Posts Tagged ‘pharma innovation’

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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Making Pharma “Fit for Purpose”

While in London recently for a series of meetings, I repeatedly heard the English phrase “fit for purpose.” It’s become a cliche for many in England, but I was struck by its syllabic crispness and brevity.

DarwinThe idea of “fit” makes me think of Charles Darwin’s theory of “survival of the fittest.” The fittest are those who are best able to adapt to changing environments, or in the case of a business, a changing market. Successful companies survive, transition, evolve, exploit and pivot over time. They are fit for purpose.

It is not the strongest of the species that survives, or the most intelligent. It is the one that is most responsive to change.

Motorola as a cautionary tale
Recently, there was media coverage about how Motorola has essentially died. It was slowly broken into pieces and sold off to various other companies. Google bought its cellphone business, Motorola Motions, for $12 billion a few years ago, and just unloaded it to Chinese PC manufacturer Lenovo for $2 billion. Ouch.

At one point in time, Motorola owned 60-70% of the cellphone market, had 150,000 employees and was one of the leading tech innovators in the world. They’re the ones who brought the mobile phone to the masses. They invented the police radio. They invented the car radio. They commercialized independent satellite communication.

There was a lengthy period of time during which everyone would have assumed that Motorola would be around forever. Until they weren’t.

There was an era when Motorola was fit for purpose. Until it wasn’t.

Motorola was a product company with a legacy of good R&D and solid commercialization, but they lost touch with what customers wanted. It’s an important cautionary tale for all of us.

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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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Pharma and its Innovator’s Dilemma

A recent conversation with a friend in the pharma industry validated my thoughts and concerns about the systemic challenges that pharma is facing. The pivotal insight came from my friend’s comment that he wants his next job to be “not just about pills,” but a job that takes on a broader role in healthcare, one that’s more focused on patient outcomes.

This personal revelation was a bit surprising given the fact that my friend’s entire career has been pharma marketing. Promoting drugs is his area of expertise. So why did it take a career “transition” phase to bring about this personal commitment to the need to broaden pharma’s mandate?

innovation highwayWhy not innovation?
The challenges and obstacles that senior-level pharma executives face are extraordinary, especially when it comes to innovation and moving the industry forward. Pressure from Wall Street, business partners and investors who are focused on revenue growth and short-term profitability makes it incredibly difficult for top executives to think outside the box or consider what’s next for the industry or their company.

Every day, pharmaceutical companies large and small are managed to meet performance and revenue expectations. My friend observed first hand how even the long-term planning process (5 to 10 year horizon) doesn’t give senior executives the flexibility to discover and engage in innovative opportunities that might allow them to consider new offerings or business models.

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