Posts Tagged ‘smarter marketing for pharma’

Wrapping Services Around Products: The New Pharma Model

“The home is ultimately going to be the major site of care for all but the sickest patients.”

This from an interview with George Halvorson, CEO of Kaiser Permanente, in which he expounds about healthcare reform and the vertically integrated model that is Kaiser.

Essentially, he’s saying that we will move from the traditional office-centric model to a new approach using technology like e-visits, e-connectivity, remote patient monitoring and smart phone apps to support home-based healthcare. Technology will be the backbone of patient care in a world in which more people are covered by health insurance and there is a shrinking population of primary care physicians

Technology and Patient Empowerment

Halvorson’s remarks suggest that the trends we’re seeing in patient empowerment, like The Quantified Self and websites like Patients Like Me, are all part of a future in which we won’t spend time in a hospital unless we are really sick. And we may actually be spending less time in a doctor’s office, too.

This brings up many questions. What does this mean for prevention? For treatment? How do we use technology to enable people to live healthier lives so that they don’t even need to use the healthcare system? And, ultimately, when we do need the healthcare system, how do we support the home environment to provide for effective treatment?

And what role will pharma play in an integrated healthcare delivery model?

prod serv 2The New Reality for Pharma
This comes back to a theme that I’ve talked about in the past. There is an important role for pharma in this new reality, but it means a change in identity from product manufacturer to healthcare services. Pharma has an opportunity to play a larger role in health services that enhance the value of the products it already provides.

Examples of Products + Services
For example, Google’s basic product, online advertising, provides most of its revenue. But they’ve surrounded it with all kinds of free and interesting analytical, coaching and survey tools. Google offers many of these services for free, like Google Analytics. These aren’t simple “freemium” products, however. They are serious tools. But Google knows that offering them for free enables adoption by the very people they want as customers, thus enhancing the value of their core business.

Brokerage firms make their money on investment products and trading. But they often offer free advisory services and retirement counseling to help clients build retirement models.

Banks are another example. I had a meeting a few weeks ago with a banker who was an also expert in health insurance plans. He had been hired specifically to advise the bank’s clients on innovative health insurance plans and models – advice that I would have had to pay for had I gone to a consultant. But the bank felt this was a service that they should offer their customers, wrapped around the core banking products where they make most of their money.

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The Four Cs of Customer-Centric Marketing Culture, Part II

In the last blog post, I covered the first two Cs of Customer-Centric Marketing for pharma, Commitment and Courage. We need to make a Commitment to building a data and insight culture. This begins to build the foundation of customer understanding. But as we soon discover, not everyone appreciates this level of transparency, even in your own company. We need Courage to counter the various hurdles and vested interests that stand in the way of an open and transparent marketing culture.

4cs2The next step in building customer-centric marketing is to build the technology platform to integrate every customer touch point and marketing tactic. The project involves integrating every sales and marketing tactics into a Relationship Marketing (RM) platform. We call it “RM-enabling” each tactic. This is hard work and requires an investment in new Capabilities.

Capabilities
The job of RM-enabling every tactic to bring customer data and insight back to a centralized database is a simple idea to articulate but it’s complex to execute.

Moving to outside-in, customer-centric marketing will need new RM capabilities. Capabilities is the third C.

Seldom are marketing organizations or traditional agencies equipped to RM-enable every tactic to capture that outside-in insight, and they will need to develop or hire new capabilities to do it.

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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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More Than Half of Doctors Refuse to See Reps

A recent report from ZS Associates affirms a decade-long decline in pharmaceutical rep access to physicians. The reasons are well known: doctors have busier schedules, they’re joining large practices or hospitals with “no-see” policies that prevent reps from coming in, and in many cases doctors simply don’t think it’s worth seeing reps.

Although physicians don’t have time for reps, they do need their content. It’s just that now they would rather get it through digital channels.

There has been an evolution in the role of reps from someone who delivers a promotional reminder to someone who is more experienced and savvy and who serves as an account executive helping to provide doctors with the resources and content they need and want.

It’s no longer just an evolution
But what was once a gradual change is now accelerating. According to ZS, in 2008, 23% of doctors put restrictions on reps; now it’s 49%. Basically, half of the doctors in the United States now have moderate to severe restrictions on rep visits.

What we’re beginning to see is a business model evolution. Driven by technology and economics, the role of the traditional manufacturer’s rep is dying.

How fast will this happen?

diffusionDiffusion of Innovation
We have a tool that can predict what will likely happen. It’s called the Diffusion of Innovation theory. The theory, first published in 1962, outlines how a new idea, innovation or technology becomes diffused throughout society.

The theory addresses the questions around how innovation spreads. How connected is the social system into which this innovation is being introduced? How tightly knit is the social system of users, and how much do they talk to each other?

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Is it Digital Marketing or just Marketing?

In a recent article about the future of pharma, Craig DeLarge was quoted extensively about how to organize a “center of excellence” within a pharma company to ensure it is taking advantage of digital tactics and multi-channel marketing. He sees this as the first step in the process of digital transformation for pharma.

marketing dig ageWhat his remarks drive home is the fact that digital and marketing aren’t separate disciplines. “We are marketing in the digital age,” says Craig. This means that marketing and digital marketing shouldn’t be seen as two separate initiatives or even act in a parent-child relationship. Yet very often that’s what happens as evidenced by the typical marketing budget process.

Marketing in the digital age is still marketing, but technology now enables a custom marketing mix that’s appropriate for our product and our audience. It’s not simply a case of adding a few new online or mobile tactics to the marketing mix. That’s just a recipe for adding more promotional noise, without the benefits that we can get from digital.

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When did Pharma miss the Innovation Pride Parade?

A recent article identified four basic skills that new leadership in pharma needs to be successful in the arena of consumer health. The author, Michael Winter, addresses the topic from his perspective as an executive headhunter, with the expertise and obvious vested interest in helping to find, source and
pride paradeplace talent.

Winter observes that the capabilities, talents and skills that built pharma into the very successful industry sector it has been aren’t necessarily the same attributes that will make pharma successful over the next 5, 10 or 20 years.

“What got us here won’t get us there,” has never been truer than it is in pharma today.

The Skills Needed
The clinical research and development skills needed to produce new drugs will always be critical to pharma’s success, but our approach to the marketplace needs to be rethought and adjusted. The kind of marketing expertise needed in today’s environment has more common with successful consumer goods companies than traditional pharma.

This realization has spawned a growing contest for talent between pharma and consumer goods companies. In some cases pharma is trying to poach senior consumer executives. To be successful, however, pharma needs to first make itself an attractive destination for this type of experienced hire.

Most consumer executives look at an industry like pharma and say, “I don’t know… It looks complicated. It’s a highly regulated industry. They’ve got business model challenges. They’ve got brand issues. I’ve done well on the direct consumer side. Why would I ever leave my successful career here and move over into health? That just seems like a recipe for disaster.” Read Full Article Now »

Expectations on the Rise for Digital Marketing in Pharma

ExpecatationsI’ve begun to observe among our clients a distinct shift in expectations for the role of digital marketing. Even though pharma marketing budgets continue to invest in the traditional channels of television and print, I’m seeing a change in how digital is viewed, and that’s a positive sign.

Smarter Marketing Talent
The caliber of marketing talent in key pharma leadership roles has improved, bringing higher expectations for technology and digital-based marketing. Marketers in both so-called centers of excellence and at the brand level are demanding measurable goals for what technology can be and should be doing for their company and their products. They reward success and fire agencies or technology partners that don’t meet expectations.

The Amazon Effect
Online retail and social media companies have raised the bar of consumer expectations for access to information and the ability to search and buy in a very seamless way. But until recently, consumer expectations didn’t impact pharma. Now, the online consumer experience is raising the bar on healthcare.

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Pharma and its Love of Deal Making. All Good This Time.

3-wayThe recent 3-way deal between GSK, Novartis and Lilly represented a major transaction for all three companies. The deal has been scrutinized by the Street like a master chessboard swap of assets, in this case, molecules. Obviously, it took a fair bit of corporate development work to make these deals happen, so it’s actually pretty impressive from that perspective. But what’s more interesting to me is the strategy that these moves belie. It’s another clue to how pharma is changing.

For the past thirty years, pharma companies rose or fell based on their ability to develop or acquire a drug with blockbuster potential. Sometimes blockbusters just showed up, as did the disappointing blood pressure medication with unusual side effects called Viagra. Or the also-ran cholesterol-lowering drug that was almost cancelled because it would be the fifth drug in its class and that went on to become the largest drug in history. Read Full Article Now »

Publi-com: the whole was less than the sum of its parts

publicom3The dissolution of the Publicis/Omnicom merger
(or was it the Omnicom/Publicis merger?) provides a helpful cautionary tale for all of us. The moral of the story is not that you should decide your CFO or your merger documents before you make the announcement. More fundamentally it’s a question of who your most important stakeholder is.

For many years I taught a business school class on CRM, and one of my observations was that the center of gravity for successful entrepreneurial companies was always the customer. No customer value, no company. But as firms got larger, the center of gravity gradually moved internal because of the many pressing organizational needs. Mergers and acquisitions are particularly distracting, to the point that many corporate managers never even interact with customers. Read Full Article Now »

Is pharma doubling down on TV? Really?

The data is out on consumer ad spending in 2013. It wasn’t a surprise that TV and magazine ad spending was down significantly while digital spend was up. If you own a TV network, you can’t ignore the handwriting on the wall. You feel the pain.TV.jpg

Unless you are selling to pharma.

It appears that pharma is trying to single-handedly bail out traditional media. Pharma’s TV ad spending was up more than 12% last year, and magazines were up more than 6%. And digital? The channel to which every other industry is moving their spend?

For pharma, digital spend was down more than 14%…

The total pharma DTC spend last year was $3.8 billion, and of that, it spent about $60 million on digital ads last year. That doesn’t even qualify as a rounding error. Of the top 20 pharma brands, 16 didn’t even spend more than $1MM on digital advertising.

I’m left scratching my head. Why the heck is pharma bucking the global trend to digital? Does it know something the rest of us have missed?

I have a couple thoughts on this trend. First, I have to give props to TV and magazine sales executives. Obviously, they haven’t surrendered to digital, at least among their pharma clients. They make the argument that cable TV allows for better targeting, an attractive argument for brands that are trying to reach a mass audience.

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