Archive for the ‘Global Pharma Marketing’ Category

Pharma Marketing: What’s the difference between Customer Insight and Customer Intelligence?

When a business idea makes the cover of Harvard Business Review, McKinsey Quarterly, and the Nottingham City Council website, you can bet it’s become a buzzword. Analytics-driven “customer insight” has become ubiquitous from business schools to board rooms.

While it’s certainly true that consumer insight will change the way an organization builds its business and customer strategies, there are limits to its operational effectiveness.

In reality, no organization can manage new “insights” every day, every week or even every month, because then they’d be reevaluating their product mix, business focus, target customer and marketing communications all the time, which besides being impractical would obviously be silly.

Insights that emerge from data are valuable to setting organizational and market strategy. This is the value of companies like ZS Associates and IMS Health that create annual or biannual studies for territory alignment or for refreshing a decile analysis for the pharmaceutical industry.

But I would argue that an equally valuable capability is operational decision support, supported by what could be called “customer intelligence.”

Insight v IntelInsight is episodic, but decision support is ongoing
Insight-driven goals and metrics are developed for how a product, given certain business assumptions, should perform in the marketplace. Insights are distilled from market and customer data.

Insight is used to achieve differentiation. It’s critical to defining and creating value. Insight, I would suggest, is at the segment or persona level. But once the marketing strategy is determined and we know where we’re going, what our product is and who our target audience is, then customer acquisition and activation becomes the focus, driven by individual customer intelligence.

Customer intelligence is an operationalized decision support process at the individual and segment customer level. It determines messaging, targeting, channel and pacing for all of the practical weekly and monthly marketing campaign decisions.

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Filling the Digital Gap for Pharma

Whenever there is a major paradigm shift in business, there is both a capability and a capacity gap.capacity 2 Rarely do companies have the right people, and enough of them, to fulfill the demands of a new business environment.

This is particularly true of digital marketing for pharma. Pharma management is looking to marketing to build the necessary digital channels to deliver content to healthcare professionals and patients. But marketing is experiencing digital capability and capacity gaps.

Capability: “Do we have the right people to do the work?”
Capacity: “Do we have enough of the right people to do the job?”

Most digital Centers of Excellence (COE) or centralized pharma marketing operations groups are lacking in one or both.

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The 3 Questions that Data Should Answer for Successful Pharma Marketing

In a recent posting I introduced the idea of a “master data vortex.” The one place where we gather enough data from enough customer activities to derive truly actionable insight.

If we’re only looking at one set of tactics, we’re only seeing one set of behaviors and attitudes about that channel. But what we really need is a data vortex that can suck in everything. Multiple streams of behavioral and activity data will deliver a much better representation of our customer’s DNA.

Marketing Analytics
Once we have that the data, we move on to the next step, marketing analytics. This is when we start to make informed choices. Decisions about budget investment and channel selection. Choices about how we should talk to customers, what messages to send them, and what we’re asking them to do.

At closerlook, we’ve been building a set of robust insight and analytics tools that ride on top of our “master vortex.” These tools allow us to look at a customer across all marketing channels to try to understand them better.

Who What WhenThree Questions
At the heart of the matter, all this activity focuses on answering three basic questions about our healthcare audience: Who cares? What do they care about? And when do they need to know?

Who Cares?
When we look at a population of physicians, the first question we need to ask is, “Who cares about our product?” And it’s not going to be everybody. This runs counter to the traditional marketing assumption. “If these doctors have patients that are sick with our kind of disease, then of course they’re going to care about our product.”

The reality is that not everyone does care. A physician may feel a product is too new, too redundant to what is already in the market, or too expensive. Maybe it’s a new class of drugs for which the physician was never trained. Or maybe the physician just feels a particular loyalty to a competitive product. It almost doesn’t matter. The first job of any true marketing analytics platform is to distill the entire population down to those who DO care.

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Building A Master Data Vortex for Pharma

Nothing powers measurement, intelligence and insight like data.

But what kinds of data, you might ask?

In the past, the “data” that fed customer insight and marketing strategy was usually based on gut instinct, with market research used to justify the final decision.

Gut instinct
Now there’s nothing wrong with gut instinct, especially when it’s based on years of experience in a consumer category that doesn’t change much over the years. But in an industry like healthcare that’s evolving at such a rapid rate, deciding with one’s gut is as likely to lead to irritable bowels as to true customer intelligence.

Gut instinct is a poor tool for measuring success, providing customer intelligence and distilling insight.

Another typical source of customer data has been the quarterly, episodic trend reports from the usual research consulting firms. But that means that the insight is often too little too late.

VortexWhat is needed today is continuous monitoring of our market and our customers and comprehensive reporting across every customer touch point. And to do that, we need a single centralized master database. I like to think of it as a “master data vortex.” That giant sucking sound? It’s the vortex pulling in every piece of data we can – sales and marketing – so that we have the basis for doing near real-time evidence-based analytics.

Single source of truth
Having a single destination for both personal and non-personal customer communications means there will be a single “source of truth” about which channels and messages are working against which segments. This becomes a rich asset that most brand marketers still dream about.

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Pharma…at the moment of truth

There is a moment of truth between a doctor and patient when a diagnosis is made and a treatment regimen is determined. It might be a routine ailment with a simple standard of care protocol. Or it could be a complex or difficult diagnosis that leads to referrals, more testing, and life-changing decisions about life style and treatment options.

But in either case, it’s a moment of truth that summons the best analysis from the professional and the most transparency from the patient.

Given how complicated and busy the typical physician’s schedule has become, it’s unlikely that most doctors will have convenient and timely access to the latest in clinical research or knowledge of the newest therapies. There are valuable tools for quick reference of drug interactions, but getting access to relevant content like the pathophysiology or mechanism of action behind a new class of drugs takes more time.

Could pharma be a resource? Manifesto 4

Could pharma help HCPs help patients at the moment of truth?

Yes, but only if pharma rethinks its brand and value proposition.

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Digital Marketing for Pharma: Just Do It

I don’t want to be overly skeptical about the role of innovation in pharma, particularly in the digital marketing space. But a couple of experiences in the last few weeks have led me to wonder whether, a few outstanding individuals and companies notwithstanding, most of pharma will never really build that capability in-house.

Increasingly, what I’m hearing from pharma is, “I just need someone to do it for me.”

bell curve 3aA simple bell curve helps to paint the picture.

Where do you fall on the curve?
On the left hand side of the curve is a very small minority of digitally savvy marketers who know what they’re doing. That’s labeled, “I’ll do it.” The big hump of the curve, where most pharma marketers are, is labeled, “You do it.” At the trailing end of the curve is the “Do what?” segment, the laggards – those who haven’t even figured out the impact of digital marketing. They’ve heard about it, maybe they’ve done a couple of one-off projects, but they still don’t recognize that digital needs to be core to their strategy.

Most of the digital pharma marketing conferences and trade magazines champion those on the left hand side of the bell curve – the minority of marketers who get digital and are willing to experiment and try things. They have been given a budget to prove out digital – senior management has given them some rope to see if they will either make something happen or hang themselves.

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Drug Pricing Goes Political

It was a cold February 2010. The winter of Obamacare. There was active opposition from Republicans, the Democrats had lost a pivotal Senate seat in Massachusetts after the death of Edward Kennedy, and there was increasing ambivalence by the general public around President Obama’s healthcare proposal.

Even within the administration itself, people were saying, “Let’s move on, let’s move on, healthcare reform is dead, dead DEAD.”

Then, WellPoint happened.
In early February, WellPoint’s subsidiary Anthem Blue Cross Blue Shield announced it was raising insurance premiums on individual policies in California and Indiana by 39%, with price increases expected in nine other states as well.

There was a firestorm of reactions. Health and Human Services Secretary Kathleen Sebelius wrote a letter to the president of Anthem voicing serious concerns about the increases. Wellpoint’s CEO Angela Braly was forced to testify before Congress.

And suddenly, healthcare reform was back on the front burner. WellPoint couldn’t have chosen a worse time to raise its prices. If it had waited even six more months, it’s very possible that healthcare reform would have faded away for lack of interest and urgency.

But instead, WellPoint handed Obama a public relations coup. Very quickly, WellPoint became exhibit A in the court of public opinion arguing that the health insurance industry was unfairly profiteering.

It was a watershed moment. A WellPoint Moment.

Overnight, media outlets, editorial boards, social media, and politicians were demanding health insurance reform. Republicans were back on their heels. Democrats were able to seize the moral high ground and they passed the reform bill on March 21, 2010 which was then signed into law by the President late that night.

Barely a month after it seemed like healthcare reform was dead, WellPoint’s move on pricing became the political catalyst for historic changes that are still being felt today.

Drug PricingIs this pharma’s WellPoint Moment?
Last year there was an uproar over Gilead’s pricing on Sovaldi for Hepatitis C. Economic pushback from insurance companies and PBMs along with new competitive alternatives, however, forced Gilead to negotiate discounts. The issue slipped off the front page.

Then the young and brash Martin Shkreli, CEO of Turing Pharmaceutical, jacked up the price of a generic drug by over 5,000%. Shkreli couldn’t have chosen a worse time.

Election cycle candidates, both Republicans and Democrats, began calling for price reforms and/or pricing limits. Reporters began looking at other recent drug price increases. Valeant was served two federal subpoenas related to its pricing.

For those in pharma who may have hoped this issue would fade away like last time, their hopes were in vain. It was a hot topic in the recent primary debates, and Hillary Clinton has recently called on the FDA to accelerate approval of generic competitors and asked the FTC to investigate what she called “anti-competitive price gouging.”

This may be a WellPoint Moment for pharma.

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Big Pharma Makes Moves To Manage Disruption

What I liked most about a recent HBR article was what wasn’t mentioned.

The recent Harvard Business Review article, “How Merck is Trying to Keep Disrupters at Bay,” is all about disruption, and anyone who reads HBR on a regular basis knows that anything written about industry disruption or disrupters owes at least a tip of their hat to Clayton Christensen.

Christensen, a Harvard professor, has written extensively about disruption, innovators and the innovator’s dilemma, highlighting the fact that most large companies, including pharmaceutical companies, are not great at innovation or staying nimble enough to respond to changing customer needs and expectations.

Often it’s the small startup companies who aren’t respected by big companies that wind up disrupting the marketplace. They upend the value proposition in the marketplace, and by the time large and established companies can see what’s happening, they’ve lost market share – or maybe even the entire market.

I think it’s interesting and very compelling that Merck – a large and established company – recognizes this threat and is trying to work from both the inside-out and the outside-in to keep disrupters at bay.

babarThe HBR authors reference another large company, IBM, and how it essentially remade itself 20 years ago under the leadership of Louis Gerstner, who wrote his own best-selling book, “Who Says Elephants Can’t Dance?” on the IBM journey.

The way Merck is doing it really impresses me. Merck recognizes that as a firm it already has certain core attributes, capabilities and priorities that it isn’t going to throw out. But by creating an internal Emerging Businesses (EB) group, it’s also inviting a high level of innovation.

Merck has tasked this small group to look outside the firm, but also, and more importantly, within the firm for new ideas for both products and services. EB created a Strategy & Innovation Council to identify and scale new internal initiatives and a Global Health Innovation Fund to find external partnerships.

Fundamentally, Merck is a products firm. They’re a drug manufacturer, but they recognize that innovation extends beyond new Rx products and into the entire customer experience, which can include other revenue opportunities like services and technology.

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The Two-Edged Sword of Healthcare Reform for Pharma

The Economist recently published a report on the cost impact of healthcare reform in the US.

Healthcare Spending TrendsThe data shows that the fundamental idea of bending the cost curve by changing the way healthcare is reimbursed — moving from a fee-for-service to a fee-for-outcomes — is actually working. Hospitals are actually doing fewer unnecessary tests than they previously did. According to the report, before Obamacare, hospitals did as many tests and procedures as they could, because that’s how they made money.

Now that the focus is on patient outcomes —  keeping patients out of the hospital and feeling better after they’ve been discharged — costs are going down. Bundled payments for procedures is limiting out-of-control expense growth.

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Three pharma trends from the 2015 J.P. Morgan Healthcare Conference

I attended the J.P. Morgan Annual Healthcare Conference a few weeks ago. Think of it as the CEO version of SXSW for all things big pharma, biotech, health insurance, health tech and large healthcare providers. In four days you drink a fire hose of 30-minute reports from CEOs and their CFOs that together paint a detailed portrait of the financial and scientific outlook of the industry. (i.e., many “forward-looking statements.”)

JPMThe Solvadi Effect
As I was listening to the executive presentations, I began to pick up on three important trends. First and perhaps most importantly, I sensed that the industry is really committed to finding cures. Call it the Solvadi Effect.

Historically, the objective has always been to delay death, but now everyone seems inspired by the power of Gilead Science’s new product to cure hepatitis C. This is a much better clinical outcome than the generic alternatives with their nasty side-effects. Pharma leadership, particularly biotech executives, used the conference venue to declare their commitment to finding cures for diseases, with special attention placed on Alzheimer’s, Parkinson’s, MS and hepatitis.

Business Model Flip
One reimbursement policy implication is that over the next 5 to 10 years we could potentially see the pharma/healthcare business model flip from delivering moderately priced drugs that chronically-ill patients take for the rest of their life to a new model in which therapies might cure a disease in a short period of time, but with a very high price tag. For example, the business and social contract is already changing from supplying a generic drug that someone with hepatitis C would take for the rest of their life to a drug can cure the patient in 12 weeks, but will cost $86,000.

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