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Beyond CRM Weaving a Loyalty Web


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-01-01-2002

John K. loves his new job on the trading floor of the New York Stock Exchange, and the last thing he wants to worry about is testing his blood sugar in the middle of a busy day. But, as a diabetic with high blood pressure, he knows he will feel lightheaded at about 11:45 every work day-just when the trading heats up. His doctor, who wants him to check his blood sugar levels regularly, suggested a monitoring system that allows him to test and record glucose levels without missing a beat.

John K. loves his new job on the trading floor of the New York Stock Exchange, and the last thing he wants to worry about is testing his blood sugar in the middle of a busy day. But, as a diabetic with high blood pressure, he knows he will feel lightheaded at about 11:45 every work day-just when the trading heats up. His doctor, who wants him to check his blood sugar levels regularly, suggested a monitoring system that allows him to test and record glucose levels without missing a beat.

On a Palm Pilot with a customized faceplate, John presses a spot that registers his pulse and sugar level several times daily. He checks the readings and hits the "send" button, giving his doctor and the diabetes team at "PharmaGoods" what they need to know about his metabolic patterns. John follows his normal eating and medication habits unless the readout, or an e-mail from his doctor, advises him otherwise.

Dr. Walker, John's endocrinologist, examines the graph of John's blood sugar levels from the past three weeks. With a few taps on his own handheld device, he specifies "weekdays only, 11:30-2:30," finding an interesting contrast between those readings and John's weekend records. Walker, in conjunction with the diabetes team at PharmaGoods, is working to customize a treatment plan tailored to John's lifestyle. The doctor also plans to recommend John for participation in a new PharmaGoods study once his treatment plan is established. The trial therapy will be geared to the needs of hypertensive diabetics.

PharmaGoods' managers are keenly aware of the difference their resources can make in the life of a patient with a chronic disease. They have committed time, people, and technology to make that difference. They have accumulated a wealth of knowledge through R&D and marketing to support their customers: patients, doctors, pharmacists, hospitals, and insurance companies. And they know that disciplined gathering, processing, and sharing of knowledge is the central component of a patient-centric customer strategy.

Companies delivering such a high level of support go beyond what is known as customer relationship management (CRM) to a customer loyalty strategy (CLS)-weaving a web of long-term relationships that are trustworthy and sustainable through disappointing drug trials as well as long-awaited breakthroughs.

The Loyalty Framework: customers front and center - A customer loyalty strategy sets up a constant feedback loop, integrating information channels, employees, technology, and business processes to serve customer needs.

Before the evolution of e-business, CRM was touted as an essential tool in the battle for market share. Individually, marketing, sales, and service units were able to deliver targeted campaigns, pricing programs, and customer support based on the analytical and intelligence capabilities that "CRM solutions" delivered. But the explosion of channels created by the digital revolution left CRM practitioners disappointed and frustrated.

This article describes how, in today's channel-rich environment, companies can create and sustain a competitive advantage by replacing traditional CRM with a customer needs- and wants-based, enterprisewide framework.

Securing customer loyalty is not easy. It requires management commitment and introspection. For companies that have always focused on developing and selling products rather than on listening to and serving customers, it may call for a complete reversal of philosophy, strategies, and tactics. In any case, customer loyalty is generated through carefully considering the needs of each customer segment, as well as the people, processes, and systems required to satisfy those needs.

Channeling Experiences

The pharma sales environment is saddled with an unusually complex set of purchasing influences. Healthcare providers write prescriptions based on their own experience and judgment, as well as information from pharma companies, their sales reps, medical journals, the Physician's Desk Reference, discussions with patients, web sources, participation in clinical trials, and a host of other channels. Patients, now more than ever, conduct their own research and suggest treatments to their doctors based on information reported in the popular media and other sources they consider reliable: pharmacists, friends, relatives, web- sites and chat rooms. The proliferation of channels directed to both patients and medical practitioners makes it very difficult for pharma companies to control the quality of information driving purchases.

Therefore, pharma companies must maximize the value of every information channel-inbound and outbound. Those efforts, collectively known as CRM, must be closely entwined with efforts to secure and maintain customer loyalty. In managing the customer experience, pharma companies' employees, business processes, and technological capabilities all play important roles.

Customer-centric companies integrate their operations to consistently deliver a service "experience" in keeping with a set of standards. Those standards are based on carefully acquired knowledge of how each customer segment wants to be served. To create that experience, companies must:

  • Select appropriate market segments and target resources accordingly.

  • Convert awareness to preference. Companies must identify the correct prospects and understand how to influence their buying behavior so that attractive prospects become "shoppers."

  • Convert shoppers to buyers. Companies must make it easy for bona fide customers to do business with them, both when shopping for decision making information and when placing orders. Dialogues with existing customers help shape the ideal experience the company wants to deliver.

  • Convert buyers to repeat buyers. With that group, it is important to identify and plan for customer-defined experiences-"moments of truth" that lead to loyalty decisions-at every point of interaction, leaving each customer feeling they have had a personal experience.

Meeting all four objectives demands a certain level of performance from companies' marketing strategies and staffs. Every channel in the sales, marketing, service, and product development arenas must focus on customers. In practice, customers interact with companies at so-called "touch points":

  • sales representatives

  • national accounts managers

  • company websites, including informational, interactive, and e-commerce sites

  • medical education specialists

  • contact or call center

  • print and other media carrying the company's message.

Although customers may interact with all those touch points, they still perceive pharma companies-and their many divisions-as a single entity and expect them to behave accordingly. Therefore, consistency of information delivery is paramount. Companies must distribute all segmented and individual customer data across the entire enterprise to every active and potential touch point.

Levels of Intimacy: At the heart of personalized customer service is the way companies and customers interact. The highest level - the "most intimate" - brings the most benefits to both.

To allow better data gathering and integration, a customer loyalty strategy requires a more robust infrastructure than CRM does. (See "The Loyalty Framework: Customers Front and Center," page 47.) CLS' prime focus is to identify, develop, maintain, and constantly improve on the capabilities that customers identify as attractors-those that go beyond the basics to satisfy the target population's needs and wants. When operating according to a CLS model, companies complete their data gathering and needs analysis before designing specific attractors, such as informational websites, chat rooms, and promotional programs.

Indeed, rigorous data gathering and needs analysis, aided by a strong core enterprise operations foundation, enable customer-centric pharma companies to formulate and implement the type of process- and technology-based diabetes management solution described at the beginning of this article. The bankable difference is a company's ability to compete with competitors' attractors.

Integration is Key

Once a company's operations are streamlined to improve overall efficiency, adding data and process integration make it possible to deliver a top-notch customer experience at all touch points, particularly through new e-channels. Integration is the key that enables companies to deliver more ways for customers to access products and information, including

  • websites-informational, e-commerce, and wholesaler

  • e-detailing

  • physician portals

  • online patient-and prospective patient-communities

  • moderated chat boards and online guest lectures

  • online collaboration in patient case management

  • online professional symposia to keep researchers at their desks-instead of in airports.

Integration also allows customers to ask for or provide information in confidence. Such opportunities include

  • market research studies administered online at the customer's leisure and analyzed automatically

  • paperless drug trial management

  • one-to-one personalization of treatment recommendations based on a private exchange of vital medical data.

The Intimacy Cornerstone

At the heart of personalized service is the concept of "intimacy," defined as the manner in which companies and customers interact, differentiated by the benefit level that each party expects or gets from the relationship. But only certain customers are candidates for a high level of intimacy, based on factors specified in the company's business strategy and supported by customer input. By design-indeed, at customers' request-many relationships require mere transactional service: "Find the product, pay for it, get receipt, replenish when needed." Others desire a high degree of interaction and put the company's capabilities to the test. The challenge is to understand the degree of care customers require, then deliver it. (See "Levels of Intimacy.")

How can companies do that? The first step is to pose a series of questions to help management understand its goals and capabilities and who its most desirable customers are. Here are some examples:

  • Have we identified all the touch points that customers value?

  • What do we need to capture and act upon all forms of customer reaction?

  • How can we measure customer satisfaction in every encounter?

  • Are our current customer outreach messages always consistent, regardless of the channel?

  • What tools do our employees need to deliver the levels of service that each customer segment wants?

  • Is the company ready for electronic prescriptions and other emerging e-health technologies and business models?

  • Has senior management communicated its vision and strategy for effectively using customer information?

The answers will provide the basis for a strategy and a blueprint for action.

After developing an initial strategy and communicating it throughout the company comes the task of segmenting customers into needs-based groups. Customer needs will determine the levels of intimacy required to deliver value to, and derive value from, each group.

Acquiring and managing needs-based segmentation data is not easy. Here is where the ability to gather and act upon the customer "voice" comes into play. Listening to that voice enables companies to identify "ideal customer values" and deliver the vision of ideal service customers seek. Companies achieve that by aligning their business process capabilities with their business strategy, organization, and infrastructure.

The Process in Practice

Dr. Miller is on his way to a workshop about diabetes and kidney failure. Seeing patients, making scores of phone calls, and dealing with piles of paper each day, the doctor has little free time. Although he needs information, he is reluctant to meet with sales reps. Yet, at his hotel, he stops by a PharmaGoods kiosk. The company has recently introduced FormulaK, and Miller uses the company's touchscreen application to retrieve a brief profile of the new product. Intrigued, he inserts his business card for scanning, types in some questions, then hurries off to the workshop.

The next morning, Chris, a new detail rep for PharmaGoods, sits in Miller's waiting room. To build a sales call plan, she has downloaded the latest information about Miller, including the demographic and prescribing profile of his practice and his attendance records at the kidney disease conference recently sponsored by PharmaGoods. Prepared and confident, Chris catches up on e-mail with her wireless device while she waits-and waits.

Called in at last, Chris offers to supply follow-up information about the benefits of FormulaK to male diabetics aged 36 to 54, who make up a significant portion of Miller's practice. When he asks for backup data, Chris presses the stylus to her handheld screen and suggests that the doctor check his e-mail. At his computer, Miller opens an article Chris has sent.

The wireless device, which also tracks product samples, shows a "green light" for Miller's sample requests. As he signs his name on the screen, Chris produces the samples from her briefcase. Miller tells her that if all visits can be this productive, he looks forward to seeing her again.

In that example, the pharma company used customer shopping behavior-information collected at a touch point (in this case, a kiosk)-to deliver personal service through another touch point (a sales rep), while providing two-way feedback (wireless delivery of the company's message, along with approved product sampling)-all designed to maximize customer convenience while gathering and responding to information.

Because doctors are a significant source of anecdotal as well as measurable patient concerns, there are rewards in store for pharma companies that structure their detailing programs so that both doctor and rep waste little time. The proper level of intimacy is made possible by technology, with built-in mechanisms for collecting the "voice of the customer"-from adverse reactions to their preferred pill types-and by reporting those concerns simultaneously to all parties in the intimacy web.

Toward Partnership

An infrastructure that integrates core operational systems with CRM processes-sales, marketing, product support, and service delivery-at all customer touch points builds message consistency, from web strategies to print campaigns to R&D. By eliminating parallel but isolated "information silos," all parties can work with the same data set in formulating policy and messages. Moreover, the strategy that senior management communicates will guide their efforts. The resulting consistency is another weapon in the battle for loyalty.

At the highest level of customer value, companies, patients, and healthcare providers can interact in ways that look like a partnership rather than a vendor-customer relationship. Integrating systems and processes makes it easy for all parties to share data in a meaningful way, with respect for each others' time. Special websites, devices that record and analyze medical statistics, handheld communication appliances, perhaps even wristwatch-like transmitters, will be enlisted in that effort.

If properly executed, a comprehensive program to direct companies' resources to the devoted service of target customers results in more than a series of isolated-albeit beneficial-new capabilities. Upgrading a company's entire infrastructure in service to customer needs can provide the seamless flow of information that converts knowledge into power.

The bottom-line raison d'etre for all customer-centric efforts is that customer loyalty ultimately drives profitability, cushioning companies against frustrating approval delays, bad news, and damaging price wars. Customer loyalty is a company's best offense in the battle for competitive advantage and its best defense in times of economic uncertainty.

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