According to Ilze Puckure, country manager in Latvia and Estonia for Ivax Pharmaceuticals, companies are beginning to realize that it will take more than managing efficiently, merging or acquiring oth
According to Ilze Puckure, country manager in Latvia and Estonia for Ivax Pharmaceuticals, companies are beginning to realize that it will take more than managing efficiently, merging or acquiring other companies, creating big sales forces or increasing investment in promotion to drive sales. Building long-term and valuable customer relationships, she says, is a critical key to success in the market.
Customer Relationship Management, she says, is about interacting and creating an emotional bond with customers, creating a positive attachment in a customer's mind and loyalty while differentiating the company from its competitors.
Loyal customers, Puckure says, write regular and repeated prescriptions, sell by way of mouth to their colleagues, become immune to the pull of the competition and believe your company provides the best products to meet their patients's needs.
Data, she says, suggests that just 20-30% of customers are truly loyal. Others are just satisfied or have no other prescribing options. Building customer loyalty, Puckure says, is a complex process that takes one to two years to complete.
One survey, she says, suggests that return on investment is declining for traditional sales and marketing tactics, with ROI dropping as much as 25% over the past 5 years. Globalization is almost coming to bear for generic pharmas. Cases and issues in other countries, Puckure says, quickly make their way to regional markets and wield an influence locally.
And with reps getting progressively less detail time with doctors, customer relationship building is gaining importance.
Customer loyalty leads to more prescriptions, better contacts, higher sales efficiency, increased turnover and lower marketing costs for the generics industry, Puckure says. And she stressed that customer loyalty creates a barrier to the entry of competitors and is a chance to enhance a company's reputation with customers.
Sales forces, she says, can work with physicians to better understand what benefits are important to them not just about a company's products, but about their lifestyle and preferences, and to secure more information about product specifications and expectations. Sales force knowledge and experience can be a real competitive advantage for companies, but because some physicians have been inundated by rep visits, many have ceased to see the value reps add
The customer lifetime value concept is a new approach, Puckure says, that takes into account the value, over at least the next five to ten years, of a particular segment or therapeutic area. Acquiring new customers, she says, is five times more costly than retaining an existing customer. But companies are working to calculate the cost of activities such as sales visits, events, sponsorship and determine the ROI, attaching the value to sales reps's profitability and anticipated growth or decline of profits in the segment.
Company reputation is an important component of establishing strong customer loyalty and is a fairly new concept for generics makers, Puckure says. Surveys show she says that 45% of doctors believe generics are of inferior quality. Eighty percent (80%) she says lack information on generics and 20% say they believe price determines quality. Even sales people in the industry say they feel there is more prestige in working for branded companies.
But building a strong corporate reputation does not require big spending or going through the media, she says. It is all about how companies respond, communicate and sell, she says, and whether they are keeping promises or not.
Puckure says customer loyalty guarantees long-term relationships and is about more than simple customer satisfaction. And although there is no one answer for how to create customer loyalty, it is worth striving for, she says, because it increases a company's return on investment on its sales and marketing tactics, something the whole industry is striving to achieve.
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