Turning the Ins and Outs of Marketing Inside-Out
Nowhere is the effect of Speed of Change more visible than in pharma's sales and marketing model. Despite the (ongoing) downsizing of sales forces, the (slow) shift in marketing budgets to digital channels, and the (fitful) expansion of managed care marketing initiatives, the industry has still not fully awakened to the severity of the threat. What is required now is not simply a pruning—no matter how severe—of the existing organizational structure, nor the transplanting of resources to new soil; what is required is no less than a new model for pharma sales and marketing. A model that turns the threat inside out.
Portalsaurs and Mixed-up Marketing
I'll try to convince you of this with a few illustrations of chronic and debilitating sales and marketing misjudgments in the realms of both professional and consumer marketing.
Over the last 10 years, as we saw the twin tectonic shifts of restricted rep access and the growth of the Internet to near ubiquity, nearly every major pharma company responded in the same way: they built portals for doctors. Pfizer did it, GSK did it, Lilly did it. In fact, it's much quicker to name the top 20 pharma companies that didn't do it because ... there are none!
Betting that doctors would wake up in the morning wanting to go to a pharma HCP portal, the companies could perhaps be initially excused because they lacked digital knowledge and experience. But the proof that doctors did not in fact wake up pining for portals quickly became incontrovertible. According to a well-known Manhattan Research study ("ePharma Physician V9," 2009), the average number of visits by doctors to HCP portals was three to five—per year. And getting even this low level of activity was only accomplished with costly physician recruiting, and without much discernible script left.
Yet one top-five company recently spent $20 million on outside agencies and technology companies to revamp its portal. The digital agency now rebuilding another pharma portalsaur said the budget was justified internally by this reasoning: "If we can get just one more visit per year per doctor, we'll call that success."
So moving from three to four visits a year is viewed as a success. This, while the same Manhattan Research report showed doctors are visiting sites like Medscape 100 times a year, and pharma-branded sites 80 times a year.
On the consumer side, we've seen equally startling reasoning. It's been well established for years that the ROI for television and print campaigns is lower than better-targeted channels such as digital. For TV, ROI is generally less than 2:1, and getting worse, while ROI for typical digital campaigns has been consistently 4:1 and rising over the last several years.
In fact, when I asked one marketing director why his brand continued to spend in equal proportions on TV, print, and digital—despite the fact that their own cross-channel marketing effectiveness study established that ROI was in the double digits for digital, less than two for TV, and negative for print—he responded: "Because we believe in a marketing mix."
So What Gives?
When you see the symptoms of illogical decision-making, you look for other, larger causes that can explain why what appears wrong-headed from a strictly business point of view nevertheless persists. In pharma, there are three prime causes.
1) The disconnect between promotion and sales. The unique, tri-partite nature of the economic transaction in pharma makes the sales process more complex than in any other industry. The 'buyer' (usually an insurance plan) is not the 'customer;' the 'decider' (the doctor) is not the buyer; and the 'consumer' (the patient) is generally neither the 'decider' nor the 'buyer.'
These peculiar dynamics are well understood. But often overlooked is how this dynamic obscures the connection between promotional activities and sales results. Proving that a particular technique contributed significantly to a sale is extraordinarily difficult in pharma, which leads to a lack of marketing accountability. Thus pharma marketers can continue building portals on very sandy foundations.
2) Brands with expiration dates. In what other industry do companies spend hundreds of millions of dollars to create a brand that will disappear pretty much completely in a few years' time? No wonder pharma is overwhelmingly sales-driven rather than marketing-driven. Leadership trusts people who know how to sell to all those Dr. Deciders. And leadership often has less patience for the once-removed nature of marketing campaigns.
3) Regulated speed. The factor everyone cites is the restrictions and cautiousness resulting from FDA regulation. Marketers are sensibly wary of doing anything that might risk approval of an indication or generate a warning letter. This reinforces the tendency to keep the status quo—because it appears safer, because the true risks are not clearly seen.
The Case for Change
There was a time when pharma could afford to be this wasteful and unaware of the effectiveness of good marketing. But with margins eroding, managed care rising, HCP access constrained, and the Speed of Change creating new, economically superior models in industry after industry, pharma needs to reformulate its approach to sales and marketing, and turn the Speed of Change to its advantage. The inventive use of digital technology can become a powerful tool in every way: in personal selling, in non-personal selling, in consumer marketing, and indeed in the activities of marketers themselves.
The rapid move to the iPad and other tablets is a strong step in the right direction. But that step will fall short if it means nothing more than 'detail aids on a cheaper device.' Rather, a truly Speed of Change approach means conceiving of tablets as highly sophisticated tools that create openings for engagement with HCPs. By making creative use of the tablet's distinguishing characteristics (touchscreen, GPS, accelerometer) a product's benefits and differentiation can be more convincingly presented.
At the same time, powerful data can be shared—in two directions. Reps can call up rich, relevant information from sales databases to improve their call planning, and marketing executives can see patterns in the sales data coming back from the field. There is nothing preventing this kind of seamless, sophisticated use of data—except the vision and commitment to do it.
HCPs may be harder to reach, but they still need information from pharma. The Speed of Change trick is to deliver your marketing messages and knowledge to HCPs at the very moment they have interest or questions. This is 'just-in-time' HCP marketing; it represents a significant departure from existing approaches (such as portalsaurs), but it's completely attainable today. In fact, it already has been attained—by Amgen, for its brand Nplate.
Given the preponderance of ROI evidence, every consumer campaign should be digital-centric. The obvious reason is because that's how consumers seek out healthcare information. The less obvious reason is that by using Speed of Change tools, you can build more effective campaigns more quickly. These tools can enable marketers to take the pulse of consumers in real time, leading to faster and more actionable insights. Better insights mean better campaigns—and better results.
All of these changes can be accomplished today; but none will be accomplished unless the role of marketers changes, too. Marketers must become expert at rapid customer knowledge acquisition, absorption, and recalibration, precisely tuning consumer, HCP, and managed care campaigns to the proclivities and preferences of their customers.
Think of it this way: One of the greatest impacts of Speed of Change is the atomization of knowledge; a marketer focused on a very thin slice of knowledge (a particular brand treating a particular condition, most likely) must be better at this than the manager of a competing brand. She has to tune her environment for speed; using technology tools to read her customers more quickly, absorbing past performance data to make decisions based on what is likely to work best, and, once in market, monitoring feedback from the field and from campaigns to see what's working, and adjust accordingly.
The best marketers are already headed in this direction, turning the Speed of Change from threat to weapon. The simple but critical question for the health of the industry as a whole is this: Are you?
Bill Drummy is the CEO of Heartbeat Ideas. He can be reached at email@example.com
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