7 Marketing Lessons from Theranos"s Struggle

CNBC - Bill George: Theranos under fire

It wasnt that long ago that Theranos was one of the hottest companies in the medical technology field and was gaining a lot of attention as a Silicon Valley startup to watch out for.

Then The Wall Street Journal came at them hard by questioning the science of the company and its claims to be able to run blood tests on mere drops of blood instead of vials.

Months later, the company is facing criminal investigations, and the FDA may ban founder Elizabeth Holmes from the industry. Its been a whirlwind of surprise and its also a stark reminder of the perils of investing in Silicon Valley.

There are also lessons that brands can take away from the struggles the company is having and how theyve responded to the media blowout.

1. Put the Right People Out in Front

Throughout the entire issue, Holmes has been front and center to tackle the inquiries and interviews and hasnt been afraid to be in the crosshairs. This might be considered a sign of strength where PR is concerned, but thats not always the right choice.

Holmes should have done more. And by that I dont mean she should have been more visible she should have been less so.

Instead of taking the hits and being out in front, she should have called on someone with the medical expertise to handle the PR inquiries and be the face of the crisis. Someone who could break it down clearly for the public. Thats because, in this case, the value of the company lies in the science behind what they do.

When that one thing the core concept of the company is attacked, then you have to protect it. Without the right person, such as a medical ally, that protection is left up to someone Holmes who lacks any kind of medical degree.

The company failed to defend the science. And thats a significant PR slip-up.

2. Make Stuff That Works

Its pretty clear that Theranos let the marketing get out way ahead of the product itself.

According to the WSJ article, Theranos wasnt necessarily using the product it touted and instead was allegedly using existing technology for tests.

It seems like the company didnt spend an adequate amount of time testing for product-market fit, along with making sure that the product was 100% viable, before pushing forward with marketing.

Before you start marketing anything be it a product or service make sure your stuff works.

3. Be Transparent

One of the biggest issues facing Theranos at this point is its lack of transparency. While the company continues to insist on the viability of its product citing its own studies it refuses to release any big data.

Researchers from Icahn School of Medicine at Mount Sinai have done their own tests, but Theranos is disputing the accuracy of those tests. At the same time, Theranos continues to refuse to provide its own data.

This is a prime example of why transparency is important. Your audience and customers expect it. If they ever feel like youre withholding information, then you lose trust and that is difficult to regain once its gone.

4. Keep Your Focus

Even in the middle of a crisis, you still have a business to run. At one point, Holmes was unable to be reached because she was in all-day meetings with the Harvard Medical School Board of Fellows.

In addition to that, she has continually stood out at speaking events, television interviews, investigative interviews, and more.

You absolutely need to address tough questions from reporters, employees, customers, and even regulators. But at some point, once the troops have been rallied, you need to focus and get back to work.

Its extremely difficult to pivot in a crisis and take actionable steps to improve or change when the majority of your time is spent on publicity and PR. You have people (hopefully) to handle that for you. If not, hire the right person or agency that can let you get back to work.

5. Bad Hacks Will Catch Up with You

Im not claiming to be an expert on Theranos or even that specific industry.

With that said, it stands to reason that if youre running tests on machines that arent the proprietary machines youve been claiming to use, then youre running a bad hack.

Growth hacking is one thing, but bad hacks in business (no matter how effective at the time) catch up with you. Youre just cutting corners.

Im sure there are parts of older social platforms like Facebook that still have poorly-cobbled PHP from 2008. The same could be said for a big platform like SalesForce. Not updating those bad hacks, or corner cutting, has them leaning on bad practices.

Whether its your product, your process, or your marketing deployment, those hacks are going to catch up with you. If you cant operate without them, youre in trouble.

6. Dont Overhype and Oversell

You could point back to the old adage of If its too good to be true with Theranos. The company spent a great deal of time on hype that caught the attention of a lot of people, but it failed to back up its marketing and actually deliver.

In fact, a number of doctors who reviewed the data for Forbes unanimously said that the world isnt ready for this kind of change until Theranos makes more of its own data public.

Id be very reluctant to use Theranos based on this study, said Edward R. Ashwood, Professor and Vice Chair for Clinical Pathology at the University of Colorado in Denver.

When youre creating a marketing strategy, dont stretch the truth. Focus on help over hype. Focus on the real value, and the real benefits. Anything beyond that will cost you dearly if youre unable to back it up.

7. Have a Social Strategy for Managing a Crisis

As the issue unfolds, Theranoss Facebook page remains devoid of engagement. The company continues to post content, mainly centered on testimonials from customers and employees.

What its not doing is responding to the barrage of comments and questions from visitors.

Complete and utter silence disengages you from your audience. It erodes trust and makes people feel like youre hiding something. Take the time, before a crisis occurs, to create a social media strategy that clearly defines how these types of incidents are handled, and who will be responsible for owning them.

Has your company learned any valuable lessons as a result of the PR fallout around Theranos? Let me know your thoughts in the comments below.

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Source: http://tech.co/marketing-lessons-theranos-2016-05