Return on Opportunity
Is convention marketing the opportunity that will make up for the decline in office time? A few years ago, the Healthcare
Convention Exhibitors Association (HCEA) conducted a before-and-after survey of physicians who attended a large medical meeting.
The research produced some striking findings:
Consider as well that the cost of detailing a healthcare professional at a convention is thirty percent less than the cost of a field sales call; convention marketing is a serious contender for the optimal selling opportunity.
Nonetheless, conventions don't rank high on the list of things marketers pay attention to. That's unfortunate. Maybe the situation could be helped if product and brand managers adopted a new way of thinking—both qualitatively and quantitatively—about the benefits that conventions can provide.
A Changing Environment
The selling environment is in a state of flux. While it used to be a given that reps would be seen in the doctors' offices, that simply is no longer a valid assumption. Managed care has redefined the nature of the time the doctor spends in the office. Multiple surveys, although coming up with slight variations in numbers, indicate that doctors do not spend much time with reps who visit their offices. On average, a doctor will see approximately 15 reps a month, spending one to seven minutes with each.
Practices that once gave reps time with doctors outside the office—golf, sporting events, and the like—have disappeared with the dawn of the PhRMA guidelines and the OIG guidance.
Journal advertising has proven to be effective, but unlike the office visit, there is no face-to-face interaction.
Promotion aimed at patients has helped fill the gap. Consumers have been responsive to DTC advertising. And although doctors
are not big fans of self-diagnosis on the part of patients, they tend to give their patients the products they ask for by
name (if it's appropriate). But there is reason to wonder how long DTC will be effective. FDA is looking harder at what is
being said and how it's being presented to the consumer. Surveys have shown that:
If, in fact, DTC advertising expenditures hover in the $3 billion range, as DDMAC claims, that is considerable money spent on an effort that is at best questionable. There is also the consideration that DTC practices have not always contributed to favorable public relations for pharma. Some pharma companies are voluntarily suspending DTC advertising in the wake of intensified political pressures. DTC is an easy target for politicians when they are not focusing on practices that target healthcare professionals.
What's the Return?
Product and brand managers know that the measurement imperative has never been stronger. With the impact of Sarbanes-Oxley, not only will budgets receive intense scrutiny, but the processes used to find meaningful, relevant methods to determine the impact of marketing initiatives are scrutinized as well. The demand for accountability across all processes is intensifying. Debate ensues as return on investment (ROI) and return on objectives (ROO) proponents both declare themselves winners.
But there is an alternative approach, one that arose out of the technology industry: return on opportunity. Where ROI focuses on costs, return on opportunity focuses on the ability of a new action to grow the top line, to alter the nature of the business or to achieve other goals. As the pharma marketplace rapidly evolves in the next few years, return on opportunity offers a meaningful platform for marketing resource allocation.
In planning for growth, the numbers are not always the best initial indicators. Before the numbers come into play, analysis of marketing opportunities can be an interesting and revealing exercise. Stepping back from the traditional paradigms, brand managers might want to review their investments in marketing initiatives the way any investor would review a portfolio. If the portfolio of investments is solid, there is diversification and synergies in the planned growth. If the portfolio is vulnerable, there is too much risk in a particular area.
What's wrong with ROI? Consider the inherent weakness of the traditional model. To determine a simple return on investment, you take Gains (G) minus Investment Costs (IC) and divide by Investment Costs. The problem with this in pharma marketing is that a specific G is not easily measured for any single initiative or program. The G can be total sales, growth in market share or individual prescribing behavior. Any of these can be linked to total marketing impact or multiple touch points. However, it is very difficult to tie gains to any single initiative. Return on opportunity compares the strengths and weaknesses of different initiatives and yields data that is derived not only from investments but from observable, favorable situations.
Measuring the return on opportunity is not quantitative but comparative. However, numbers play a key role, and the numbers generated are used to compare one opportunity with other initiatives designed to achieve similar goals.
Before any comparative measurement can be made, groundwork has to be laid:
Define the goal/objective Before measuring any kind of return, it is necessary to know what is being measured and why. Measurement could include prescription volume change, shift in market share, or physician preferences. All of these are measurable.
Define the best methods to achieve the goal or objective.
Know the cost of other methods.
To measure the return on opportunity for conventions, first obtain preliminary data. The sales organization should be able to supply company-specific numbers—the average cost per contact, the detailing order, and the average length of the contact. This data should be compared with data from outside agencies, such as Health Marketing Systems, and various convention services, such as the Center for Exhibition Industry Research (CEIR), HCEA, and similar agencies.
Once the data is obtained, avenues used to achieve the convention opportunity need to be reviewed—and the cost of each of these options has to be compared, first with one another, and then with convention spending. This comparison will indicate the relative cost associated with achieving goals.
Reviewing the total cost of attending the convention and dividing that by the number of targeted details achieved will yield cost per contact. Compare this to what the same opportunity would cost you in the field, and you will almost always be surprised by the total savings of the convention over the field detail. This certainly does not eliminate the need for a sales force, but it shows the effectiveness of a well-planned and -executed convention program, and helps with allocation of resources.
In measuring and analyzing data, it is important to remember some basic tips:
Understand the objectives In the case of conventions, the objective is for doctors and reps to have face-to-face contact.
Know the key message you wish to be communicated when the contact takes place. It should be the same message that the reps would use in office detail situations.
Establish how the measurement will take place. With follow-up calls? Post-show surveys? Make sure it's clear.
Understand the cost of achieving this objective through alternative means. The cost associated with the office visit needs to be determined—this is a number the sales department should have readily available.
Establish non-quantitative criteria Conventions offer multiple marketing opportunities: sponsorships, symposia, and the like. The cumulative impact of these opportunities must be taken into account and can be compared with non-quantitative criteria in the office environment—limited time, the risk of not seeing the healthcare professional, and other variables.
If the objective is to have face-to-face contact with a target market, it is already clear that conventions accomplish this at a lower cost than office calls.
But there are more opportunities inherent in convention marketing. Conventions literally bring the customer to the brand, to the marketer. The customer comes for no other reason than to learn what is new and how it can provide solutions to challenges.
Conventions provide a meaningful encounter with the brand. They synergize all communications vehicles and create a total impact on the market: advertising, Web presence, programs, detailing, and non-prescription sampling. Not only do they encompass a learning/selling atmosphere, but they have the potential to put your best reps in front of your target audience. The atmosphere is bolstered by opportunities for healthcare professionals to interact with medical liaison personnel outside of the promotional area. A strategically focused convention program takes advantage of this rare opportunity for face-to-face contact and marshals brand resources to further your goals and objectives.
Ray Altieri is vice president and general manager of Poretta & Orr. He can be reached at firstname.lastname@example.org
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