Pharma’s Digital Lens

As I meet more people and discuss their digital ideas and strategy, I think Pharma looks at digital through the wrong lens. The question I am often asked is: “This is my business model, how can tech help?” I think trying to answer the question framed that way cannot lead to the write answers. It is simply too product-centric. It is all about me, my Rx and my brand.

Instead if the question was to be re-framed thus: “I get a sense that it’s not business as usual. The fundamentals are changing. What should I do?”, I think business leaders could open their marketing teams to considering many more possibilities than they currently do. This would be true customer-centricity since the concern here is about how to serve the customer better in a changing environment, rather than worrying about I, me and myself.

Trying to make teams think of how to use technology in the existing business model and in the current framework can be misleading. The shift is fundamental. Do business leaders think this is understood and internalized well by everyone?

Maybe the real problem is that the shift is slow and imperceptible. Fundamental shifts creep upon us and are imperceptible until we are engulfed by it. For eg: the shift to a rental economy (I rent a car instead of owning one, I rent a home away from home, instead of staying in an expensive hotel) wasn’t felt and perceived by everyone. Yet, today, Uber and AirBnB are a way of life. Similarly, today, we can’t imagine life without touchscreens, but Nokia was King not so long ago. There are many more such examples of how imperceptible fundamental shifts have damaged the businesses of many a strong incumbent.

So if pharma marketing teams feel that fundamentals aren’t changing in the way customers behave or the way business is conducted, then probably forcing them to adopt digital won’t work. It explains why so many say “we do a lot of digital”. You don’t “do” digital. You “go” digital i.e. transform. You “do” digital if you are either forced to do it, or you don’t understand or agree with it. If you don’t feel the shift, then you probably don’t need digital. So, don’t do it.

However, if you’re worried about missing out, or that its not right to avoid digital, then maybe you feel the change in your gut, but you aren’t too sure. So look more closely. Do you know your customers really well? Or do you think you do? Are they still the same? Or are there signs that things have changed?

Once you understand and agree that the shift is indeed happening then begin to re-examine the basis of your current business model and framework. Look for areas which don’t appeal to your customers and see if tech tools can help you regain the engagement of your valuable customers.

That’s the essence of transformation:

1. Ask if you notice shifts in macro factors such as environment, customer behaviour and business basics.

2. Update your understanding of each factor.

3. Identify areas in your model/framework that are outdated.

4. Can tech help to update?

This would be the right lens through which pharma looks at digital.

Digital Awareness to Digital Utilitarian

Two unrelated new articles caught my attention last week. The first one was about a prominent Indian pharmaceutical company who seemed to have got into the news for their digital strategy. The second one was a comparison of prices for mobile data across the world.

The first news article about the digital strategy of a pharmaceutical company intrigued me, as it did many others – given a tweetchat that ensued during the day. My intrigue was about how this company used technology to do more of the same, rather than to carefully consider the different options that technology throws open. This is a classic case where digital is ‘done’ instead of the business transforming to leverage technology.

I will not embark on a long post on the merits of digital transformation since I wrote a bit on the topic in the past. Suffice to say that technology is best utilized when its potential is understood. Instead of looking to find how technology can help a business do more of what it is already doing, business leaders must seek to understand what new tech tools can offer and how those new options can transform the way they did business. “Moving beyond the pill” is not merely the stuff that ppts are made of. It is right here in the real world.

It is well known that there is tremendous growth in technology and the number of tools that have emerged from it. What is not so well known is that those tools have application in the pharma business model and can solve for many an inefficiency that business heads have worried about. Very rarely do business heads seek insights into the tech that they buy, or the tools that they deploy. Business plans, when looked at from the window of such insights, can look inadequate and tech can then be very meaningfully deployed to get much better results or to achieve a business objective in a much easier and cost-effective manner.

This is the essential difference between being digitally aware versus being a digital utilitarian.

A digitally aware business head generally considers digital to be ‘in addition’ to organizational objectives, thinks of technology as more important than strategy and will spend huge resources to buy new tech and as the novelty wears off, declare tech to be of no use.

A digital utilitarian will on the other hand, understand that the need to change is not because tech is available, but because the fundamentals of business and customers have changed. These business heads realise that customers are well into the digital economy. Doctors, patients and caregivers alike, search for a lot of health-related information on the net. Can you therefore not afford to be where people are looking for you and insist on pushing more money after bad, on a sales force that doctors increasingly reject? A digital utilitarian will thus, be acutely aware of the challenges that the changing environment has on his business and will look for tech solutions to *transform* the way he reaches out, engages and converts his customers.

Typically, pharma businesses grow when more doctors prescribe their brand and patients consume it. This means that these two sets of customers need to be familiar with the brand. The current pharma model falls short on both fronts. The company with the largest sales force in India can barely cover 3/4th of the doctor universe. Others fall woefully short. On the patients’ front, in most cases, pharma is still learning how to.

This brings me to the second article that caught my attention – the one comparing the prices of mobile data around the world. No one needs to be told about the penetration of mobile phones in India or the emergence of high speed and dirt-cheap (Rs. 18 per 1GB data compared to global average of Rs. 600) data connectivity. How many pharma managers have changed their plans or even thought about this? When I recommended this to clients I was countered by the lack of speed that accompanies the cheap prices. They don’t seem convinced even when I tell them that online video audiences are expected to double to 500 million by 2020. What does that say about speed and connectivity?

Almost every pharma business worries about increasing awareness, penetrating and gaining access to new customer groups and geographies. If these are your business challenges, shouldn’t you be looking for tech options that can help you achieve this? At such cheap data prices, you have so many options to create live channels, conduct social media campaigns, create communities, reach specific targeted customer groups or even something as mundane as increasing the number of contacts with your targeted doctors at a fraction of the cost of hiring new reps.

Technology offers a plethora of solutions and more to tackle these mundane problems that have plagued pharma for years. Pharma on its part has moved from being digitally illiterate to digitally aware. The next step towards business transformation would be to become a digital utilitarian.

The Digital Economy

The first time I heard the term ‘digital economy’ in the medical context, it was from a reputed doctor who was a co-panelist and speaker at a company town hall event on digital marketing. It did not surprise me one bit that the doctor knew more about the digital economy than most of the pharma marketers gathered in the audience. But, it set me thinking.

The digital economy is the effect that advancements in technology have on the ways of doing business. Things change in the digital universe only in shape and form. The principles stay the same. It is probably why marketers think that everything is new. They have simply forgotten the old.

Customer engagement, not products or services

While in the analogous world the golden rules of marketing have gathered a thick layer of dust, the digital world is brutal. It is ruled by customers who are spoiled for choice. In this economy your business is no longer only about your products or services. Customers believe product quality and features to be hygiene factors that are to be taken for granted. They do not give brands that dupe them a second chance. Not only do they expect honest and transparent business, they pay a premium for brands and companies that engage them.

Rule 1: In the digital world, your business is to engage customers in the most meaningful ways.

Data, not money

It goes without saying that customers will never engage with brands that do not recognize them. In the words of Keith Weed – the CMO of Unilever, customers today are informed, presumptuous and impatient. If you do not know enough about your customers to engage them almost instantly, they will ‘bounce off’ your website. They presume that you are tracking them and that you know everything about them. And it makes them impatient if they think brands will make them waste time by getting to know them when all they want to do is satisfy their needs. This makes data the new currency – not money. Money is just incidental for customers to get what they need and they will choose to spend that money wisely. Brands or businesses that do not know them, will not get their money.

Rule 2: The digital economy is powered by data – not money.

Customer experience trumps all else

If customers expect you to know them well and are willing to engage only with those who do, there is a reason for it. Let’s say you Skyped with your friend one morning and she told you about a new book or a video game. It fascinated you. You never heard of it and you want to know everything about it. Instantly, you Google it and read up every review that you can lay your hands on. Once you have, you want to buy it. Amazon it is! All in the matter of a few minutes. And since you’re all happy, you want to watch a new flick on Netflix.

Now imagine if this scenario had played out 15-20 years ago. You would have had to go over to your friend’s place to have that conversation and then walk over to the lone book store, then off to the bank to withdraw some money and then back to the store to buy the book or game CD. And if you had the energy to watch a movie, then you would trudge off to the local single-screen cinema to try your luck with buying a movie ticket on the black market.

Rule 3: Customer experience is your competitive advantage

Digital has made everything so easy! In the new world, experience trumps everything else. Digital natives keep ‘in touch’ on social media, text their friends more than speak to them, transact online, cannot remember when they last went to a supermarket or to the bank and don’t know what it means to have to wait for a cab!

Its almost like the physical world doesn’t exist anymore.

Why would you think that doctors and patients are any different? Digital has (in most cases) done away with time and distance. One can talk to a doctor on call and not have to go to a clinic or hospital (unless in emergencies). Doctors can get all the information they need at the click of a button. They don’t depend on medical reps anymore for it. And that’s probably why they don’t value meeting them so much anymore.

This is not to say that medical reps have no jobs to do. Far from it! It means the nature of their jobs have gone back to being what they were originally meant to be. The time-tested yet now forgotten – serve the customer. Its time to brush the dust off those principles.

I didn’t say this – the doctor at the town hall did. Doctors get the digital economy. You can be dead sure that he and his colleagues aren’t waiting with bated breath for pharma to start participating. Its time we accepted that and played by the rules.

 

The Digital World – Be there or be square!

A few weeks ago I had the opportunity to talk to a group of mid-level pharma marketers on what marketing means in a digital world and how the rules of the game have changed. I began by asking them what they thought was the basic purpose of a marketer. They responded in their own ways and after a bit of debate, we agreed on headlining it as “promoting my product”. Didn’t that sound too much like a product-oriented approach, I asked. Isn’t that exactly your problem as a pharma marketer? That there is a clutter of products? That the market is commoditized with over 60,000 brands? Heads nodded in agreement.

As the group warmed up to the chat, they threw up the challenges that they faced every day. Customers did not see value in sales reps calling on them, hence did not give them more call time in their clinics. They often complained to senior company executives who called on them, that pharma marketing was getting dull and boring and did not provide them with information that was helpful to treat their patients better. On their part, marketers faced the constant challenge of slow sales and sought to constantly improve product sales. They wondered if the panacea for all their problems was “digital”. Is digital the answer, was their eager question.

Of course not! Digital is not the solution to all the problems that the industry faces, but it surely is the way the world is moving, so why not catch up? If the pharma industry – that for long had held up the flag of innovation – was comfortable launching new and better products, why was it such a laggard in recognizing and adopting the advancements in technology?

Digital is simply about leveraging technology

It is often misunderstood that digital means reorienting the entire company and sometimes even the business model. This is not always required. Most pharma companies have very customer-facing business models. A majority of the industry makes a sincere effort to understand and serve customers. Going digital simply means understanding technology and how it can help the company serve its customers better. It’s more about the mind-set than anything else.

Shifting the mindset

If the dominant mindset in a company is “promote my products”, digital does play a role, but the purpose of digital adoption might be slightly different as compared to another company where the mindset is “engage or serve my customers”. If more and more customers have an increasing digital presence, does it make sense for the company to not be there? Like an old adage goes, “fish where the fish are!” If all the fish are downstream, looking for them to bite upstream might be stretching the optimism a bit, wouldn’t it? So, if your customers are looking for information online and using digital tools and platforms to update themselves, would it make sense for you to not be there? As they say in America, be there or be square.

Misplaced obsession with sales

A “promote my products” mindset betrays an obsession with product sales. While this is not necessarily bad, it misses a crucial point. You can sell only to those who engage with you. If the idea is to simply push your product all the time, it won’t necessarily work. However, if the customer is engaged and sees value in engaging with you, they are already sold to. Engaged customers don’t need to be sold to, they already love your company and your product. Sometimes, they are even willing to pay more for your product because they love it so much. While this may set off alarm bells in the howling winds of price control, the point is that engaged customers become agnostic to price. This means that you will succeed even if you have a premium-priced product. Provided you have engaged your customer base very well and consistently. Digital provides you with tools to do exactly that!

If today the only way you engage your customers is through your sales force, why then would you ignore or avoid more channels of reaching and engaging them? Instead of just the visual aids that reps carry, technology allows you to create content in multiple different ways (graphics – simple and in 3D, videos – short and long, using augmented and virtual reality and a lot more) that bring novelty and value to customer interactions. Platforms allow you to host all the wonderful content that you create and apps allow that content to be distributed in the most efficient manner to your customers – at a time and place of their choice. And the best part is that all of this augments the efforts of the sales force. Where you have one channel (the sales force) to engage your customer, technology allows you multiple channels. Hence, multi-channel marketing or MCM.

Marketing in a digital world

In an almost totally digital world, marketing is therefore about:

  1. Engaging your customers and not merely promoting your product.
  2. Providing to customers what they want to see and not what you want them to see
  3. Personalizing content – each individual (your customers are individuals too) has different likes and dislikes. Personalise by curating content. There is a ton of it already created, so don’t waste your time creating more (as much as you would like to think otherwise, your visual aid bores your customer. So show her what she wants to see or someone else will).
  4. “Pulling” customers. Pulled customers look for excuses to engage. They wait for more content, new products and are willing to pay more for it.

I asked the group to imagine a world where they could provide their customers a fast, personalized and frictionless experience. They had difficult imagining it, so I asked to think of the kind of experience that they had while searching for information, buying or selling something and completing banking transactions online. All at a time and place of their choice. That’s the kind of experience your customers seek in the digital world. It is your role to give them that experience. So, dear pharma marketers, be there, or be square!

Digital Darwinism

Digital Darwinism is when technology and society evolve faster than an organization can adapt. Digital Darwinism is a fate that threatens most organizations in almost every industry, but particularly those in the pharmaceutical industry in India.

Evolution of technology will make it tougher for pharma companies to differentiate, engage customers and compete, unless they master digital evolution.

Digital Evolution

 

 

Leadership: Spotting Opportunity in Turbulence

Despite conventional wisdom exhorting that change is constant, industry veterans panic upon confronting it. That’s because they are unprepared – either entirely or shaken by the sheer velocity with which it arrives. The pharmaceutical industry – both globally and in India- is passing through its most turbulent times in recent memory.

Global challenges such as the patent cliff, declining productivity in R&D, regulatory and pricing pressure and healthcare reforms while ruffling traditional MNC business models, have thrown open vastly productive markets to Indian branded generics players. Back home, developments such as MNC takeovers of leading Indian businesses have caused the government and other stakeholders to be jolted out of inaction and scramble to search for a method in the perceived madness.

Will companies – hitherto considered stable – suddenly get taken over? Will management decide to lay off people as profits erode? Changes like these create fear and distrust which often leads to flight of talent and significantly erodes productivity and growth in the industry. While often fueled by a lack of transparency by management, fear and distrust is also created either by ignorance or an inability to peer into the future. And lack of transparency leads to conspiracy theories, rumors and perceptions that are more often way off target. This is where strong leaders make a difference.

When the conversation is about change and uncertainty, strong leaders can inspire the field force to recognize that uncertainty creates opportunity and that change can bring the results they wanted and yearned for. Field managers interact daily with the field force and this familiarity works best in difficult and uncertain situations. In the face of uncertainty, front line managers must encourage the field force to explore the uncertainty to find opportunity and capitalize.

Managers can work with their teams to create a range of forecasts for: an expectable future, a future they most fear, and a future that would be surprisingly successful. These forecasts can include great strides in better customer service models, upgradation of personal skills and competencies and may even venture into areas such as better personal care and healthy lifestyles. Field managers can work on strengthening the psyche of field colleagues in stressful times. This preparation can help create tough teams that thrive in chaos. A clear competitive advantage in troubled times. On a radical note, imagine the corporate equity that can be amassed if you have teams that are trained to operate in a stressed system that is worse than we have now and vulnerable to events such as a earthquakes, terrorist attacks etc.

Full consideration of the future demands that we are prepared for both high as well as low points that business cycles bring with them. Keeping images of both success and failure in mind helps us to focus on the key decisions and actions that will make the difference between what we want and what we fear. Helping the field force prepare for demanding times is where the role of managers become most relevant.