Other sectors realise the importance of behaving in a morally responsible way while also making a profit, but the pharmaceutical industry must work to climb the ethical league
Even though the term corporate social responsibility (CSR) has been around since the late 1960s, it has only really gained tremendous momentum and meaning since the financial meltdown of 2008. CSR can be defined as the way companies integrate social, environmental and economic concerns into their values and operations in a transparent, accountable manner. Simply put, how are we giving back?
However, the issue has been how to make a profit while doing the right thing, as CSR initiatives have been seen to be long-term in nature, accompanied by softer metrics. Therefore, can CSR initiatives be sustainable and help drive profitability? Or from a marketing perspective, can CSR help drive brand equity?
Adweek (March 31, 2010), reported on a survey that measured consumer perceptions of CSR practices and ranked companies that are the most responsible. It found that, despite the recession, 75 per cent of consumers believed social responsibility is important, and 55 per cent of consumers said they would choose a product that supports a particular cause against similar products that did not. The same article noted that one industry where perceptions have declined significantly is healthcare. This is very sad news, but perhaps not a big surprise.
For an industry like the pharmaceutical sector that does so much good for the health and wellbeing of patients and stakeholders, it is unfortunate that its favourability rating is in the same category as financial institutions, oil, petrol and tobacco companies.
This perception stems from business issues that the pharma industry is constantly addressing, whether it is about new government interventions (and there are plenty happening in Europe), market access and price, patent expiry and so on. It has become an industry that is always on the defensive. Yet, while it works to both enhance and save lives, it is judged through one-dimensional financial measures (i.e. price) and therefore seen as too expensive.
The result is that credibility has been eroded and it is now time to rebuild it. This is best summed up by a quote by Leroy Stick (aka @BPGlobalPR) in reference to the BP oil spill: “You know the best way to get the public to respect your brand? Have a respectable brand.”
The implications for marketers are:
Adapt or be left behind
From a communications perspective, it is getting more complicated. First, the target audience or stakeholders has expanded dramatically in the last decade. Previously, it was quite straightforward: rep to doctor to patient to pharmacist. Now, there are more specialities of healthcare professionals in the mix: market access/payers, advocacy groups, caregivers, case managers, nurses, personal assistants, group practices and so on. This has resulted in the need to address these fragmented audiences with more synchronised efforts and communications.
Second, as important as it is to define to whom communications should be targeted, it is just as important, and perhaps more so, to understand where to find them.
A decade or so ago, it was straightforward. Virtually all material was in print and delivered by the rep. Today, the digital environment has made some of this traditional mix less important as the shift has gone towards digital. However, in the digital space, there are so many communication channels: opportunities from web, augmented reality, mobile, blogs and social media, to name a few. In fact, technology is outpacing the ability to learn all the new media for digital communications.
The point is that where customers receive information from has changed and those customers are in charge of selecting when and how they receive that information. As such, to make an impact with brands, it must be ensured that the brand and what it represents match what the customers want to experience. Therefore, this means marketing for the customers rather than at them.
Who cares wins
The study 'Generating Global Brand Equity Through Corporate Social Responsibility to Key Stakeholders' (Anna Torres et al, Economics and Business Department, Universitat Pompeu Fabra, Spain) examined 57 global brands from 10 countries: US, Japan, South Korea, France, UK, Italy, Germany, Finland, Switzerland and the Netherlands, over a six-year period. The report demonstrated that CSR to various stakeholders, including customers, shareholders, employees, suppliers and community, had a positive effect on global brand equity.
Furthermore, policies aimed at satisfying community interest helped reinforce the credibility of socially responsible policies to other stakeholders.
As noted in David Jones's book, entitled Who Cares Wins, the most successful businesses in the future will be those that are the most socially responsible. A major global study found that approximately three-quarters (74 per cent) of consumers think that business bears as much responsibility for driving positive social change as governments.
How to embrace CSR
Tips for including CSR as an integral part of the brand include:
Ironically, pharma had been displaying strong CSR since well before the term was recognised. Think about all the healthcare programmes that have been set up for indigenous populations in developing nations; the vaccination programmes, the free medication, the subsidisation of clinics, for example. The industry has often done so much good behind the scenes but it has not been good at gaining recognition for this.
Consider the actions of parent company, Havas, which has been actively involved in CSR over the years, too, making it part of the company's strategy. One programme that illustrates its commitment is One Young World (www.oneyoungworld.com), a global forum for young leaders. In fact, no other youth-dominated event gathers representatives from more countries, except the Olympic Games.
At the 2011 summit in Zurich, 1,200 delegates from 171 countries issued calls to action to young people around the world: on the role of corporations within the developing world; on government policy on social media; on inter-faith dialogue; on the impact of climate change; the obesity epidemic and immunisation policy, as well as starting the #wakeupcall movement targeting governments everywhere.
In their deliberations, they were inspired and activated by counsellors – leaders including Archbishop Desmond Tutu, Muhammad Yunus, Bob Geldof, Donna Karan, Fatima Bhutto, Crown Prince Haakon of Norway, Wael Ghonim and Unilever's Paul Polman.
Recognised world leaders are invited each year to lend their stature as counsellors to the delegates at that year's summit, inspiring them to take up leadership roles and responsibilities and drawing the attention of the world's governments and business leaders to the demands and aspirations of the next generation.
With over 100 actions taken by One Young World Ambassadors 2010, almost four million people have been impacted directly by, for example, the first African Student Leaders Summit, the Haitian and Zimbabwe Schoolbag projects and one of the ambassadors became the youngest person to ski to the geographic North Pole. Within months of Summit 2011, delegates had spoken at several international events, such as the United Nations Alliance of Civilizations (UNAOC), and two had begun running for political office: for the US Congress in Arizona and to become an MP in Uganda.
The third summit will be held in Pittsburgh, US, in October. There, the One Young World Ambassadors of 2011 will be reporting on the results of their global actions and the 2012 delegation will take up their roles in acting for positive global change.
The right image
The pharmaceutical industry has an opportunity to do what is right and provide customers with a brand experience that will make a difference beyond the clinical features. CSR opens the door to creating a more meaningful and tangible relationship with customers. Now is the time to embrace the environment of doing right and doing it well, thereby restoring the credibility and reputation of the industry. It is up to everyone to play a part.
Ed Stapor is partner and CEO Europe at Havas Health, as well as a member of the EACA Health Communications Council