Missing the Mark(et) - Pharmaceutical Executive

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Missing the Mark(et)
Pharma spends billions on data. Sales reps crowd the waiting rooms. So why is the doctor out?


Pharmaceutical Executive


2) They obsessed over the customer

Companies who made the transition well have boldly re-allocated their marketing dollars to each audience according to its degree of influence on the purchasing decision. For example, years ago, financial products and services were marketed principally to large institutions. Today, however, marketing is geared toward the end-consumer who has a significant amount of decision-making power.

Within the pharmaceutical marketplace, over 70 percent of marketing dollars are spent on physicians, while patients, group purchasing organizations (GPOs), integrated delivery networks (IDNs), pharmacists, hospitals, and long-term health facilities receive relatively little attention. Does that allocation really reflect the influence structures within the marketplace, or is it just the easiest, most familiar approach, given the size, structure, training, and orientation of the pharmaceutical sales machine?

Successful consumer-oriented companies have also improved the customer's experience. Companies whose primary business is done via the Internet, such as Amazon.com, have discovered the secret to appealing to customers: information gathered through an exchange with them. These companies interview their customers extensively and actively observe how they use the company's Web site in order to improve their experience.

In contrast, only the very best pharmaceutical reps (typically the top 20 percent) have built the relationships required to understand physicians' needs and get feedback on call content. Indeed, spending time in a meaningful discussion with physicians conflicts with the high-volume marketing strategy. Representatives are asked to make eight to ten calls per day, instead of a handful of quality interactions. Pharma companies are left to rely on primary research, which does not educate the rep about the needs of individual physicians as one-on-one exchanges would. So reps don't really focus on physicians' content needs—they focus on the commercial message that their companies need them to communicate.

3) They used technology to innovate

Financial services and other consumer-oriented businesses collect intelligence on customers so they can resegment and rescore them on a daily or weekly basis. Segments and scores are maintained for years on 100 million consumers so that their attitudes and behaviors can be understood over time. Repeated segmentation is a systematic, integral part of the marketing process.

Typically, pharmaceutical companies approach segmentation analyses as one-off studies, if at all. Because they are seldom integrated into the field strategies, they fail to shape the company's overall strategy. To emulate the CPG model, pharma will have to treat segmentation as a repeatable process that matures over time, with results baked into the company's marketing and sales strategies. Each company will need a clear understanding of its clients' needs across functional areas, as well as its own objectives in the short- and long-term.

Other industries with direct sales forces have learned to take advantage of technology at the point of interaction. For example, insurers have been using laptop computers and hand-held devices for years to present information about their products and services. With tracking software, managers can understand how long reps spend on a particular topic or slide—feedback that can be used to continuously enhance the engagement as well as the company's segmentation and strategy.

Transforming Pharma Marketing

As pharma companies become more consumer-oriented, they must be ready to reconfigure the thinking, processes and structures of their organizations. This change can take three to five years to complete. Six steps lead toward transformation:

1) Reinvent the Marketing Process

It all begins with the cardinal rule of marketing: Know your customer. Today, for the most part, the pharmaceutical industry views each physician customer in terms of his/her current performance (market share for a given product) and potential market value. Each company uses basically the same data inputs and metrics, so tactical implementation across the industry is similar from company to company. Within the industry, manufacturers have vastly different assets, portfolios, and marketing strategies, which are potentially diluted by this oversimplified view of the customer.


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