What Zipcar Can Teach The BioPharma Industry: 9 Marketing Lessons

After reading a recent blog in Fast Company called The Zipcar Case: Zipping from Very Good to Magnetic, I started to consider, what would it take for BioPharma and Healthcare brands to not just be liked, but to truly be magnetic?  And what lessons, if any, might Zipcar’s success suggest for the BioPhama and Healthcare industry?

While admittedly, Zipcar still has a ways to go financially, most agree that it redefined the Rental Car Market by offering consumers hassle-free “wheels when you want them”…

With success in hand and a recent IPO in April 2011 valuing the company at over $1 billion, Zipcar offers marketing and branding lessons for Pharma that transend the car rental market:

1. Start-ups create new markets, or they don’t survive. Zipcar didn’t chase the existing car rental market at airports with incremental change, they imagined a new market—car rentals by the hour, 5-10 minutes from where you live or work.  Zipcar didn’t depend on market data (it doesn’t exist for a non-existent market) or simply asking consumers what they want, which often biases companies toward incremental improvements of current solutions.  To quote Henry Ford, “If I had asked customers what they wanted, they would have said a faster horse.” [What Zipcar Can Teach The S&P 500 Business Week and HBR May 2011]

2. Zipcar is creating a BEMI—a “big enough market insight.”  A BEMI is an insight that serves as the foundation for the creation of a major new business. To identify a BEMI, companies/brands must answer three questions:

  • Is the insight big enough for your company?  While it is always tempting to think BIG, the authors of Jumping the S-Curve caution that it just has to be big enough and executable.
  • Is the insight valuable enough to customers?  What will customers be willing to pay for the new product or services, and how many customers will exist?
  • Is the insight certain enough?  A genuine BEMI comes from a wise reading of technological, geopolitical, or demographic trends. [Business Week: Finding a Big Enough Market Insight]

3. Success didn’t come initially, not until Zipcar keyed in on business design and redefining its core business issue— density with a new hyper-local strategy.  How to make Zipcars plentiful when Zipcar’s lack of popularity limited the number of cars available? Zipcar needed to build density because they understood that consumers didn’t want to walk more than 5 minutes to a car.   This led to concentrating Zipcar’s marketing efforts in a few carefully selected locations populated by young, tech-savvy, environmentally conscious people.  Once a market achieved critical mass, they expanded to the next community fueled by word of mouth.

4. Zipcar looked for new ways to fuel density, through creative partnering, including ‘unlikely’ partnerships.  Early on, Zipcar partnered with universities to provide cars for students and faculty. [Read Harvard example] Most recently, they’ve announced a partnership with Ford on 250 college campuses—an unlikely partner given that Zipcar touts its car-sharing benefit and not having to own a car. [Ford and Zipcar in Deal on Campuses]

5. Zipcar intimately understands their customer drivers and triggers, and importantly, stays focused on delivering consistent value and customization.  They understand that they need to insure convenience and low cost via proximity with clean, reliable cars and no hassle paperwork.  But they also understand that each neighborhood desires different cars to drive, and they accommodate different tastes.

6. Zipcar focused on technology to help ensure service and convenience. Click here to read about the Zipcar technology.

7. Zipcar focused on segments that competitors overlooked or didn’t consider priority opportunities, such as college campuses and small business.

8. Zipcar didn’t overlook creating and supporting a unique brand personality—“Zipsters” are cool, hip, educated, smart consumers.  Zipcar keeps the brand a little edgy and fun.

9. Zipcar and the market are taking a longer term view to profitability…The IPO is based on future market potential, not quarterly profits…

Implications for how BioPharma and Healthcare brands can improve their magnetism?

1. Incrementalism will no longer suffice in this increasingly payer driven and generics-dominated industry.  We need to start thinking differently; focusing more on creating new markets, identifying BEMI’s and trying new go-to-market strategies that answer patient insights…Supporting customer segments that are often overlooked….and feeling more comfortable that bigger isn’t always better.

2. Might Zipcar’s hyper-local market strategy provide some new thinking for Pharma new product launches? Can coordinated hyper-local efforts help increase traction and density among payers, physicians and patients, especially for smaller brands operating in smaller disease states? Are there some new partnerships to consider?

3.  How can Pharma leverage new technologies to improve customer experiences along every touchpoint? Mobile health applications are just the beginning for what technology can mean for patients and physicians. Zipcar worked hard and long to optimize its RFID chips and GPS technology to support its unique business model.  And the customer benefits of their seemless technology payed off in greater word of mouth and loyalty.

4.  How can Pharma make prevention, staying healthy and treating certain diseases more hip, fun, smart?  Clearly, this is a critical element to creating greater ‘magnetic moments‘!

Do you have other thoughts to add? Do you know of other BioPharma or healthcare companies that are leveraging hyper-local business models?  Leave your comments…

6 thoughts on “What Zipcar Can Teach The BioPharma Industry: 9 Marketing Lessons

    • Thank you! Appreciate the feedback. Zipcar is an interesting business model for sure!

  1. Really great post, Ellen. Love your points on BEMI, you nailed the reasons for Zipcar’s success and your implications are thought provoking.
    – As I start to make the college rounds with my HS daughter, I’ve seen Zipcar on many campuses. Wish that option was available to me when I was in college!

    • Susan,
      Thank you for your comments. I agree, I too wish Zipcar had been around when in our college days.

      Good luck with your daughter! My oldest just started 9th so i’m a few years behind you!

  2. I was a reluctant zipcar customer when they first bought Flexcar, but as a Business Anthropologist I continue to be impressed that they have done a rare job of keeping genuine dual focus on changing customer values and their business model, while leveraging changing technology, all delivered in a great mood.

    Like Zappos, I believe the mood is the breakthrough. It’s hip, fun, smart, as Ellen says, and highly spontaneous. Try calling zipcar or zappos with a problem – you’ll be glad you did. The Pharma company that develops that kind of responsiveness will be a winner.

    • Marsha
      Thank you for your thoughts…

      Spoken like a true biz anthropologist…It’s interesting to think what Pharma co/co.s will invest in creating the mood of fun, spontaneity and learning?

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