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Products come and go, but a pharma company’s most valuable, durable asset is its reputation, writes Duncan Mackenzie-Reid and Simon Grist
Hiding between the lines of any company’s ledgers is an
intangible asset, invisible to most auditors, but with the potential to have a very
real impact on bottom line.
Pharma and biotech has long been aware of the value of corporate reputation – a rising tide to lift all boats in a company’s portfolio. The name and reputation of a business will, after all, likely outlive all but the most successful of its product brands. But whilst there’s an elegant simplicity to the argument, this doesn’t mean it’s easily implemented; reversing decades of habitual investment in product promotion is a cultural change which requires a long term view and a budget commitment. And are the results worth the investment? Recent examples suggest so.
Pfizer for instance has shifted focus and marketing spend towards its corporate brand in the last three years as part of its master-brand strategy. According to a report from Pfizer, the results of this shift are significant. For every one point increase in Pfizer’s reputation index, it benefits in measurable ways: a 2.2 per cent sales increase, a 2 per cent increase in patients asking for Pfizer medicines (in certain circumstances), and an increase in market capitalisation of 0.022 per cent.[1]
And as you might expect, Pfizer is also tracking the ‘big picture’ results in its investment in reputation. For each reputational percentage point increase, it claims to create 1.2 million more Pfizer advocates willing and able to defend the company in troubled times, and 1.3 million [1] more people willing to give Pfizer the benefit of the doubt when under attack.
Investment in a dependable, trusted master brand – one that’s always investing in new ways of improving quality of lives and saving them – makes a lot of sense in this context. A recognisable corporate brand, in conjunction with a strong company ethos, often provides a credible platform to engage with the community around an organisation.
At Novo Nordisk the ‘Triple Bottom Line’ is a key element in the way the company does business. The company takes social, financial and environmental considerations into account when making decisions with a view to generating shared value, beyond financial returns. With this mind-set and framework, investment in above-product ‘corporate’ activity such as the Changing Diabetes programme is entirely in keeping with the company ethos. And far from being something intangible, Novo Nordisk measure and analyse the value the company creates for society as well as the business.
So where to start? As with any brand, the key is to identify values and mission – what do you stand for? Without this foundation it is difficult to build the brand structure. Next, consider the narrative you use to convey your corporate story – is it credible and purposeful, and does it speak to your audiences in a language they can relate to? Does your visual architecture, including logos, fit with this story? And do all these elements have the support of the wider company – does the brand truly reflect all functions and strategic objectives and, more importantly, is it an accurate reflection of what employees think and feel about the company, the co-called Brand Inside?
Often the challenge is securing consensus and reflecting different viewpoints, and an external consultancy may prove useful in navigating the pitfalls and providing an independent, expert view on how a brand is developed and perceived. Only once the brand in place should you consider the external and internal expression of the brand through tactical activity.
Look beyond the pharma world, and corporate reputation is increasingly being measured and added to company balance sheets as a bona fide asset – one that’s thought to represent between 20 and 25 per cent of the value of a listed business. It has a huge influence on mergers and acquisitions, share price and recruiting the very best talent. A good reputation is the most important factor in weathering a crisis, because stakeholders are more likely to believe what you say when you defend yourself and are quicker to understand and forgive. Inside the organisation, a strong, well-defined corporate reputation can make for more engaged people who will do a better job of building and maintaining that reputation. And from an external perspective, the evidence of recent surveys suggest that patient and advocacy groups are more than ever considering corporate reputation across the long-term.
Ultimately, the end result of investment in corporate reputation can be the creation of an organisation that is trusted and respected. In health especially, this is surely a result worth pursuing and defending.
[1] SOURCE: Case Study: Using Consumer Engagement to Improve Corporate Reputation. Brenda Robinson, Director, Global Reputation, Digital, Content and Media Strategy, Pfizer. Presentation at the Social Media Strategies Summit, https://www.slideshare.net/SMSSummit/case-study-using-consumer-engagement-to-improve-corporate-reputation
Pharma and biotech has long been aware of the value of corporate reputation – a rising tide to lift all boats in a company’s portfolio. The name and reputation of a business will, after all, likely outlive all but the most successful of its product brands. But whilst there’s an elegant simplicity to the argument, this doesn’t mean it’s easily implemented; reversing decades of habitual investment in product promotion is a cultural change which requires a long term view and a budget commitment. And are the results worth the investment? Recent examples suggest so.
Pfizer for instance has shifted focus and marketing spend towards its corporate brand in the last three years as part of its master-brand strategy. According to a report from Pfizer, the results of this shift are significant. For every one point increase in Pfizer’s reputation index, it benefits in measurable ways: a 2.2 per cent sales increase, a 2 per cent increase in patients asking for Pfizer medicines (in certain circumstances), and an increase in market capitalisation of 0.022 per cent.[1]
And as you might expect, Pfizer is also tracking the ‘big picture’ results in its investment in reputation. For each reputational percentage point increase, it claims to create 1.2 million more Pfizer advocates willing and able to defend the company in troubled times, and 1.3 million [1] more people willing to give Pfizer the benefit of the doubt when under attack.
Investment in a dependable, trusted master brand – one that’s always investing in new ways of improving quality of lives and saving them – makes a lot of sense in this context. A recognisable corporate brand, in conjunction with a strong company ethos, often provides a credible platform to engage with the community around an organisation.
At Novo Nordisk the ‘Triple Bottom Line’ is a key element in the way the company does business. The company takes social, financial and environmental considerations into account when making decisions with a view to generating shared value, beyond financial returns. With this mind-set and framework, investment in above-product ‘corporate’ activity such as the Changing Diabetes programme is entirely in keeping with the company ethos. And far from being something intangible, Novo Nordisk measure and analyse the value the company creates for society as well as the business.
So where to start? As with any brand, the key is to identify values and mission – what do you stand for? Without this foundation it is difficult to build the brand structure. Next, consider the narrative you use to convey your corporate story – is it credible and purposeful, and does it speak to your audiences in a language they can relate to? Does your visual architecture, including logos, fit with this story? And do all these elements have the support of the wider company – does the brand truly reflect all functions and strategic objectives and, more importantly, is it an accurate reflection of what employees think and feel about the company, the co-called Brand Inside?
Often the challenge is securing consensus and reflecting different viewpoints, and an external consultancy may prove useful in navigating the pitfalls and providing an independent, expert view on how a brand is developed and perceived. Only once the brand in place should you consider the external and internal expression of the brand through tactical activity.
Look beyond the pharma world, and corporate reputation is increasingly being measured and added to company balance sheets as a bona fide asset – one that’s thought to represent between 20 and 25 per cent of the value of a listed business. It has a huge influence on mergers and acquisitions, share price and recruiting the very best talent. A good reputation is the most important factor in weathering a crisis, because stakeholders are more likely to believe what you say when you defend yourself and are quicker to understand and forgive. Inside the organisation, a strong, well-defined corporate reputation can make for more engaged people who will do a better job of building and maintaining that reputation. And from an external perspective, the evidence of recent surveys suggest that patient and advocacy groups are more than ever considering corporate reputation across the long-term.
Ultimately, the end result of investment in corporate reputation can be the creation of an organisation that is trusted and respected. In health especially, this is surely a result worth pursuing and defending.
[1] SOURCE: Case Study: Using Consumer Engagement to Improve Corporate Reputation. Brenda Robinson, Director, Global Reputation, Digital, Content and Media Strategy, Pfizer. Presentation at the Social Media Strategies Summit, https://www.slideshare.net/SMSSummit/case-study-using-consumer-engagement-to-improve-corporate-reputation
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