Rod Street, a services partner at IBM and speaker at eyeforpharma’s recent eMarketing Europe 2008 conference, says that although pharma’s commercial model has been undermined on a large scale, the industry will catch up, because it needs to.
Pharma’s perfect storm – fueled by an ageing portfolio, weakening financial fundamentals, tighter market access, increasing customer variety and new channels of communication – will push the industry to make its commercial operations more efficient, learn from other industries, raise its focus on the customer and restore trust, Street says. Meeting these challenges successfully, however, will require tighter integration between sales and marketing and a greater understanding of the impact of marketing decisions and strategies.
The big picture, Street says, supports the emergence of closed loop marketing approaches, which take “a very familiar cycle” – generating brand strategy, making it appropriate for different customer segments and producing and executing the right content – and “puts that on steroids.”
“Closed loop marketing accelerates the move around the loop, making it quicker and much more granular, and gives a clearer understanding of the acceptance of messages, how collateral and assets are being used in the sales process and if a segment is still relevant,” he says.
Street says some pharma companies, including Wyeth and Merck, are already using the approach and gaining ground. He says that two-thirds of physicians see the use of CRM tools as providing higher quality interactions that create more value.
Companies, Street says, can speed time to market and lower costs by going digital. And although the pharma industry is at the very early stages of putting closed loop marketing to work, eMarketing is moving into the mainstream and putting the industry on a journey from a push model to one that is customer-centered, he says.
“The challenge is having something to say that is relevant to the customer,” Street says. “You need a dialog, rather than a monolog. It’s certainly a journey that pharma – and other industries for that matter – need to through.”
With the average consumer being exposed to about 3,000 marketing messages a day, people tend to shut out what’s not obviously relevant and it’s getting worse as the number of messages goes up, he says. So, the industry is moving toward personalization with parameter-based delivery of the message, based on multidimensional assessment approaches to tailor the message to individuals and more coordinated communications across functions and channels.
“The commercial model has to be more productive and can only be so if it focuses more on the end customer,” Street stresses. “We’re going to see much more effort put into gaining insight, but as the amount of available information grows, getting informed insight will become more and more challenging.
Eventually, however, Street predicts messages will be adapted in real time, which will lead to a whole new way of marketing with different operating characteristics. For example, it will require “hybrid skills,” he says.
“We’re going to need to cross the silos in marketing and skills are going to have to come together and cross over among the brand, web and database marketing camps,” Street says.
He suggests that three key capabilities will be needed to succeed in this “new world”: insight (driven by digital eavesdropping), interactions (to enable dialog not monolog) and integration (to create one data and channel set).
Insight, Street says, relies on structured and unstructured data. Structured data, he says, comes from customer interaction activity, behavioral responses and response models. Unstructured data includes competitive patent activity, strategies and profiles, social network connections and patient understanding and interests.
Street says Merrill Lynch research suggests that 85% of all business information is unstructured, including text on blogs, websites and news wires, as well as calls into call centers. “At the moment, you can do very little with that data, but there are a whole suite of things coming in that will allow you to better search and capitalize on it,” he says.
The second key capability – interactions –will be supported by an industrial infrastructure of common standards and efforts to “clean” data, Street predicts. “It will be based on a personalized contact structure that, for each customer, includes information such as how often to call so that they don’t get fatigued , channel preference and areas of interests,” he says.
Integration, the last key capability, is undergoing heavy change. “We’ve got to break the silos among marketing, sales and service,” Street says. “It’s going to be based on a much more robust data set, giving marketers something much more like a 360-degree view of their customer. And that will transform what we’re able to do over the next five years.”
The industry, Street says, is learning from others, but is only in the early stages of a transition.
“Beyond the current use of closed loop marketing by pharma, lie even more opportunities through greater parameterization, tailored by stronger analytics that will build a deeper knowledge base for marketing in all channels,” he stresses.
Author: Lisa Roner, editor, eyeforpharma
