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Lynn Upshaw posits that marketing with integrity is key to success in these skeptical times. To do so, a company has to live its brand. In his book, Upshaw tells you how.
IN his new book, Truth: The New Rules for Marketing in a Skeptical World, long-time marketing consultant Lynn Upshaw makes the case that it is neither naïve nor idealistic to employ marketing programs motivated by integrity and truth. Instead, integrity is a practical and proven way of achieving a competitive advantage—the only way for a company to gain success in this age of multiple marketing options and engaged consumers.
Integrity rings true for a brand, which is no small thing at a time when a savvy 10-year-old can spot a phony sneaker campaign in a second.
Truth marketing, however, is not something you can just tack on to a plan. It has to be an integral part of the marketing strategy and its execution. It also has to be an outgrowth of a company's internal culture. The company has to live its brand.
Upshaw's book is both strategic and practical. He begins by asking a slew of penetrating questions, such as: Do you treat your customers as partners, or as nameless sources of revenue? Is your marketing message technically legal, but inherently misleading? Are you focused on building your share of credibility? He then goes on to offer advice and hard-core solutions for marketing with integrity.
From a selfish point of view, the only problem with Upshaw's book is that pharma is not included in his discussion of different industries. Which raises the question: Can his solutions for marketing with integrity be applied to pharmaceutical companies at a time when the industry's reputation is so low it's equated with the tobacco industry?
Curious as to his opinion, Pharmaceutical Executive recently contacted him to find out:
You covered a number of industries in your book, but not the pharmaceutical industry. Why was that?
I could have written a whole chapter, or even three, about the pharmaceutical industry. I was trying to make the book about as many different kinds of industries as possible.
What would you have said in those missing chapters?
Trust is critical for pharma. It deals with products that, obviously, impact human beings' health and, frankly, their lives. Already, you're involved in something critically important to people. Consequently, if you promise a product will help my heart and it turns out to hurt my heart, the trust is broken to the point of almost betrayal: I've trusted you, and I've trusted my doctor, and suddenly things have gone sour. It tends to escalate. You now have people saying: "I don't know or care about your cost recovery. Why are these drugs so expensive? Why isn't everything generic? Why can't I go to Canada to get my drugs?"
These things are happening at a time when the industry is paying enormous fines for alleged malfeasance. It's really kind of coming to a vortex. If I had to pick a single industry that needs to operationalize integrity in its marketing, it would be this industry.
Given pharma's regulatory climate, can the marketing strategies for trust still be applied?
When you deal with the government, you always have to worry. Still, I believe the strategies can be applied. But think of where the problems have been: Think of a company that has taken outstanding corporate social-responsibility actions. They've invested in communities and done a lot of other good things. But that meritorious approach may not be ingested by, say, sales people. So, if the sales people are doing things that are marginal or questionable at the same time someone in another department is doing a wonderful work for the communities, that community work can be overshadowed in an instant by a scandal regarding sales practices.
Is that what you mean when you talk about the quality of a company's internal culture?
Yes, and it is really the point of the book. It is about how to incorporate strategies into your marketing plan so that issues of ethics and honesty are built in and people basically police themselves.
Sales people, for instance, will say, "No, I'm not going to print an article under a doctor's name when the doctor didn't write it." They will stop themselves. It's naïve to think it's all going to happen overnight, but I believe it can when I see a company like Johnson & Johnson that, generally speaking, operates on a highly ethical level. The company's founding credo is still alive, and it's trained into people. Senior executives regularly refresh themselves on Johnson & Johnson's credo and what it's about.
Other companies in the industry can take heart. They can see it is possible to incorporate such practices into their working operations.
At Merck, in the aftermath of the Vioxx scandal, new CEO Richard Clark was quoted as saying "A crisis is a terrible thing to waste." He talked about opening blocked channels of communications so the company spoke in "one voice." Is that what you mean?
The idea of speaking with one voice, of unifying around a common culture and a common value—along with internal brand building and other things of that nature—is something corporations have started to do more and more frequently. It needs, however, to be based on some fundamental beliefs, such as: "Let's market not just legally, but also honestly. So we're not saying, 'Okay, the lawyers signed off on it, therefore we can do anything.'"
This is not rocket science; a lot of it comes down to common sense. A self-evaluation test you see popping up more and more in corporate guidelines is: If you're not sure about taking an action, ask yourself, If it was a headline tomorrow in the newspaper, would you be proud of it, or would you be ashamed of it? That's a good litmus test.
You point out that marketing with integrity is not only good practice but also a tremendous source of competitive advantage when integrated into a plan.
In marketing, we deal a lot with what's called drivers of choice: the reasons people pick one brand over another. Increasingly, people are looking at both the brand and the company that makes the brand, that sponsors the brand, and asking themselves, "Can I trust them?" Brands are about trust. Brands don't succeed without creating trust. We've seen, however, so many instances in business in general—and marketing in particular—where trust is undermined. And certainly in the pharma industry, it is extremely common nowadays for a brand to come under increased scrutiny first by, say, a regulator and then, ultimately, by the public.
The pharmaceutical industry has come late to the concept of branding. The question now is how do you brand so consumers (including doctors) can trust you?
The issue for pharma is: If it comes from such-and-such a company, can I trust it? And here is a key point: People don't expect companies to be perfect. They know they make mistakes. It's when you hide something—or if there is a sense that you're hiding something—that there's a problem. It's very much like politicians. We expect our politicians to make a mistake, but if they hide it from us, then we won't forgive them.
So, the cover-up ends up being worse than the incident itself.
A lot of people now have the impression the pharmaceutical industry has to be forced to tell the truth. That is the biggest damage of all. You saw what happened with the tobacco industry. Tobacco resisted, resisted, resisted as long as they could until it just washed over them. The pharmaceutical industry is coming under such pressure. The name of the game for really smart companies is disclosure: Disclose, disclose, disclose. If you make mistakes, people will forgive. But the more you're forced to disclose, the more people will withhold their credit—and their approval. They'll say, "Well, they're only doing it because they're forced to do it." As opposed to companies that do it because they're forthright about it.
Think about the companies like the ones I used in the book, including Johnson & Johnson. It took years for these companies to understand how to operate well and then how to present themselves.
Patagonia will go out of its way in its catalog to explain that it is not satisfied with the way it makes certain products. They still are harming the environment. In other words, they're apologizing for something we'd have no way of knowing about. So that's what I mean about full disclosure. It takes a while before people get the hang of how to do this, particularly if your industry has been doing something different than that for decades.
Do you think change hasn't occurred because there has been no incentive?
Historically, in the pharmaceutical industry, it's so competitive that there's little time to recover enormous costs invested. That's when people take shortcuts. And when they take shortcuts, then they end up paying.
The difference now is that the spotlight is on the industry. The pharmaceutical industry will not get away with nearly as much as it did 10 years ago. It's very much like what the mutual fund industry went through and any number of industries. When the spotlight is on you, it's far better to say, "OK, how can we operationalize this?"
The last person you trust is the person who says, "Trust me." So it's not like you're going to advertise "trust me," but you can begin to build systems that guarantee that people operate with integrity. And then eventually that information gets out to people that the company is the kind of company it is.
Keeping It Real
So you believe it's an inside job first?
Absolutely. Pharma may be selling products, but essentially they're in the service industry. I buy a medicine because it provides a service to me. In any service industry, the people themselves have to live it before it really becomes something the external audiences believe. If you look at the great service companies (Southwest Airlines is a classy example), those people live what they believe; they live what Southwest is supposed to be about, and it makes it easier to operate and the customers get it. If they don't live it, and we all have flown on airlines where they don't, then you see this big gap between what they believe and what they claim they are offering us. So, yes, there is very definitely an internal process first.
Isn't it harder for pharma because it's marketing to physicians and consumers alike?
Physicians were once considered to be the people of greatest integrity. Nurses now rank higher. One of the reasons is that some doctors, in association with the medical industry, have been tainted somewhat by pharmaceuticals. Consumers are aware doctors give us free samples. Where do they get them? From the pharmaceutical companies that make them. It's coming out that the pharmaceutical industry is taking the docs to lunch—all these things that were backroom things are now becoming very clear to the public. I do think it's possible to market to doctors; but now you must do it to prop up the doctor, not to demand, not to degrade the doctor. The doctor can't be tainted by what you do. You two have to be partners.
Would it be wise to link the drugs with the manufacturers, say, Pfizer Viagra, in order to benefit from the drug's tremendous success?
It's important for pharmaceutical companies to begin to take credit through what's called endorsement branding. An example of this in the accommodations industry is Marriott. Marriott has Marriott, but then it has Courtyard by Marriott and then it has, you know, Hemphill Suites by Marriott and so on. So they take the Marriott name, which is a very powerful name, and they weave it in. Over time, if the Pfizer name, or whatever, is associated along with successful drugs, then it's consumers begin to associate the Pfizer brand with 'I think that's good.'
Is it too late for pharma to employ the strategies you outline?
It's just so hard now for pharma. Everybody assumes the worst for the industry. You can run advertising and talk about the wonderful things you've done for the world, if they believe that they can't trust you, it's a waste.
But you can operationalize integrity, and the industry needs to start doing it pronto. Pharma has a model to some degree with J&J; so I certainly would spend time studying that company if I were trying to do this.