It’s fair to say that the European pharmaceutical industry’s adoption of multichannel marketing (MCM) has been slow, cautious and variable. Compared to most other sectors, pharma is widely considered to be behind the play – held back by a combination of logical concerns, irrational fears and lazy excuses. However, change is apparently afoot.
For the first time in five years, pharma’s digital spend has increased: Across Health’s Multichannel Maturometer 2017 indicates that investment in digital has grown by 20% in the past 12 months. Alongside it, there are strong signs of an increase in executive buy-in for multichannel programmes. These upward trends are hugely encouraging, signalling the apparent dawn of a new phase of multichannel maturity. However, while the support of senior stakeholders is a welcome and indeed essential development, the concurrent growth in digital budgets is a double-edged sword. Multichannel progress requires much more than money. In fact, with channel mix and multichannel metrics widely recognised as areas of weakness, there’s a risk that the additional investment could be squandered on the wrong activities – leading to suboptimal returns, increased dissatisfaction and a reversion to old approaches. So how can companies avoid the pitfalls and make the most of this new-found support for MCM?
Fonny Schenck, CEO, Across Health, believes that 2017 could prove to be the year when pharma’s multichannel progress accelerates – but also points to potential concerns lurking in the shadows of the positive headlines. “There are indications that, despite senior executives finally exerting top-down leadership of multichannel programmes, there remains a poor understanding of what ‘good’ looks like. It’s perhaps no great surprise. Our 2017 survey shows that companies still admit to having insufficient knowledge of the opportunities digital and multichannel present – with know-how actually declining since 2016. The only area where knowledge appears to be increasing is the multichannel rep – with analysis revealing that rep-focused channels are the only MCM tactics to grow consistently in the past five years. This could suggest the industry has a myopic focus on digitising the traditional sales model – an approach which both risks wasting the many opportunities of MCM and reinforces the view that companies do not yet have the wherewithal to leverage them.”
Multiple channels is not multichannel
The field force is, perhaps, a natural place for pharma to start its multichannel evolution – it’s familiar territory and optimising it has become a nagging operational headache that the industry is desperate to cure. The pursuit of a more effective commercial model is ongoing. “Senior leaders in pharmaceutical companies are looking for a better way to access their customer-base,” says Paul Black, chief operating officer, OUTiCO. “The challenges around call rates, access and inefficiencies in the traditional representative model are well known. However, the alternative approaches that companies take can sometimes be too crude or simplistic. For example, we frequently hear of companies who think that they can engage their customers solely via digital channels, or who believe that telesales is the solution to the problem of gaining HCP access. Conversely, some go to the opposite extreme and try to leverage as many channels as they can. These tactics are symptomatic of a common silo mentality. There’s often a degree of separation between sales and marketing where each party develops its own strategic view of how to engage customers and heads off in its own direction with isolated activities that reflect that view. Apart from being disjointed and inefficient, the approach is a long way from the utopia of integrated multichannel. Just because companies use multiple channels doesn’t mean they’re acting in a multichannel capacity.
“True multichannel is about engaging the customer in their preferential style. This requires insight. The smartest companies are using intelligence and closed loop analytics to map channels, customers and preferences – and understand how they relate. They’re then using that intelligence to inform a genuine multichannel approach that combines appropriate human and digital engagement and allows them to optimise their commercial strategies. Fundamentally, if you’re going to do multichannel, you need to make sure you’re using the right channel for your end user – because if you’re not, you’re simply wasting time and money.”
Measures for measures
The need to optimise resources is ever-critical. However, in a communications landscape that has become increasingly complex, the industry perhaps needs to establish a framework for more effective multichannel metrics – particularly if increases in budgets are to yield the desired outcomes. “Companies are becoming better at measuring ROI across channels – but there’s a long way to go,” says Paul Townley-Jones, senior consultant at Blue Latitude Health. “Return on Marketing Investment is the ultimate measure of financial efficiency – and it’s essential to comparing campaigns and helping allocate budgets. However, effectiveness should in fact be a measurement of how much net profit campaigns deliver, rather than the incremental sales of every tactic. Again, other industries are further down the road with this – bringing in econometricians to measure true ROI. You’d be hard-pressed to find an econometrician in pharma. Marketers may therefore benefit from training to help understand the formulas and methods to calculate ROI. This would help ensure that campaigns are set up in the right way for effectiveness to be measured. This will be vital to driving the quality of multichannel engagement.”
In an ever-competitive business environment where share price is all important, making the most of multichannel is a strategic imperative for pharmaceutical organisations. The challenge is at last occupying the c-suite, as companies transition from sporadic, bottom-up innovation to structured, top-down leadership. But the bottom line is clearly the bottom line, and the need for commercial efficiencies has become the catalyst for frank and sober assessment of a failing model. “Senior stakeholders are increasingly buying into the multichannel concept,” says Paul Black. “Many have recognised it’s become too expensive to put a traditional field force on the road and that they need to do something fundamentally different to drive shareholder value. It’s an uncomfortable thought and one where the alternative approaches take them into areas where there’s traditionally been fears around governance and compliance. However, necessity is the mother of invention. If a salesforce is costing more than it’s yielding over the 12-year life cycle of a brand, it’s not sustainable. Sustainable customer engagement dictates the need to communicate across multiple channels – so long as they’re the right channels – and to a broader, more diverse customer-base than simply HCPs. Companies also need the agility to adapt their approach over the product life cycle. The keys to success are courage and intelligence. The future is without doubt multichannel. If you cannot see it – and do it well – you’re going to be in trouble.”
The customer is king
One area that will be key to ‘doing it well’ is customer insight – the lifeblood of MCM. Without deep and responsive customer intelligence, communications will neither resonate nor cut-through. It’s a message that’s finally hitting home. “Pharma has at last recognised that multichannel is not about pushing content across multiple different channels, it’s about personalising the experience and delivering content across the correct channel with respect to the context in which the person is accessing the information,” says Paul Townley-Jones. “The industry has generally become smarter in how it distributes its budget, cross channel. However, there’s still work to be done in the shift towards true customer-centricity that will fuel multichannel excellence. Progressive companies are focusing on customer experience – they’re developing detailed customer journeys that show a greater understanding of the context in which their customers live and the channels they use. This deeper appreciation is being supported by an improvement in customer insight that’s informing multichannel strategies. But in some companies, brand plans remain too insular – focusing on what the organisation wants rather than what their customers want.
“To be successful, companies need to build their long-term vision around identifiable customer needs. If they do that properly, they’ll naturally become multichannel organisations. Ultimately, making the transition from a brand-focused to a customer-focused company is crucial to multichannel excellence. This requires setting out your vision and identifying the critical success factors that are going to help you reach it. From there, you can develop the roadmap and workstreams that will help you transform into a customer-centric – and therefore multichannel – corporation. In other sectors, companies are leading the charge with the introduction of roles like chief customer officer. We are not yet seeing that in pharma. We ought to be.”
New segments, new opportunities
The argument for better customer insight is universally accepted. However, one of pharma’s biggest challenges has always been the breadth of its customer-base, which extends far beyond traditional HCPs. This breadth has not only created obvious regulatory concerns around how industry communicates with stakeholders, it’s also brought added complexities to multichannel thinking. Consequently, the road to multichannel excellence has become paved with old habits – not least an apparent fixation on targeting doctors.
“The industry talks a lot about patient-centricity, but if you look at what it actually does, it still largely focuses on physicians,” says Fonny Schenck. “In the longer run, companies won’t be able to sustain competitive differentiation simply by sending out reps equipped with digital tools – just think of the high hopes for tablets initially and how fast commoditisation set in.
“Although the move to the multichannel rep is important, it should not be the only focus. A recent MIT Sloan management review concluded that successful organisations are those that don’t just move first, they use digital to enter different segments. The business case for omnichannel customer engagement in other segments – referrers, no-see HCPs, caregivers, patients, nurses, payers – as well as new growth opportunities like health technology, is hardly ever made. At the same time, other players – like Google, Apple, other tech giants, as well as VC-backed start-ups – are hugely consumer-centric and are beginning to enter the space. If pharma continues its myopic focus on a prescriber-led business model it will end up being too late to a party where Apple and the likes already own the right data on consumers and patients. These entrants aim to help consumers stay healthy longer, and, when they do get ill, navigate them and their providers through all treatment options (ie, beyond pharmaceuticals) in an evidence- and value-based way, and then maximise adherence and optimise outcomes. You can see some of these dynamics already playing in the diabetes area – but much more is coming.”
And so the message is clear: the pharmaceutical industry’s future business model will look very different from that which we see today. Pharma needs to get in front of this before disruptive innovation from outside the sector overtakes it. As the Canadian ice hockey player Wayne Gretzky once famously said: “I skate to where the puck is going to be, not where it has been.” It’s a powerful metaphor. Multichannel can help us get there – but we’d better get our skates on.