If pharmaceutical companies hope to improve their marketing efficiency, they have to change how they approach their customers.
For years, manufacturers have been practicing the "more is better" direct-selling approach to physicians. But research now
shows what common sense has long suggested: More has become too much. Education has given way to inundation, clamoring for
face time with physicians has led to diminishing sales returns, and relationships with major pharma stakeholders have broken
down. Physicians, regulators, consumers, and legislators have come to mistrust manufacturers' motives and integrity. As pharma
asks how its marketing strategies have missed the mark, it may discover answers in reinventing something it once relied upon:
strong relationships with customers.
When sales representatives were universally known as detail men, they enjoyed lengthy, in-depth discussions with physicians.
But, over time, manufacturers pursued a marketing strategy that put quantity of sales calls ahead of quality of interaction—a
course of action that admittedly worked well for years and, some say, still does the job. Regrettably, pharmaceutical companies
came to see sales-force expansion as a competitive necessity, and the marketing arms race took off. As the number of reps
went up, the amount of time an average rep spent with doctors went down—so far down, that tactical scaling has spawned a strategic
crisis. Physicians no longer spend much time with sales reps, nor do they see this as a serious problem.
Physicians' attitudes toward the industry have become alarmingly negative, a fact that cannot be explained away by observing
that reps sometimes seem to outnumber patients in the waiting room. Fewer than 40 percent of responding physicians feel the
pharmaceutical industry is trustworthy, according to a 2004 survey of physicians conducted by Harris Interactive and IMS Health.
About 85 percent believe drugs are inappropriately priced, and not quite half (49 percent) feel the industry devotes adequate
resources to R&D.
Against this unflattering backdrop, doctors have become critical of the quality of information manufacturers provide. Often,
they are inclined to mistrust promotion in general. They grant reps less and less time. Many have closed their doors completely,
turning to alternative forms of promotion, such as e-detailing, peer-to-peer interaction, and the Internet.
To restore the relationship with prescribing physicians—the customers—pharmaceutical companies would do well to emulate the
sort of relationship-marketing concepts, especially campaign and brand management, that have been successful in vertical industries,
such as consumer packaged goods and financial services. Pharmaceutical companies that adopt a customer-centric operating model
can restore faith and trust in the industry, even as they improve sales and marketing strategies, and rejuvenate revenues.
The underlying concepts that will transform pharmaceutical sales and marketing are not new. Pharma can school itself based
on developments in other industries' marketing theory and practice over the past 20 years. The financial services sector,
the consumer packaged-goods (CPG) manufacturers, some computer original-equipment manufacturers (OEMs), and the insurance
industry have all benefited from becoming more customer-oriented. Here's what they did:
1) They became precision marketers instead of mass marketers
These pioneers subscribe to the military premise that the narrower your front line, the deeper you can penetrate into new
territory. In this way, successful and long-standing CPG companies, such as Procter & Gamble, have built strong relationships
with a core set of customers. In order to better partner with them, they have managed a tighter supply chain and used multiple
product-distribution methods. Consider computer OEM Dell Computers. It not only wiped out the middleman by selling direct
to the consumer, but also views competition from an account standpoint, rather than from a product standpoint. This allows
it to think in terms of managing a few islands of profitability, and properly leveraging strategy based on return on investment.
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