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.

Don’t make it feel like it’s marketing

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Changes in pharma marketing will be profound with the advent of technology. Digital marketing will allow pharma marketers to engage the customer in very meaningful ways which were not always possible through the work of sales reps.

While sales reps are important in the scheme of things, they are but one channel. In-clinic time with doctors is massively decreasing today and that is because neither the channel (rep) nor the content can engage the doctor and hold his attention.

Through digital it is possible for pharma to know more about their customers than they ever have in the past.

This additional knowledge is thought to hold the key to understanding the customers needs and wants. Through this pharma can offer better services to them, thereby building loyalty along the way.

None of these tenets are new. This is what marketing is about. However, most of it has got lost along the way as pharma-doctor engagement became tactical and transactional; from information sharing and knowledge building to ultimately benefit the patient.

Overseas – especially in the US, pharma is more advanced in the use of digital technology considering that the market is matured to these advances. In India, pharma is scraping the tip and tentatively exploring these options. We have started to see pharma companies create websites, run email contact campaigns, conduct online CMEs and webcast them, create apps for their brands as well as explore the creation of discussion forums and social pages.

While all these are great initiatives, not integrating them will not allow doctors to understand the context of each initiative. Therefore, each digital piece is likely to be viewed as a random one. If doctors are unable to link all its initiatives, the company also risks their customers not consuming/linking key pieces of information. This can make the strategy look incomplete and leave customers with a sub-optimal experience.

Is Digital effective?

This can be viewed in two different ways. The first way is to view digital marketing as another channel of marketing. This makes it integral to the entire marketing strategy and increases its overall effectiveness. This makes it almost impossible to evaluate the effectiveness of individual pieces of the strategy and say that it was digital intervention alone that drove the success.

The second way is to re-assess the things we measure to define success. Generally marketing campaigns measure their success against increased prescriptions for their brands, more sales, higher market share etc. Yet as David Ogilvy said, “I know half of my advertising budget works; I only don’t know which half”.

The good part though is, digital can track and stream data like no other channel ever could.

We know how many people opened emails, how much of the email they read, clicked on a link, watched a video, visited a website, how long they stayed, what content they read and where they went from that website. These are the sort of metrics that digital marketing can throw up and these are the ones that should be measured to determine success or determine the specific lift that digital intervention provided to the marketing campaign.

The best part of digital is that when done right over a period, it becomes predictive.

Now very few other marketing tactics can tell a marketer in advance what their customer is thinking of doing. This predictability can be great differentiation and a source of competitive advantage as Google, Amazon, Facebook, Netflix and your local bank have shown.

Benefits of digital marketing

The time-tested mantra for efficient selling has always been “the right message to the right customer at the right frequency”. Digital adds “through the right channel” to it.

The new channels that tech allows access to help marketers to reach their customers at the place and at the time of their choice. Specific to pharma, doctors would always be inaccessible except for the stipulated days and hours at which they chose to meet sales reps.

Today pharma can reach doctors at a place of their choice, at the time of their choosing and through a channel that they most love. It could be a video, an infographic, a webcasted seminar, an email or in some cases a virtual rep. The choice therefore empowers the customer to seek info when he deems fit rather than having it thrust at him.

Of course, this isn’t as easy as is made out to be. To ensure that the doctor ‘consumes’ their content, pharma must make it very relevant and interesting. To make it relevant, they need to know as much about the doctor as possible.

The fundamental shifts in marketing are that it becomes all about the doctor/patient (customer-centric) rather than product-centric; it becomes data-driven (the more pharma knows about the doctor, the better they can serve him) and it focuses on experience (if the doctor finds pharma to be too nosy or the content uninteresting, he simply dumps them). This moves pharma marketing from the ABC – awareness (of the brand), (prescription of the) brand and CRM – to the CDE – customer, data and experience.

How relevant is digital marketing?

Currently, Pharma marketing is all about the ABC – awareness (of the brand), (prescription of the) brand and CRM. This is exactly why pharma hasn’t truly grasped the essence of digital marketing. Digital marketing moves it to the CDE – customer, data and experience. In simple words, this means that marketers must focus less on their product and focus completely on the customer.

In the digital economy there are 3 rules:

  1. Your business is not to sell your product. It is to engage your customer
  2. Your differentiation is not how good your product is. It is how well you know your customer (data)
  3. Your competitive advantage is not the size of sales force, or the number of SKUs you sell. It is the experience that you create for your customer which determines how loyal they stay to you.

Products have stopped to differentiate. Experiences have begun to differentiate. Does this mean that product selling is not important? On the contrary, the CDE of digital marketing only strengthens product sales. Through digital channels, you can engage the customer better. And engaged customers don’t need to be sold to.

Is Pharma Coping?

Pharma was for a long time in denial and even today the odd digitally illiterate executive exists. However, most of the pharma has now moved to the digitally aware phase where the newly initiated are smitten with technology. This explains why there is so much buying/subscribing to tech products and large-scale digitization of internal processes. This is a very important stage of the transformation cycle, but in their excitement, they often forget that success rides on three pillars – people, business models and things. When companies focus on technology (things) they ignore the other two that are the more important pillars.

Pharma will cope soon. After all, it is exactly what it has always wanted to do – engage with customers, ensure relevance of marketing content and ensure spontaneous brand recall. With digital there is a difference – it won’t feel like it is marketing.

 

 

 

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!

Selling in a digital era

Recently I decided to buy a laptop. As I looked around for the right one, I realized how little I knew about hardware. Having always used a company provided one, it was one of the things I had never bothered to educate myself on. As I always do for most things that I know nothing about, I spoke to friends. From what they told me, I did a lot of research online. Armed with information of an ideal laptop, I decided to “look and feel”. I headed off to an electronics store and spent the better part of an hour ‘testing’ a few models with the help of the friendly salesman before I bought the one I wanted. Do most of us shop this way? Maybe!

As you see, in my ‘journey’ the human element came in just once – to seal the deal. With so much information available online, I had already made up my mind before I went into a store and bought what I wanted to. This was a case of laptops and dummies, but is this very different in the case of drugs and doctors?

In such an era, pharma companies invest a significant amount of money into hiring and maintaining large sales forces. This component is, in fact the largest part of a company’s selling expenses. This is driven by the decades-old belief that nothing compares to a salesman calling on a doctor to convince him of a company’s product. Yet, in reality, the idea that reps will soon be obsolete is constantly reinforced by reducing in-clinic time for them, as doctors see lesser and lesser value delivered. There is also the constant pressure on profit margins as companies negotiate a fluid regulatory environment. These factors are as true in India as they are overseas. What is yet to be determined is if ‘non-rep’ models are bust-cycle fads that will reverse in soon to follow boom-cycles?

My personal opinion is that in any selling process, a human element is never obsolete, but the effectiveness of that element is maximized when it is introduced at the most appropriate moment in the ‘customer journey’.

old to new model

It is quite well known that in the new era, 70% of the buying decision is made before the first contact with a supplier is made. By the time I walked into the electronics store, I knew which laptop I wanted to buy, its specifications, its size, color and add-ons. I walked into that store just to see how that laptop actually looked and to understand the deals that the store would offer on my purchase. The salesman at the store already had a ready and willing customer and his sale was efficient and quick even though I made a big show of looking and evaluating other options. The actual amount of time he spent on making the deal was not more than 15 minutes of that hour.

Such efficiency is needed in pharma sales as well since the rep model is currently under stringent evaluation. Companies seeking operational efficiency are critically analyzing all major costs and are looking for alternatives. In such a scenario, instead of considering a ‘no-rep’ model, companies should consider a ‘low-rep’ model. This means downsizing a bulging force to just the optimal number of people needed to quickly and efficiently close deals. An example is illustrated below:

customerjourney

As companies build websites, apps, videos and other digital content, is this a ‘customer journey’ that they have at the back of their minds? Are they willing to prime a customer as much as they can using their formidable online resources and connect a medical rep as the final point of contact to seal the deal? If this is how it can be done, how would the medical rep’s job evolve? What kind of training would such sales forces require?

Of course, this isn’t an easy process. Moving away from a decades-old mindset of building armies of medical reps isn’t going to be easy. And to be sure, such models will probably not be the best in every single situation. For example, a new product launch will require a different strategy compared to a more established brand. The fact of the matter is, evolving technology provides superior alternatives to creating value for customers without having to compromise traditional sales metrics.

I am pretty sure the salesman at the electronics store was half-relieved that I knew what I wanted when I walked in. It saved his time and allowed him to refocus his energy to other dummies who wanted laptops. Wouldn’t drug reps and doctors feel the same way?

 

 

 

SALES or MARKETING – The Customer Doesn’t Care!

Image

Last month, this picture put up by Anup Soans on his Facebook (FB) page elicited 215 ‘likes’, 361 ‘shares’ and 76 comments (as on Dec 2nd). The popularity of this post intrigued me not because it was something that had never happened earlier – Anup is quite popular on social media – but since it quickly assumed an accusatory tone and one of grievance.

Although I have no way to ascertain it, I am sure the cartoonist meant the picture to be something else before another creative person labeled the drummer as the ‘CEO’, the workers on the train cart as ‘head office managers’ and the lone person pulling the train cart with its heavy load of people as the ‘field managers’.  

While the picture is a bit exaggerated, the way it was perceived on the FB post seemed to turn the entire concept of teamwork on its head. Despite a little prodding by the author, not one person looked at this as representing teamwork. It did not occur to anyone that the CEO seemed to be making an effort to keep the functions of the organization (if we assume the train cart to be one) in a smooth rhythm so that efficiency increases – a concept best demonstrated by the famous Kerala boat races. No one thought it was fantastic that all ‘head office managers’ worked as one team towards furthering the objectives of the organization without pushing individual agenda. The red-faced lone ‘field manager’ who pulled the cart didn’t seem to convey to anyone that while it was his job to further the organization towards its planned goal, it could well be a rotating assignment and when he pulled the cart up to a certain point – or goal – he could then hop on board the cart and begin to assist the other ‘head office managers’ with their work while someone on board took up the task of pulling the cart.

I found it very interesting that most people who commented seemed to do so in a pattern. The pattern was that sales and marketing are not two arms of the organization but are different silos. Marketing personnel know little about what sales personnel do and more often than not ‘force’ their ideas on them. A few other gentlemen, who tried to support the marketing function, did so either feebly or their arguments were quickly drowned out. I was reminded of the ongoing social media battle between supporters of two major political parties, which could be understood as that of opposing ideologies and goals. In this case however, sales and marketing people seemed to worry more about which function was better, more important or needed more effort and not on how the picture was a symbol of different functions within the organization working in tandem to help it attain its goal.

The ‘war’ between sales and marketing goes back a long time and spans across industries. However, it is also well documented that this lack of alignment ends up hurting organizational performance. Time and again, both groups stumble (and the organization suffers) because they don’t work together. There is no doubt that, when Sales and Marketing work well together, companies see substantial improvement on important performance metrics: Sales cycles are shorter, market-entry costs go down, and the cost of sales is lower.

As the Harvard Business Review says[1], the conflict between Sales and Marketing apart from being economic, is cultural in nature. This is true in part because the two functions attract different types of people. Marketers are deemed to have more formal education than salespeople. They are expected to be highly analytical, data oriented, and project focused, always thinking about building competitive advantage for the future. Sales teams do not appreciate it as much as they should because they perceive it to happen behind a desk in air-conditioned offices rather than out in the field. Salespeople, in contrast, spend their time talking to existing and potential customers. They’re skilled relationship builders; they’re expected to not only be savvy about customers’ willingness to buy but also intuitively know which products will fly and which will die. They want to keep moving. They’re used to rejection, and it doesn’t depress them. They live for closing a sale. It’s hardly surprising that these two groups of people find it difficult to work well together. Yet there is not a more opportune moment to harness the skills of both teams than the current one.

The pharmaceutical industry in India just hiccupped. From the customer facing side, new regulations such as the new pricing policy has just made medicines more affordable. However, a clamp-down on clinical trials has put the launch of new, innovative medicines on the back-burner for the moment. Also, there is no inflow of foreign capital into the sector putting capital expansion plans of companies on hold. Additionally, more and more Indian companies derive their real growth in earnings from serving overseas markets.

In such a scenario, the last thing a customer would appreciate is a chasm between internal departments in an organization that hamper his ability to provide services to his patients. Corporate equity is at potential risk if information flow on products is delayed because the marketing team does not respond to requests from the sales team or if crucial travel information of a KOL traveling to an international conference is withheld.

While I will not attempt to offer solutions or debate them here, I want to leave you with some thoughts. Why is it so difficult for colleagues within the same organization to work together? Isn’t everyone trying to do the same thing i.e. attain market leadership? How does it matter where you work or what you do? Aren’t you proud of what you are doing? Are we getting into the quicksand of wanting to do someone else’s role? At the risk of sounding preachy, I’d like to invoke the Bhagvad Gita here which extols us to merely do our duty and not worry about someone else. Just excelling at what we do helps us to create great value – tangible and otherwise. Cumulatively, this ever expanding pool of excellence is the fuel that propels organizations from being good to becoming great. So instead of worrying about why others fail, let us continue to focus on our own success.

If the red-faced man in the picture didn’t pull the train cart, how would it move forward? If the men on board didn’t tighten the bolts on the track and pat down the stones of the ballast, how would that section of the track become secure? If the CEO didn’t beat the drum to a rhythm, how would the overall efficiency of the team increase and progress be achieved?

Now if the red-faced man was constantly badgered by the ones on board, would he pull the cart? If he stopped pulling the cart, would the whole team (organization) move? Would the CEO then really matter?

As economic growth continues at its anemic pace, we’re all looking for ways to make our operations more productive. Bridging the sales-vs.-marketing divide is a way of achieving this. Let us change our perspective. It will make a positive impact on customers. We know well that customers these days are too mobile, too connected, and too informed to tolerate any gap between what one department says and another does. So, if we allow sales and marketing to operate in silos, at the end of the day, do you really think the customer cares? He would just move on to the next company.

Published in the December 2013 issue of MedicinMan


[1] ‘Ending the War between Sales and Marketing’: Philip Kotler, Neil Rackham, Suj Krishnaswamy; Harvard Business Review July-August 2006.