Pratap Khedkar, ZS Associates

A handful of factors have fueled the importance of multichannel marketing (MCM) in the pharmaceutical industry: a steady decline in physician access (only 55% of prescribers included in the most recent ZS AccessMonitor report were considered readily accessible to sales representatives in 2013, compared to more than 75% in 2008), a shift in physician preferences (there is a 2-to-1 trend toward online “pull” information and away from rep “push” channels) and a focus on cost effectiveness and “frugal” innovation.

		Even as most pharmacos are experimenting with MCM, a few different circumstances have meant that the process has not been smooth for many. For one, the corporate strategy and support of this shift toward MCM remains unclear for many companies. The reluctance to invest in strategies with unproven return on investment (ROI) or a lack of scale and resistance from the corporate legal department also serve as barriers to implementing a thoughtful multichannel marketing program today. The future may compound these issues further due to a lack of alignment between sales and marketing, uncoordinated channel management and fragmented channel data.

		MCM has also suffered from a lack of a distinct definition. For some, merely adding email capability to a rep’s communication with physicians magically becomes “MCM.” In most cases, the effort involves some means of coordinating interactions that physicians (or patients) have with both reps and with manufacturer-sourced resources such as banner advertising, call centers, online sample ordering, social media conversations—the list is proliferating (see box) and, we would argue, getting out of control.

		Additionally, the customers’ business models are changing. Fifty-three percent of physicians do not expect to continue their practice as they do now, and providers and payers are integrating at an accelerated pace even in commercial sectors not affected by government intervention.

		However, the biggest shift in mindset needed is in the concept of MCM itself. It is not about multiple channels, but about finding ways to succeed with the customer. Before we proliferate channels, we must first adopt a customer-centric mindset and allow this change to dictate what we create and how we communicate.

Building a CCM capability. Credit: ZS Associates

			What is customer centricity? It is NOT customer focus—we have plenty of that in the industry. Targeting a customer with weekly rep calls and repeating the same message, for example, demonstrates a high focus on the customer, but it is not customer-centric at all. Customer Centric Marketing (CCM) means putting yourself in the customer’s shoes with everything you have in the value proposition, the content, the communication and the channels you use. You must look at your relationship with the customer from your customer’s perspective. Ask, “Would I, the customer, find any added value in this offer and interaction? Would the relationship be aligned with what I want to achieve?” This applies to all customers&mdash;not just patients and prescribers, but payers and providers as well.

		One part of being customer-centric is creating specific solutions—products with value to meet unmet needs. Examples of broader unmet needs include a physician’s need to manage his or her practice financially, or keep current on the latest medical developments. For a provider, there may be internal quality metrics needed for accreditation, such as meaningful use in adopting electronic health systems. However, value propositions still must be communicated effectively, and a key element of customer centricity is focusing on the communication of value through interactions.

		While this may seem like a foregone conclusion, a challenge has been that the pharma industry has always been very brand-centric. The average branded drug costs nearly a billion dollars to bring to market, and the company is under pressure to maximize the drug’s sales in the remaining window. So, a brand focus helps maximize the number of customers the pharma company captures. Customer centricity, on the other hand, challenges pharmaceutical companies to maximize customer value for each customer it serves—across all the brands and other services the company could offer.

		Even in interactions, we think more is better. The industry has historically focused on the frequency of interactions and has taken this mentality to the new channels introduced. So even as we try to shift to quality interactions using multiple channels, we don’t keep track of the quantity. Do you know how many times your company touches your customer? In one case, ZS has found that the top 5% of physicians of a client company were averaging more than 120 “touches” annually across all brands and channels, so the problem of quantity and coordination is fairly widespread. The mindset that we must have saturation to have a good relationship is a legacy of the traditional sales force model.

		Another mental barrier to conquer is the idea that instead of the pharmaco controlling reach and frequency of interactions with the customer, it is now up to the customer to decide. The decision to engage remains at the customer’s discretion, not the pharmaco’s. So pharmacos must switch from the familiar push-based model that we know and create a buffet or a menu of options that the customer can pull from. Not only is this more effort and more money, but even if you build it, they may not come. This higher risk and expense deters many.

		On the organizational side, there is always the divide between sales and marketing. In order to scale the dozens of new channels and offers being created, it will be key to include sales representatives within MCM to get to CCM, but not many are willing to embrace this. There is also a within-marketing divide—people on a brand team own channels, not customers, which further inhibits the move from channel-centric to customer-centric. And there may be conflict between brands that would like to appeal to the same customer, and customer centricity may dictate all brands not be treated equally.

So how should pharma become customer-centric?

		1. Design for the play—not the player. Avoid focusing solely on the physician, patient, practice, provider or payer. Instead, be mindful of all of them working together. The system of interactions, not just one player, will provide the opportunity.

		2. Stop looking for the silver bullet. There are 30—50 channels once you decide to go multichannel (see box). Stop asking which ones are the best or looking for the silver bullet. Instead, choose the menu or buffet picture. No one expects all customers to converge on the one best dish. Rather, it is the choice and combination of channels that are key. Get a good understanding of customer preference and affinity if you want to be successful—advanced Big Data analytics can do that now.

		3. Keep score by yardage, not touchdowns. Don’t just focus on Rx (the ultimate success measure), but on all the intermediate tactics and measures that will help you reach your goal. One big change involved is modifying the way we do analytics. Are customer measures a part of your metrics?  How do they engage? Does it translate into a good experience and are the channels working in synergy and moving customers along on their journey? These questions can be answered with data available today. Further, as the debate shifts away from ROI to scale, a pertinent question to ask is, “How do we do this for as many customers as possible, and not just make money off of the few customers that are willing to engage with us on our terms?”

		4. Move from a “rep vs. the alternatives” to a rep as an orchestrator of the alternatives. The temptation with MCM is to introduce many channels as a substitution for the rep. For the long tail (low deciles) of physicians, this works well because the rep should not be going in there. For the other segments, we need to mix traditional channels with new channels to get scale. On average, email open rates increase from 3% to 35% if the email is sent by the doctor’s sales rep.

		Pharmaceutical companies must prepare for a bumpy journey to the inevitable—transitioning from a multichannel mindset to one that is customer centric is no longer just nice to have, but is an imperative because customers have changed. We must change with them.

		Pratap Khedkar is a managing principal at global consulting firm ZS Associates and leader of the firm’s pharmaceuticals practice. During his 20 years of consulting experience and 14 years serving the pharmaceutical industry, Pratap has counseled clients in areas such as multichannel marketing, marketing mix, promotion response measurement, managed care issues, sales force strategy and incentive compensation.

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