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The prescription for better pharma marketing: Gain understanding of your physician-customers by leveraging key analytical insights.
According to The Wall Street Journal, the pharmaceutical industry's US sales forces has declined 10 percent from a peak of 102,000 representatives in 2005—and an additional 20 percent decline is predicted by 2015. Couple this with the fact that more physicians are restricting access to sales reps, and you've the makings of a disaster.
Jeff Wiltrout, Ph.D
In the near term, pharmaceutical companies can neither afford the same level of sales support, nor expect the same return on their sales force investment. The outcomes will be cost reductions and revenue reductions. The bottom line is that fewer sales reps equals fewer sales.
To meet these challenges, the industry must leverage new approaches to building relationships with physicians, using non-personal promotions to offset the financial impact of changing industry dynamics. The good news is that physicians support this approach. In SDI's ePromotion Annual Study 2008, 67 percent of physicians surveyed have a positive attitude toward ePromotions, and 73 percent considered an ePromotion to be equal or superior to a face-to-face promotion.
Pharmaceutical marketers have to understand the needs and behaviors of their key audiences in order to build services, messages, and non-personal promotion programs that are relevant and valuable to their physician customers. Physician relationship marketing (PRM) is about delivering the right message to the right customer at the right time.
Until recently, identifying customers was relatively easy. Doctors were the decision makers that drove product demand. Yet pharma companies realized they were losing billions each year through patients' poor adherence to medication guidelines.
In response, pharmaceutical marketers adopted consumer relationship marketing (CRM) strategies and tactics. Long practiced by retail, finance, and other industries, CRM was adopted by the pharma industry to advance its consumer marketing objectives. However, for pharmaceutical marketers, the overall impact of CRM has been small; they have not effectively leveraged CRM to change their direct-to-consumer business model. In fact, 80 percent of consumer-directed marketing budgets are still focused on general advertisement and acquisition efforts, such as print and TV campaigns. CRM has been used to generate incremental revenue gains around adherence, but overall, marketers have not made adherence or CRM a priority.
PRM, on the other hand, has the opportunity to revolutionize the physician marketing model by re-prioritizing of direct marketing to physicians. Today, physicians are bombarded with multiple, conflicting messages for the same brand. PRM gathers brand insights, identifies physicians who have a higher propensity to respond, and executes precise tactics to leverage data and knowledge.
Successful PRM is rooted in understanding the customer. It's not about using lower cost channels to deliver the same general, often ineffective, messages. Effective PRM accounts for the needs of specific, targeted physicians. It involves creating personalized messages, content, and services. In short, it's about being relevant by leveraging knowledge gained through PRM analytics, which can be categorized into three broad areas: data management, analytics management, and performance management.
1. Data Management
Data management is a process that capitalizes on quantitative techniques to identify all valuable data that can be used. Data is the pharmaceutical marketer's analytic fuel. It helps create a 360-degree view of a physician by including details such as:
» Promotion history, both personal and non-personal
» Practice and institution affiliation data
» Managed care data
» Demographic, socioeconomic, and profiling data
» Behavioral data (i.e., prescription-level data)
Pharmaceutical marketers often do not capture this data, and whatever is captured usually exists in separate databases. The first step should be creating a data infrastructure and process to capture, evaluate, and integrate this data.
At one large pharma organization, physician data existed in highly disparate systems: One database contained physician/practice identification data; another contained physician monthly Rx-level data; another contained managed care plan data at the geographic level; and yet another contained sales rep primary detail equivalent (PDE) and physician-targeting data. Little historical non-personal promotion data existed; what did exist was stored with the data vendor.
To improve data visibility, the pharma company evaluated its data, plus other data of similar types, and determined which data were valuable. The company then built a central marketing database to house the data so that it could be evaluated at the physician level. The new system created, in effect, a 360-degree view of each physician.
2. Analytic Management
Analytic management leverages the tools and techniques that generate marketing insights. These insights help:
» Define the value of each individual physician to your brand(s), based on criteria such as prescription behavior
» Track each physician's behavior across all touch points, including personal (sales rep details) and non-personal promotions (such as direct mail and e-mail)
» Inform the marketing decision-making process and improve program performance
Analytic management is about harnessing the best analytic practices and generating insights. It can allow you to use specific attributes to target individual physicians based on their likelihood to respond to or be impacted by a non-personal promotion. This change alone—from targeting entire segments to targeting individual physicians—can create a huge increase in campaign performance. This understanding can also lead to the development of promotion mix models.
For example, one leading pharmaceutical company could only select physicians at a very general level to receive non-personal promotions. The company had essentially used the same segmentation (based on physician Rx volume and market share potential) that the sales force used for its call planning. The company was given a new approach, in which individual physicians could be selected according to specific characteristics such as historical response to or impact of prior non-personal promotions, local managed care situations, local brand and category development indices, etc. As a result, this pharma company increased response to, and the incremental Rx impact of, their non-personal promotions by more than 10 percent.
3. Performance Management
Once analytic management processes are developed, it is imperative that ongoing marketing performance information is fed into these processes to drive continual learning and improvement.
Performance management is the process of testing, measuring, understanding, and optimizing the impact of marketing actions. It is the part of the analytics equation that makes it possible to measure the effectiveness of marketing programs across the enterprise. Moreover, performance management helps align your campaign objectives with the overall objectives of your marketing program, allowing marketers to:
» Deploy metrics to support marketing spend and value optimization
» Optimize contact strategy by channel, message, and/or offer
» Conduct complex cross-channel and cross-brand scenario planning
» Design multivariate tests that help determine the effectiveness of marketing approaches
Perform promotion mix modeling to uncover the ideal cadence and message in your marketing approach Performance management also enables consistent campaign reporting and performance evaluation. If you can predict how your target audiences will respond to your messages, you can reduce marketing costs and maximize program impact. PRM is enabling companies to capture required data, adopt processes, and gain enterprise-wide capabilities to enable performance management.
What's stopping marketers from seizing their data and creating value from their analytic insights? Mismanagement, for one. When not correctly executed, performance management often fails to take into account multiple brands within a company. Yet to harness the power of PRM and truly understand the needs of each individual physician, companies must make a strategic shift from a brand-centric approach to a customer-centric one.
With the proper planning, access to data, and method for collecting and analyzing information, pharmaceutical marketers can gain the competitive edge. Insights from your data can enable new opportunities and demonstrate the ROI of your marketing programs, creating a foundation that enables your company to deliver the right message to the right customer at the right time—every time!
Jeff Wiltrout, Ph.D., is vice president and client team leader of Healthcare Marketing Practice, Merkle. He can be reached at JWiltrout@merkleinc.com