As China grows apace, digital is increasingly being used to engage both customers and patients
Like dominoes, pharma companies operating in western markets have been falling in recent years (only to get back up) as they have been hit by swathes of patent expiries. Thanks to this, and increasingly stringent cost-containment measures in these same markets, pharma has been looking expectantly at the Chinese market.
China already tops the emerging markets in terms of performance, and will top the global market by 2016, according to the data from IMS Health. China is not only the light of hope in the 'big depression' era, but also will be the strategic focus for the industry for decades to come.
The megatrend – feeling the pulse of China
Digital, mobile and social media now dominate business innovation and the impact of technological advances has changed our lives.
When once mobile signals would be hampered by the smallest structure, now even the construction of the Shanghai Center – a supertall skyscraper which, when completed, will be the tallest building in East China – doesn't stop passers by from using Baidu Map (China's equivalent of Google Maps) when navigating the city's concrete jungle. Nor does it prevent them from using Dianping, a copycat of Yammer (the enterprise social network), to order lunch from any one of a number of new restaurants.
Everyday more than 400 million users are sharing their experiences on Weibo (China's most popular microblogging site) and chatting on Wei Xin (a free instant messaging app), having abandoned SMS.
Thanks to smartphones, SoLoMo – a blend of social media, location targeting and mobile, which is revolutionising marketing – marketers can hone in on customers providing relevant information in a timely fashion.
The multichannel era, which is dominated by internet, social media and mobile technologies, has transformed the way consumers interact with brands and how companies market their products and services. Besides having an effective strategy that integrates traditional and digital channels, multinational pharma needs to restructure its marketing function to capitalise fully on today's opportunities in order to succeed in this multichannel environment in China.
The demise of personal selling: The productivity threshold for each individual professional sales representative (PSR) is reaching a plateau. As one of the oldest industries, pharma still relies on face-to-face detailing and communication to drive sales. While there is still some need for face-to-face contact, in the future companies won't be able to generate more sales by increasing the number of PSRs. As a channel to market, personal selling has been almost completely exhausted.
The rocketing turnover rate: As a result of the reduced effectiveness of personal selling by reps, attrition rates among sales teams will rise, with more than 40 per cent of the team seeking employment elsewhere. Despite a reducing demand for fieldforces these high attrition rates will leave companies with significant training challenges as potentially almost half of the sales team will be new.
A similar pattern is appearing across marketing and management functions, with a 20 per cent attrition rate 'chilling' the blood of any senior boss from global.
Changing behaviours and better evaluation: The backdrop to high attrition is poor evaluation of sales and promotional activities, in particular that of events. Changing attitudes and the proliferation of digital channels have relegated 'live' events (where it is difficult to measure outcomes effectively); consequently they are now often seen as taking place for the sake of it.
Healthcare professionals (HCPs) and patients are now turning to the internet to research treatments and diseases.
The second most popular online search is for healthcare information. Numerous government agencies, organisations and medical associations have developed web-based platforms to share and communicate with healthcare professionals (HCPs) and healthcare consultants (HCC) as a result.
Around 85 per cent of physicians in China go online to look for general medical news or stay up to date with clinical information and 69 per cent go online to find out about new pharmaceutical products, according to the report from Manhattan Research. With a little digging, it is clear that virtual communities, HCP Portal websites and promotional programmes are what physicians are looking for online.
… attrition rates among sales teams will rise, with more than 40 per cent of the team seeking employment elsewhere
On average, physicians in China spend around six hours per week online for professional purposes. Around 60 per cent accessed the internet via a PC, with mobile and tablet devices accounting for around 20 per cent each of the remaining 40 per cent.
Another interesting finding is that almost every HCP, from megacity to tier 5 city (there are five tiers of city in China, tier five is the lowest and represents county level towns), has a smartphone and spends a lot of time during his working day using a mobile device.
Thanks to the poor infrastructure in China, such as cable connections in hospitals, Chinese physicians rely heavily on mobile solutions and are very active in communicating and sharing online, even during consultations. Online discussions, eDetailing, webcasting or even use of social media is not unusual among the majority of Chinese physicians – they see it as an easy and convenient way to engage with their peers, with their partners (healthcare companies) and with their patients.
On average, physicians in China spend around six hours per week online for professional purposes
Despite widespread use of digital and mobile technology among HCPs, the regulatory environment surrounding this has yet to be defined fully, and therefore such use poses a potential risk to patient privacy and confidentiality.
Back to basics: customer centricity
Being truly customer-centric is key to success and every pharma company knows that. It requires building concepts based on market information, product performance data and, most importantly, getting a sense of your customers' perception of your brand. However, being customer-centric is easier said than done, not least because of the paucity of data. For example, IMS data for hospitals in China is based on a 1,000+ sample size yet there are more than 30,000 hospitals in the country.
Part of the customer centricity piece is the delivery of the right information, to the right people at the right time, which can be difficult to achieve with limited customer information. Marketers have never before had so many channel choices when it comes to engaging their audiences. But is there too much choice?
Multichannel marketing in the new landscape
Before taking a multichannel approach, it is important to understand fully how each channel can be used and how effective they are in engaging customers. What proportion of the mix will be allocated to each channel and why?
Over time, the shape of the mix may change slightly, as patterns appear in customer engagement – one channel may be far more effective than another and your mix will need to change accordingly, led by customer preference. Take email for example: for years it played a central role in 'pushing' messages out to your customers – in the days before we realised the importance of 'pulling' audiences in. However, the advent and increasing use of social media changed this dynamic: it gave marketers another means to reach customers, and more importantly gave customers the chance to respond.
The landscape has shifted and will continue to shift still further with continued uptake of tablet technology. Marketers should have a clear vision about the integrated mix with a focus on the 'why and how', more than the 'what'. And in today's environment, marketers can very quickly see if their area of focus is hitting the right notes with their audience.
Analytics give marketers a real-time snapshot of what is working without having to wait for months for a market research report which, by the time it has been published, gives us information about how customers used to behave but not how they behave now. By being able to monitor responses almost immediately, marketers can change tack if necessary in a way that more traditional activities, such as meetings and conferences, do not afford. In addition they can be more confident in securing budget against activities they know are already working.
Increased use of digital forms of work and communication mean that data are now generated with unprecedented speed and volume. The possibility of capturing this customer data and, crucially, making use of it is overwhelming and exciting in equal measure, as are the opportunities for analysis.
It is all too easy for marketers to get lost in the detail of platform construction when it comes to closed loop marketing and customer relationship management systems. This leaves them little or no time to focus on exploring customer feedback to gain insights (more importantly foresight) on what should be the next move.
Whether for brand (eg, health.gsk-china.com) or educational needs (eg, www.univadis.cn) pharma companies are all competing for customers, in particular HCPs, using digital channels.
As part of the promotional mix, digital is changing the traditional rep visit. Messaging no longer needs to conducted via face-to-face personal selling, which has the added benefit of reducing costs while offering physicians more flexibility to engage in the detail at a time that is convenient for them. The medium also offers marketers the chance to profile the visiting physicians and survey them all in one virtual visit.
… it is important to understand fully how each channel can be used and how effective they are in engaging customers
Multichannel use has also revolutionised conferences. Marketers are no longer limited by geography, venue size and budget; mobile and instant messaging solutions mean that delegates from around the globe can discuss and debate with their peers without leaving their desk.
Human and non-human promotion tactics will be organically integrated as the business environment changes. From market research, customer identification and profiling to relationship management and business effectiveness tracking, marketers now have the chance to design and implement the project they previously could only have dreamed of.
Multichannel patient management
To broaden the horizon of coverage, various multichannel marketing programmes have been designed to involve healthcare authorities, patient education organisations and even the payer alliance.
Through proactive intervention, these initiatives have improved treatment adherence significantly and in turn have helped to reduce the cost burden on patients and authorities.
Apps for everyone
Nowadays there is an app for everything: whether it is a physician looking for the latest product information or most recent scientific paper, or a patient looking for more information about his condition, both can access the information anytime, anywhere.
While dosage calculators and calendar planning tools are useful, users are likely to be more interested in online communities that serve both peer-review discussion and UCG management, which increase the credibility and transparency of the information. Self-management guides for disease control are also likely to take centre stage.
Making the leap form reactive to proactive
In this new era, marketers should be encouraged to think big, especially where digital strategy is concerned. This requires a different organisational approach in terms of management both from the top down and from the bottom up, linked to performance and outcomes.
The change will need to take place across the organisation, which means we need to reconsider the following:
The future of digital in pharma
Pharma's use of digital is not new but there are still a number of questions surrounding how the industry can use digital channels to best effect.
Digital should not be seen as a one-off activity for a campaign or as platform for cross functions. It is a way of thinking about and managing marketing, and communicating with customers to build engagement and develop relationships. There are plenty of creative ideas out there to help us achieve better engagement; we simply need to use them. There are exciting times; enjoy the journey.