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
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
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.