble with strained and tired eyes. Now, we can film and measure your individual “vision process” and get you some tailor-made “Relaxed Vision” glasses-- or you could choose just to go ahead with “standard” eyeglasses…’
Quite obviously, the Game is changing here. Instead of revolving around technical ‘glass’ characeristics, we are now dealing with a new and highly aspirational Gold Standard. Everything is in place for Zeiss to de-class their mass-market competitors. The Game is about to be taken to a higher level of sophistication – and Zeiss is in a perfect position to become the ‘logical’ winner.
Importantly, ‘Relaxed Vision’ turned out to be much more than a catchy buzzword for brand communication. It represented a value shift: both in the market and in the company itself. The new ‘Measure of all Things’ had to penetrate the entire organization, and plant itself firmly in the consciousness of every employee. In the ‘Optical’ business group, a complete reorganization of the product line up and price strategy was necessary. There are different levels of ‘Relaxed Vision’ in different price categories and for different wallets. Equally important was the ‘staging’ of the new dimension of sight in the opticians’ stores. An optician who serves his customers on this high-tech level can easily distinguish himself from his competitor around the corner, who in most cases concentrates on offering an extensive assortment of fashionable eyeglass frames. This turned out to be a highly fascinating proposition to recruit opticians nationwide as dedicated Zeiss partners In a sense, Zeiss sales partners were upgraded to ‘HighTech’ opticians, easily reconizable through the illuminated frontdoor advertising flashing ‘Zeiss Relaxed Vision Center’.
Zeiss-Partners receive a ‘Relaxed Vision’ tower at no charge, and in return designate Zeiss their number one supplier for several years. For Zeiss this became a powerful lever for growth.
You will find further case studies in our current book “The Impossible Advantage”