Omer Demiray

has been undergoing significant changes due to the increasing role of digital technologies. Digital channels, such as remote detailing through email and phone, product websites, HCP-portals, and social networks are gradually supporting and even replacing traditional channels, including face-to-face interactions with healthcare professionals through field forces. Most pharma companies are striving to adapt to the ever-evolving environment by implementing multiple digital channels to reach their customers. But how aware and successful are the companies in reality in multi-channel management (MCM)?

		We prefer the term “multi-channel management” to the more common usage of “multi-channel marketing” to signify that true MCM goes beyond marketing to include sales and other functional areas. The full range of MCM practices are shown in Fig. 1.

		To understand the status quo of MCM in the pharma industry and determine the critical success factors that differentiate the more successful companies from the less successful ones, Homburg & Partner conducted an online survey with managers in various departments of national and international pharma companies located in Germany in October 2014.

		The pharma industry is a global sector dominated by large multinational companies. Similar to USA, tablet e-detailing, pharma-owned websites and email marketing are the most preferred channels by pharma companies in Germany. However, only a few differences are seen on a single-channel level, such as German physicians’ lower affinity for social media channels or tendency to use independent digital channels not financed by the pharma industry. One other difference is that measuring the success of multi-channel campaigns is more difficult in Germany due to the unavailability of prescription data on the physician level. However, our contention is that these differences are relatively minor given the scope of our survey.

		The survey consisted of 86 multiple choice and short text questions with an average duration of 10 minutes. Participants were asked to answer questions regarding the multi-channel preferences and settings in their companies. A total of 29 managers took part in the survey, 79% of them representing multinational Big Pharma companies. Fifty-five percent of the participants identified themselves within the primary care and the remainder in specialty care. More than 50% of the participants occupy either CEO, Head of Marketing and Multi-Channel Management positions in their companies.

		Based on self-assessment and the use of some “hidden” questions (which reveal a status without explicitly asking for it), the participating companies were classified as “more successful” and “less successful” companies in MCM through splitting the top and bottom 30% based on their answers to hidden success questions in the questionnaire. This split was used to determine the MCM “success factors.”

		The four main stages of MCM were identified first. These are: prerequisites, strategy, implementation and monitoring. According to the survey results, it was determined that successful companies are much better positioned in all stages of MCM.

		Successful companies assign the right people with appropriate skills in MCM and trust in their abilities. It was found that there is a direct correlation between experience in MCM (>3 years) and success. Companies involved in MCM for a longer period believe to have more skilled and successful employees in MCM. Furthermore, survey results interestingly showed that managers in primary care rated the skills of their employees higher than their colleagues in specialty care.

		Consistent with the superior skills of their employees in MCM, successful companies also have a management team that actively deals with MCM, are familiar with up-to-date digital channels and consider MCM as an important topic in the organization. Once again, managers in primary care trust in the MCM skills of their management team more than their colleagues in specialty care do.

		Another important prerequisite for successful MCM is a suitable organizational structure. It was found that all of the successful companies had a central and higher-ranking MCM department led by an ex-MCM, marketing or sales manager. These companies assign sufficient budget to their MCM departments and support them by making significant investments in the implementation of required MCM activities.

		Successful companies started their initiatives regarding new digital channels proactively, in order to reach a competitive differentiation instead of a reactive approach based on their competitors’ actions. Another important trigger for launching MCM activities is cost reduction.

		These companies started their MCM activities with a clearly defined and recorded MCM strategy, mostly positioned on the business unit level, less usually on a company or product level. Furthermore, their actions in implementing MCM are a result of strategy instead of opportunity, which are tracked through clearly defined MCM key performance indicators (KPIs).

		Today’s goals for using digital channels include broader customer coverage and higher contact frequency, optimization of customers’ needs, and cost savings. Successful companies differentiate themselves as a result of their management boards’ and employees’ awareness of the companies’ goals through MCM. This is clearer at a management level and in small-sized companies compared to Big Pharma. At successful companies, 67% of respondents agree that “our company places sufficiently high importance on MCM;” while only 13% of respondents at the less successful companies agree with that statement.

		Optimal change management and the integration of the sales team in MCM is a critical success factor. More successful companies plan internal trainings for their employees and ensure the involvement of their sales department in the design and conception of digital activities. Although this conclusion was reached through the statements of the participating companies, these companies also believe that, in general, their employees do not receive sufficient training for using new channels.

		Successful companies have a clearer understanding of which channels to use, when and how to use them, and generally have greater knowledge concerning the channel preferences of their customers, even though they do not implement the initiatives based on individual physician preferences. They test new channels before rollout and have the courage to stop the unsuccessful initiatives.

		Interestingly, only 56% of “successful” respondents agree that their companies budget sufficient resources for MCM activities (at less successful companies, this goes down to zero). Also, there appears to be no significant difference between Big Pharma and the rest regarding budgeting; nor is there a difference between primary care and specialty care.

		Optimal channel coordination is another requirement for the successful implementation of multi-channel campaigns. Even so, only 56% of respondents at “successful” companies note that the sales function is sufficiently involved in development of digital offerings (and zero at the less successful ones); the lack of coordination between sales and multi-channel efforts is widely recognized in the industry.

		More successful companies have a strong connection between their MCM department and the relevant stakeholders, as was observed in companies that defined a professional and sustainable MCM strategy. Furthermore, they define their campaigns as multi-channel campaigns in the first place and involve the relevant stakeholders in the implementation phase.

		Similar to other marketing and sales activities of the companies, multi-channel campaigns must also be monitored and their performance should be measured and assessed. Successful companies accomplish these through setting KPIs and tracking the performance of both individual digital offerings and general multi-channel campaigns. According to the survey, click rates, amount of time spent by the customer on MCM and the coverage are the most commonly named KPIs for digital offers. On the other hand, customer satisfaction, return on investment and customer coverage are counted as the most important KPIs for general multi-channel campaigns.

		Success in MCM has several indicators, such as high ROI, lower marketing costs, high customer coverage and satisfaction, optimization of internal processes, etc. However, in an anonymous study such as this, it is impossible to directly measure and compare these success factors. For this reason, we applied the “self-assessment” method to measure company success in MCM based on four “hidden success questions” in the survey, each corresponding to different stages of MCM—prerequisites, strategy, implementation and measuring. Although self-reported data may be biased, we have experienced in previous studies that self-assessment is a quite reliable method and almost as accurate as objective results. Accordingly, there is actually a high correlation between self-reported data and actual performance. For example, in the field of financial performance data, this correlation was found to be around or sometimes even higher than 0.7.

	In all four stages of MCM, more successful companies are outperforming less successful companies by taking measures aligned with the critical success factors (Fig. 2). Even though the use of digital channels is becoming more and more common in the German pharmaceutical industry, results of the survey further reveal that there is still room for development regarding MCM, especially in defining the right MCM strategy and goals, and monitoring the implemented multi-channel campaigns. Most of the participants state that their employees are not trained enough on MCM, that a clear MCM vision and strategy is missing and that controlling of multi-channel campaigns is not professional and accurate enough in their companies. All of these findings show us that pharma companies have to further adapt MCM and focus on the mentioned fields of development to succeed in the competitive, dynamic and rapidly changing pharma market.

Dr. Matthias Staritz is a partner in the Competence Center Healthcare at Homburg & Partner, specializing in pharma and medical devices. He counsels his clients of the pharmaceutical and medical technology industry in the fields of strategic marketing/market strategy, sales, pricing and implementation-oriented market research.

Ömer Demiray is a consultant in the Competence Center Healthcare at Homburg & Partner with previous pharmaceutical industry experience. His expertise includes strategic marketing, sales force effectiveness, key account management, customer and market segmentation, and pricing strategies in pharma.

) is an internationally operating management consultancy focusing on Market Strategy, and Sales & Pricing. It was founded by the renowned marketing expert Prof. Christian Homburg in 1997.

Articles

Survey shows that most digital channels are still experiments with little oversight or follow-through