Best practice and benchmarking are buzzwords in pharma marketing effectiveness, but the whole idea is flawed and the magic word should be contingency.

In a discussion on marketing effectiveness in any pharma company, it won't be long until the words best practice and benchmark are mentioned. The idea of comparing with, and copying, the best companies is one that has become embedded in many marketing departments. It is easy to see the attraction; borrow the best thinking from another pharma company, add your own inspired touches to it and you cannot help but beat the competition. However, the whole idea is fundamentally flawed. Management research is full of examples of benchmarking and best practice failing in the short term and, in the longer term, preventing new ideas emerging. That is not to say there is no value in watching what other companies do, but to extract that value you have to understand the theory behind why mimicry fails as well as the science of copying correctly. 

Companies need to understand that benchmarking, best practice and other forms of imitation are flawed methods for three fundamental reasons that are, with hindsight, obvious. 

First, businesses copy things that they think are successful, but how do they know that what they are copying caused the success? Social media, to take a current fad, may be associated with some successful campaigns, but correlation is not the same as causation. The successful campaign may have been due to any number of reasons, ranging from a great sales team to a competitor's chance quality problem. Before admiring something that seems to work, make sure that it did work or you could find yourself copying something that actually detracted from, rather than contributed to, the success your business seeks. 

Second, a business may think it is emulating what a rival or exemplar did, but it is very unlikely to have the whole picture. Complementarity is a hallmark of the most effective marketing strategies, meaning that they work because several, sometimes many, activities worked together to produce a result that was greater than the sum of its parts. The press campaign is highly visible and market intelligence may tell you about detailing activity. Exhibition stands can be photographed and analysed. Product claims are, of course, public knowledge, but what cannot be seen easily is the way these interconnect; how the product claims arose from a careful strategic positioning, which fed into the advertising, the leads from which were carefully co-ordinated with sales team activity and exhibition programmes. Looking from the outside, it is very easy to see what is visible and duplicate what can be seen, but this partial, incomplete impersonation will not get the same results as the original. 

The third and final flaw in best practice is that it neglects context and, in marketing strategy, context is everything. A company can mirror the high-impact aggressive style of another brand's promotion, hoping to get the same recall and response, but if its brand has different, softer values or the target market has contrasting, more sensitive attitudes, then the results may be just the opposite of what it wanted. 

For these three reasons – causation, complementarity and context, the whole idea of there being a single best practice that is the panacea to marketing challenges is, quite simply, wrong. Of course, this begs the question of why the idea is so deeply embedded in some companies' cultures. There must be a reason why these phrases occur so often and so quickly. There are reasons; the smoke does have a fire, but the fire is not hard evidence of good practice getting good results. 

There are also three other, less happy, reasons. The first is that humans are social animals and like to get the approval of peers and to go with the grain. There are ways of describing the few who do not: square peg, troublemaker, not a team player. This sociality makes people follow trends, even without good evidence that that is the right thing to do. 

The second reason is that following best practice is easy and, in a pressured environment, saves time in the short run. As Henry Ford famously said, thinking is the hardest work there is, which is why so little of it is done. 

The third and final reason that the best practice idea is so contagious is the most widespread of all. So-called best practice is spread mostly by consultants who, by codifying one way of doing things and packaging it up into a process, can sell the same thing to lots of people. Moreover, the packaged product can be delivered by relatively low-level, inexperienced, and therefore cheap, junior consultants, helpfully inflating the project profit margin. 

There is value in watching what other companies do and to extract that value companies need to understand some theory. Since the time of Scottish philosopher Adam Smith in 1776 it has been known that organisations work by combining task-specialisation with cross-functional co-ordination. Businesses have known even longer that firms succeed when what they do fits the market and they fail when the market changes and they do not adapt. Put those two ideas together, add about 50 years of management research and the result is a body of knowledge called contingency theory. In short, this means that what works is what fits. More accurately, a marketing strategy or any other business process works when it fits the external market situation and the internal, company situation. In pharma companies, if a process works well it will inevitably show evidence of having been adapted to the internal and external environments.

Contingency theory is a tool that helps businesses copy what they should, ignore what they should not and, critically, tell the difference between the two. For example, a rival pharma company changes an important part of its business model, such as firing its primary care sales team and recruiting a handful of key account managers (KAMs) trained to focus on payers, not prescribers. It works well and the market research data shows that its brand leapt up in market share. The manager of another company, who has heard little more than snippets of this story but is under pressure to cut the sales force expenditure, thinks KAM is the way to go. Before taking action, he should use the theory. First, is the correlation causation? Or was there another reason that this brand enjoyed a sudden blip? A compelling new piece of clinical data? A KOL presentation at a key conference? The other brand ran out of stock? Assuming nothing else explains the blip, he should look for complementarity. What else did the other company do at the same time as KAM? He should invite in one of the KAMs for interview, praise his performance and let him talk too much. As he talks, the interviewer should look for the connections in their strategy. If the blip is still unexplained and KAM looks like it really was behind the success in this case, then it is time to examine the context and use contingency theory.

First, are the internal contexts similar? Are the products in similar disease areas? Are they at similar life cycle stages? Do they recruit, retain and use their sales team in the same way? If these or any other aspects of the internal situation are different from the comparator company, consider whether those differences could make KAM work more or less well in the new context. Second, are the external contexts similar? What sort of market conditions prevail? What is the competitive scenario? Is the market segmentation similar? Again, any differences between their external, market context and that of the second company could mean that their solution will not solve that company's problem. All this thinking takes a lot of hard work, of course. It is not quick and easy and it may make those that undertake the challenge unpopular in the short term. But this sort of thinking, using research-tested theory as a basis for strategic decisions, is the right thing to do. It is, after all, what science–based companies are expected to do and if the R&D section bases its decisions on science, then why not marketing too? 

Quite simply, companies cannot win by copying. By copying, rather than innovating, the best that can be achieved is comparative parity and not competitive advantage. All the time a business is copying, it is not innovating. So best practice offers little, costs the advantage of innovating and, in any case, is fundamentally contradicted by contingency theory, one of the most accepted and tested theories of all management science. If you are obsessed with best practice, it is time to start believing the science and ignoring the hype. 

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