How does a sponsor encounter business development activities? The most obvious way that this will happen is through your interactions with a CRO business development representative. Even if you are a sponsor scientist and you circumvent the BD staff, you still seek assurances from your CRO scientific counterparts that you will have a successful outsourcing experience. Guess what? Those assurances are among the most subtle and most effective means of business development for a CRO. Have you ever heard CRO scientists or management say that they don't need to do business development because their operations are so successful? If so, you just heard a classic business development line. The "anti-business development" approach leverages the fact that many sponsor representatives do not like BD personnel or their tactics. The CRO staff will openly reject business development activities with phrases like, "That's not what we are about here." Unsuspecting sponsors are now more closely aligned with the CRO staff because they have found a CRO that "understands" its clients. Since most sponsors first interact with BD staff when learning about a CRO, watch for the following BD methodologies.
The Courting Phase
While these methods can be and are used at anytime in a relationship with a sponsor, they are especially useful in attracting new sponsors to CROs. Many of these techniques appeal to that part of our human nature that just wants to have fun. The BD staff wants to associate your positive experiences with their CRO.
"The Wine and Dine" � This is a standard operating procedure in the CRO BD community. For some sponsors, it may afford an opportunity to be entertained in a way that they may not otherwise experience in their professional or personal lives. This activity is usually harmless among experienced sponsors, although some of these events can turn into wild parties. It is amazing how alcohol can break down barriers and cause sponsors to share information that they may not have shared otherwise. This casual setting allows the CRO BD staff to begin to form relationships with sponsors that may be leveraged to the benefit of the CRO in the future. At tradeshows, a long, expensive dinner with a CRO will often prevent a sponsor from mingling with representatives from other CROs. The "wine and dine" approach is especially effective on young, less experienced sponsor representatives.
"I have a couple tickets . . ." � Whether it is football, baseball, basketball, World Cup soccer, or professional golf, you would be amazed how CRO BD staff can acquire tickets to sold-out events. Some sponsor company guidelines restrict their employees from participating in these activities but have you ever noticed how the senior management at sponsor companies seems to be exempt from these rules? Yes, the senior management representatives that scrutinize your CRO interactions with excruciating detail may be the same individuals that you may see staggering to their hotel rooms after a night on the town with their CRO buddies during an industry tradeshow. Furthermore, have you ever noticed that these events magically transform a sponsor's senior management into experts at selecting CROs? For job security reasons, should you choose to challenge one of these "expert" selections, make sure you have very good business reasons.
Location, location, location � Although not used as prominently as in the past, CROs that are located near prime tourist attractions have not hesitated to leverage their location to attract clients. If you think that sponsors would never consider location in deciding what CRO to visit or use, you would be wrong. I know sponsors who ski and justified visits to Reno, NV (just down the road from Lake Tahoe). I know sponsors who have justified CRO visits in Montreal and curiously were able to fit in some Christmas shopping during that time. Using location as a consideration for CRO selection is a common occurrence.
Every business has a marketing story. This story is shared with potential customers where the business describes what they do and how the customer will benefit. Preclinical CROs have stories also. They are either developed by marketing professionals, individuals who think they are marketing professionals, or by long-time CRO veterans. In this latter example, the career experiences of these individuals are often interwoven with the marketing story. If you ever had the chance to meet these CRO veterans, their stories can range from fascinating to somewhat entertaining. Most of the time, a marketing story is a matter-of-fact description of the CRO services and customer benefits. However, sponsors should be alert for some of the following "claims to fame."
"We can do it all" � I attended an outsourcing seminar once where a CRO BD representative was asking sponsors how they would differentiate between CROs if the CROs all told the sponsor that they could "do it all" (i.e., the CRO could fulfill all of the sponsors needs). I raised my hand and informed this individual that if a CRO told me that they could "do it all," I probably would look for another CRO. Yes, there are a lot of multi-service preclinical CROs in the marketplace. Yes, there are some sponsor companies that will place all of the preclinical work with one CRO. However, in my opinion, I do not believe the same degree of quality or expertise exists across all capabilities at multi-service providers. CROs generally are better in some areas than others, but none of them are the industry leader in all categories, especially in the areas of customer service, technical expertise, scientific expertise, and overall operational management. Sponsors generally accept this belief so the gap between the BD claim and reality is actually amplified when sponsors hear otherwise. What I look for in a BD presentation is when the CRO tells me what they can't do or, at least, qualify its degree of experience regarding certain capabilities. Even if this openness causes work to be placed elsewhere, the integrity shown by providing accurate information will register with a sponsor.
The industry is full of stories where sponsors committed work to a CRO based on verbal BD assurances only to find that the technical proficiency was much less than advertised. If you are a sponsor, it is not only important to understand if a CRO has ever conducted a study using a certain technique but you need to determine how many times the CRO has performed that technique. As a sponsor, you also need to be specific with your questions. If you want a CRO to run an infusion study, do you mean continuous infusion? An IV bolus administration? A "slow push" administration over an hour? Buyer beware!
"If I can just get you to visit our facility" � This is a rather fascinating BD approach which actually can be true sometimes. For whatever reason (poor "story," poor delivery of the "story," or poor marketing), some CROs have found that the likelihood of getting business from a sponsor improves significantly if they can get the sponsor to do a site visit. Site visits do afford the opportunity for sponsors to begin to build relationships with CRO staff but there should be a solid business reason for a sponsor to agree to a site visit. Some CROs have been known to say almost anything to entice sponsors to visit their facility. If you want to know my definition of the phrase "sinking feeling," try taking time away from the office to fly hundreds of miles to visit a CRO where you know the moment you enter the facility that there is no way that you would ever place work there. The BD claim didn't match your expectations.
"No one knows preclinical outsourcing better than us" � This equally fascinating BD approach is largely based on a single behavior: arrogance. Sponsors should feel fortunate to do work with this CRO because no other CRO is better! Common lines include, "We have all of the major pharmaceutical clients as customers . . . except you!" and, "Why wouldn't you place your work here?" These CROs would have you believe that it is a privilege to place your work with them. This arrogance may permeate the organization, as noted by a lack of urgency to return phone calls or lack of proactive communication. The ironic part about this BD approach is that you will hear the same claim from multiple CROs. Those CROs that knowingly or unknowingly take this approach should understand that this is a common reason why sponsors take their work elsewhere. If you were dining out and had to choose between two restaurants with equally good food but the staff at one restaurant had a reputation for being "uppity" while the other is known for being friendly and helpful, where would you spend your money? Unfortunately, some CROs have seemingly failed to comprehend this simple premise.
I don't know if some of these following BD tactics are intentional or unintentional but they are used freely. Sponsors need to make good business decisions and not be lured into placing work at a CRO because they were confronted with these very effective BD approaches.
"The guilt trip" � Remember the "wine and dine"? Here is where the payback occurs. Because you went to dinner with the CRO BD representative, unless you state otherwise, these outings can be used to try to leverage work to their CRO. Some approaches include: "I thought you said at dinner that you would place work with us?! That's what I told my boss." Or, "You never said that you were looking at other CROs when we had that nice dinner together! I don't think you have been honest with me."� The possibilities are endless which is why the sponsor needs to be clear with a CRO that any social events are just that and there should be no expectation of business being committed during these times.
"The time trap" � I have always encouraged sponsors to allow sufficient time to be successful at preclinical outsourcing. The "time trap" happens when a sponsor is rushing to meet a study start date and selects a CRO solely on the basis of BD feedback. When the opportunity finally does arise to understand the CRO capabilities, the sponsor realizes that the BD information may not have been accurate or contain sufficient detail. The sponsor is now faced with either finding another CRO, which will delay the project timeline, or work through the lack of technical/scientific experience with the existing CRO at additional time, money and risk. Most sponsor representatives choose the latter rather than having to admit to their management that they made an improper CRO selection. Don't get me wrong: this is solely the sponsor's responsibility but don't think that some CROs won't hesitate to leverage these situations to their benefit.
"The fear of failure" � This approach is born out of the "no one knows preclinical outsourcing better than us" approach. This approach plays on the fear every preclinical sponsor lives with: that something will go wrong during their outsourcing experience. The CRO staff tries to convince the sponsor that the best chance for success is to place the work at their CRO. The antidote against this approach is to consider who is delivering the message. If it is delivered by the BD staff, you have to consider that (a) it is unlikely that they have ever conducted a study, so they don't know what they are talking about and (b) do you really want to place work at a place that plays on your emotions? During my time as a Pharma sponsor, we had a CRO BD person challenge us to find a better place to place our studies . . . so we did! The strange thing about that interaction is that the CRO could have been awarded a majority of our work at that time but this individual's style (or lack thereof) prompted us to seek out other CROs that we wouldn't have approached otherwise.
I view BD personnel and the BD story as a reflection of the CRO. If I don't like some of what I am seeing or hearing, that immediately leaves me with a negative impression of that CRO until I am convinced otherwise. Keep in mind, a CRO can have wonderful scientists and operations and a poor BD approach. In this situation, I try to determine if I can live with a "bad" BD component if the remainder of the operation is acceptable. Why is this consideration important? Here are some of my warning signs:
"Trash talk" � When CRO BD staff speak poorly about other CROs, it makes me wonder why they are trying to make their company look good at the expense of others? Are they trying to hide something in their own organization? An extreme case of trash talk is when BD staff will speak disparagingly about other clients. Yes, some sponsors can be a pain in the butt for a CRO and it may even be fun to hear CRO staff complain about them. However, if they speak this way about other clients, what will they be saying about you?
"That's confidential, but�" � Confidentiality is a big deal for sponsors. They want to know what other sponsors are doing but they don't want anyone to know about their activities. If a CRO breaks confidentiality about another client, it is likely that they will eventually share information about you. It works like this. A sponsor visiting a CRO will want to know what other Pharma companies place work there as they may be comforted other companies are using the CRO. The CRO will decline to identify their clients but if they detect that it will help land your business, they may say, "I can't tell you what clients place work here but I will tell you that we work with the company that has the best selling cholesterol medication on the market." That is a true story. I don't know why CROs do this because the sponsor community often freely compares notes on CROs anyway.
"Tell them what they want to hear" � Earlier in this article, I indicated that alcohol can get sponsors to reveal all kinds of information. Well, it works the other way as well. At one outing with some CRO colleagues, one individual asked me if I knew the secret to getting a sponsor to place work at a CRO. I shook my head and the person said, "Tell them what they want to hear." This person was serious. While I don't believe this is typical of the CRO BD community, it is something that sponsors should consider.
"Out of alignment" � In this situation, the sponsor may hear one version of the CRO's story from their BD contact and another version from the operations side of the business. Sponsors need to be very aware of this. If these stories are out of alignment, something is wrong somewhere. Ultimately, the operations may be just fine with no issues but then you need to ask if you want to place business with a company where on component seemingly doesn't know what the other component is doing.
"Here today, gone tomorrow" � If you are a sponsor that is looking evaluating a CRO for the first time, you'll note that some CROs are very effective in rallying the entire organization to meet you and anticipate your needs. To a sponsor, this activity appeals to your need to feel in control and allows you to envision a successful outsourcing experience. What you really need to determine is, will this "special attention" continue after you commit your work to the CRO? Some CROs have the reputation for being great at "getting clients in the door," but then the level of customer service drops off considerably after the work has been committed. This often leaves sponsors feeling frustrated and is another common reason while sponsors will take their work elsewhere. If these sponsors look deeper they will find that this situation is due to misalignment as well. The customer care afforded by the BD staff has not carried over into the CRO operations.
"Show me the money" � Do you think that the CRO BD staff are some of the friendliest people that you have ever known? They remember your birthday, your pet's name, and a lot more information that you blurted out during a "wine & dine." While some of these individuals genuinely do care for sponsors by remembering all of these tidbits, you should be aware that some CROs retain sponsor information in company databases that are available to those within the CRO with the appropriate access. Furthermore, these databases may contain dates of meetings and phone calls with the BD person that describes the content of your conversations. I'm sure that most BD individuals are honest and upstanding who are just trying to make a living like the rest of us. Just remember, preclinical outsourcing is a business and many CRO BD individuals get paid by commission.
In this article, we examined some of the ways that preclinical CROs conduct their business development activities. I helped to develop a business development story when I worked at a preclinical CRO. Essentially, the business development goal is to connect with potential clients and to accentuate the positives while downplaying the negatives. There are many fine and honest people that work in preclinical CRO business development. Like any industry, it only takes a few individuals to operate outside of accepted good business practices to cause the marketplace to be cautious toward those in this line of work. Ironically, while some at CROs believe that more is better when it comes to business development, they fail to understand that those in the sponsor companies that ultimately make the outsourcing decisions often have little interest in business development activities or personnel. Sponsors want to deal with CRO counterparts who are accessible and will provide answers in a timely manner. As long as they can accomplish this, it makes little difference whether the CRO representative works over in business development or in the CRO's actual operations.
Remember, preclinical outsourcing is a relationship-based business. All of the clever business development ideas, acquisitions, or names of prominent industry veterans are useless if the CRO can't establish a relationship with sponsors. What sponsors want in a CRO is for someone to look them in the eye, tell them what they can or can't do, and then stand by their word. For the sponsors out there, you also have a responsibility in this business relationship. Especially now that you've read this article, you can no longer claim that you were misled by a CRO business development group. Do your homework and accept responsibility for own outsourcing experience!