mcm business case14

Multichannel Marketing Business Case Report, 2014Discover the multichannel innovation which is required to meet the evolving need of stakeholders

Report highlights include:Competitive landscape Learn from 10 key Pharma companies how they are developing their multichannel strategies

Optimize channel effectiveness Identify stakeholder needs from Pharma companies and understand how channels can be used to commercially leverage optimum periods within a product’s lifecycle

Implement a winning strategy Understand which critical success factors define successful projects, and learn what can be done to shift your corporations mentality towards multichannel marketing

For more information, visit www.eyeforpharma.com/reports

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For more information visit www.eyeforpharma.com/reports MultIChannel MaRketIng BusIness Case RepORt, 2014 | 8

X The extract below is directly taken from section 1 of the report. The section aims to define the role of multichannel marketing in today’s landscape and identify the value multichannel tactics bring to each stakeholder

Defi nition and role of MCM

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www.eyeforpharma.com/reportsMultIChannel MaRketIng BusIness Case RepORt, 2014 | 16

diff erent channels for diff erent segments of their audi-ence. These industries are now viewed as front-runners in the MCM space.

Certain challenges have limited MCM’s development within the pharma industry, as can be seen in Figure 2. Management buy-in, brand team readiness, channel integration, proving ROI, and regulations are the most signifi cant hurdles. Proving ROI was the most important challenge to 28% of pharma executives in 2014, but only to 14% in 2013 (Gethins, 2013). Last year’s list was topped by concerns over channel integration. ROI’s growing importance refl ects the maturing nature of MCM and the need to prove value to senior fi gures who allocate budgets to such initiatives.

1.2 Market pressuresThe pharma sector already faces obstacles such as growth stagnation in Western countries, patent expiry, an unreliable R&D pipeline, market access hurdles, and eff orts to increase effi ciency whilst reducing costs. Now it must also face increased pressure from the market-place. Payers are becoming more demanding and outcomes-focused, while the customer environment is more complex and competitive.

According to Accenture, 83% of pharma sales and marketing executives intend to increase digital and multichannel interactions, stepping up to the challenge as a way to structure customer communications and improve marketing effi ciency (Robertson, 2013).

All of this means that it has never been a more chal-lenging time for marketers. Yet challenge brings with it opportunity, and pharma companies should rethink how they engage with their customers, satisfy informa-tion needs, and deliver positive outcomes for all stake-holders. Trying to determine the most eff ective channel has given rise to closed loop marketing (CLM).

The pharmaceutical industry’s target stakeholders are maturing and are being infl uenced by other industries’ communications and more cohesive approach to conveying key messages. Pharma’s sales and marketing models must be reshaped in order to align with today’s “new normal” (Accenture, 2013).

Physicians have become more sophisticated in their consumption of information from pharma companies. They turn to diff erent channels at diff erent stages of their decision-making process, and have become famil-iar with various interfaces, such as the Internet, email, and face-to-face presentations by sales representatives.

MCM allows pharma companies to divert lower-value customers (non-prescribing or low-prescribing health-care providers/HCPs) to low-cost channels such as web self-service. It also allows the targeting of high-value customers (high-prescribing HCPs) with higher-cost channels, such as face-to-face sales representatives or a blend of channels, depending on customer preferences (Rangaswamy and Bruggen, 2005).

1.1 why digital marketing is not developedThe 2013 eyeforpharma report found that MCM was at a pivotal stage of evolution. This report reaffi rmed the statement’s validity, and revisited some key elements but also recognized that change had taken place in the pharma industry’s adoption of MCM.

Many contributing industry experts reported seeing developments taking place at all levels of adoption and deployment. Three main stakeholders were considered when developing the MCM initiatives covered in this report: physicians, patients and payers.

FMCG, telecom and fi nancial services were earlier adopters of MCM strategies because they operate in a more free market environment. They have been allowed to experiment and become familiar with the use of

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table 1: Challenges to MCM adoption

Achieving management buy in / raising the required budget 23.53%

Brand team readiness 19.61%

Closed Loop Marketing (CLM) 6.54%

Integrating diff erent channels 20.26%

Platform unavailability 1.31%

Proving ROI of channels 28.76%

Source: eyeforpharma, 2014. (n=254)

Figure 2: Challenges to MCM adoption


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Achieving management

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Brand team readiness

Closed Loop Marketing (CLM)

Integrating different channels

Platform unavailability

Proving ROI of channels

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MCM’s relatively slow adoption within the pharma sector is due to multiple factors. One common chal-lenge appears to be justifying the cost of digital market-ing projects. ROI measurement is not only expensive and time-consuming, but is also not always relevant in smaller projects, where the cost of measurement is similar to the cost of the project. Such an issue confuses those not involved in digital marketing, especially in an industry where all costs need to be justifi ed. Meanwhile, pharma companies must consult with legal and regu-latory teams to ensure compliance in their marketing communications. These legal issues add to overhead costs and hinder a company’s ability to be agile — the foundation of digital innovation.

To overcome these obstacles and achieve digital trans-formation, the pharma industry must improve the way that it does both CLM and MCM. Optimization of these initiatives will create a seamless customer experience in which insights are used to develop future channels and content delivery. This unifi ed approach will allow the development of true multichannel closed loop market-ing (MCLM) (Capgemini, 2012).

1.2.1 Focusing on John lewis — an out-of-industry example, ensuring alignment to the organization’s strategyUK company John Lewis Partnership delivered higher than anticipated results for the fi nancial year 2013, unlike Debenhams, a comparable competitor that operates within the same market. This was largely achieved through a clear and well-constructed multichannel strategy.

John Lewis, a major UK high street retailer, has adopted a clear strategy where digital channels are integrated from its commercial strategy downwards. Three key elements are:

■ Use of a highly memorable TV campaign that has been leveraged via social media for extending branding and communicating core brand value/messages.

■ A strong drive behind Click and Collect, enabling goods to be ordered online and collected in store or via sister Waitrose supermarket outlets. This process is akin to a physician ordering samples.

■ The installation of free in-store Wi-Fi, which allows customers to research goods while shopping and to compare similar online products with those in-branch. Similarly, doctors (and patients) now

CLM is about capturing feedback and gauging market-ing eff orts, according to Morten Hjelmsoe, founder and CEO of Agnitio: “Whenever we send something out, we can get a signal back to see if it’s been read, whether it’s been understood, and if it’s had an impact. We can actually know whether what we’re doing is having an impact” (Barrie, 2014).

By using CLM analytics, MCM allows pharma companies to simultaneously off er their customers (HCPs, patients and payers) information, services and support through multiple channels and to build lasting relationships. Traditional methods are less targeted, more expensive and harder to maintain.

Austin Wilson, Associate Director, Global iPad/Closed Loop Marketing Solutions Leader at Merck, believes that the pharma industry has proven itself successful at deploying single channels (initial CLM deployment stage), but “that it still struggles to meet the strategic needs of a multichannel organization because it still does not consider the full range of individual channels when undertaking it annual planning.” Mr. Wilson also said, “Financial services is an obvious industry to learn from, but also automotive who are profi cient as they take the purchaser along a journey. The pharmaceutical industry is good at its core channels: CME, detailing, conferencing, etc. But it fails to tie it in to an overall approach and fails to take on board the fact that the target audience needs to be taken along a similar jour-ney, moving them along a learning continuum about the product and how it meets the needs of the patient, what its levels of effi cacy are, and how it is superior to other ways in which the disease may be treated.” In eff ect, MCM pushes us to think in terms of conversa-tions, not campaigns.

He added, “Automotive in particular is very skilled at lead generation. In the pharmaceutical industry we may draw analogies with call acquisition”. Automotive has demon-strated its ability to capture customers’ interest via the web and then move them along the acquisition journey through call centers and eventually to showrooms. Additionally, the industry deploys its more expensive channel, sales reps and test drives with customers who are at the buying end of the acquisition journey.

The overriding question is how a pharma company can fully exploit MCM’s potential. The center point of a strong MCM strategy is the coordination and leveraging of channels to communicate consistent, unifi ed and relevant messages.

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Industry overview

In 2013 we reported that cuts in field force head count were fueling developments in multichannel marketing (MCM); companies were not being given an audience with their customers. Now, in 2014, we are in a period of consolidation for field cuts and have noticed a rationale shift among those working in MCM. Companies are investing in MCM not because of a lack of field presence, but because of its achievable results.

In this report we aim to describe the current MCM landscape within the pharmaceutical industry. During the research for this report, we discovered that pharma companies have been presented with a variety of options to transform their existing MCM strategies. However, much of this is blue-sky thinking because of the length of time needed to implement changes. The real value for pharma executives is to understand what has been achieved through MCM and how people got their results. For this reason, we have shared relevant examples of pharma’s use of MCM and presented them in an easy-to-interpret format. Our reasoning behind this is that teams will be able to use this report to build a framework for future projects.

The next step is not to identify which channel to develop next but to understand how to integrate channels and, importantly, how to interpret the data collected from each channel. The collected data must be turned into insights, to augment how companies engage with different customers through different channels. Without these insights, companies will never be able to satisfy customers’ various preferences and will remain in other industries’ shadows.

Leading companies who provided expert insight


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Key reasons to purchase this research

Discover how your competitors have accomplished their strategy -

■ Business Case studies: Gain insight from 10 industry leaders on who has done what, when, how and why, to find out where you can adapt your strategy for future success

■ Optimize your channel effectiveness: Primary insights on which channels are most effective, when to use them, and at what frequency

■ Best practice implementation: Learn the step-by-step process required to implement a successful MCM strategy

■ Monitoring and tracking tactics: Simple tactics to turn raw CRM data into valuable insights

■ skilling up your staff: Identify the training methods required to ensure effective implementation of new channel tactics

■ leverage multichannel: Integrate channels into your promotional mix so they compliment your sales force

■ stay compliant: Regulatory framework mapped out for each major region, and each emerging channel so you don’t have to

■ lifecycle Management: Understand the best time to launch each channel so you don’t waste any resources

Peer reviewers

Haider Alleg, Global eMarketing Manager, Gedeon Richter

John Pugh, Global Innovation Lead, Boehringer Ingelheim

Susanne Schaffer, Multichannel Marketing Manager, MSD (a subsidiary of Merck)

Austin Wilson, Associate Director, Global iPad/Closed Loop Marketing Solutions Leader, Merck


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Welcome 3

About eyeforpharma 4

Acknowledgements 5

Executive summary 9

Background to this report 9

Chapter 1 — Role of MCM 9

Chapter 2 — Channel optimization 9

Chapter 3 — Deploying MCM strategies 10

Chapter 4 — Implementing an MCM strategy 11

Chapter 5 — Growing channel numbers 11

Chapter 6 — What does the future hold for MCM? 12

Methodology 13

Introduction 14

Background to this report 14

Historical perspective 14

1. Defi nition and role of MCM 16

1.1 Why digital marketing is not developed 16

1.2 Market pressures 16

1.3 Pharmaceutical marketing maturity compared with other sectors 19

2. Channel optimization 22

2.1 Who wants what, when, and through which channel? 22

2.2 Healthcare professionals and patients — key diff erences 23

2.3 Stakeholder needs 23

2.4 Emerging digital channels 24

2.5 How a product life cycle infl uences resource allocation 27

2.6 Deploying an MCM strategy 29

3. Multichannel marketing strategies 30

3.1 Proven channels 30

3.2 The importance of innovative strategies 32

3.3 Nonpromotional channels 34

3.4 Emerging channels 35

4. Implementing an MCM strategy 36

4.1 Checklist — Are you ready for an integrated strategy? 38

4.2 Critical success factors 38

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Contents


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4.3 Barriers to success 39

4.4 Address the skills gap: opportunities to upskill your organization 40

5. Growing channel numbers 43

5.1 Attribution — its importance and how to plan it in 44

5.2 Meet audience needs for information 45

6. What does the future hold? 46

6.1 Improved information management capabilities 46

6.2 Adapting will be key 47

6.3 Improved aid for the sales force 48

Industry learning 49

MCM evolves into MCLM 49

Advanced data leveraging 49

Multichannel will become ubiquitous 49

Abbreviations 50

References 51

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List of Figures

Figure 1: Survey of marketers’ confi dence in their digital expertise 15

Figure 2: Challenges to MCM adoption 17

Figure 3: Pharma organizations’ confi dence in their MCM strategy (2014) 20

Figure 4: Pharma organizations’ confi dence in their MCM strategy (2013) 21

Figure 5: Physician channel preferences 22

Figure 6: Basic Product Life Cycle: When to launch each channel 28

Figure 7: Do you have a process whereby an emerging channel is assessed? 29

Figure 8: The most important channel to a brand or product’s success 31

Figure 9: How much eff ect does promotional innovation have on sales in the pharma industry? 33

Figure 10: MCLM maturity model 36

Figure 11: Maturity of MCM capabilities 40

Figure 12: How pharma sales and marketing executives rate the performance of their organization 42

Figure 13: Top fi ve business priorities in 2013 41

List of Tables

Table 1: Challenges to MCM adoption 17

Table 2: Pharma organizations’ confi dence in their MCM strategy (2014) 20

Table 3: Pharma organizations’ confi dence in their MCM strategy (2013) 21

Table 4: Stakeholder needs from pharmaceutical companies 24

Table 5: Main social media channels 24

Table 6: Regulation diff erences of key regions 26

Table 7: At what stage should each channel fi rst be deployed? 28

Table 8: Do you have a process whereby an emerging channel is assessed? 29

Table 9: The most important channel to a brand or product’s success 31

Table 10: How much eff ect does promotional innovation have on sales in the pharma industry? 33

Table 11: Current vs. ideal day in the life of a physician and pharma 37

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Methodology

The methodology used to gather data for this report encom-passed:

1. An exclusive eyeforpharma multichannel marketing survey sent out to more than 900 pharmaceutical professionals, includ-ing marketing directors, brand managers, product managers, eMarketing specialists, consultants and heads of sales forces across the globe.

2. 20 preliminary interviews centered on stakeholders’ challenges and needs surrounding MCM.

3. A review of additional literature and conference proceedings pertaining to pharma’s MCM usage. Secondary sources were selected by referral from those interviewed. To obtain initial preliminary information, we sent the MCM survey to a targeted section of our eyeforpharma database in January 2014.


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X The extract below is directly taken from section 1 of the report. The section aims to define the role of multichannel marketing in today’s landscape and identify the value multichannel tactics bring to each stakeholder

Defi nition and role of MCM

1

deFIn

ItIOn

an

d R

Ole O

F MC

M


diff erent channels for diff erent segments of their audi-ence. These industries are now viewed as front-runners in the MCM space.

Certain challenges have limited MCM’s development within the pharma industry, as can be seen in Figure 2. Management buy-in, brand team readiness, channel integration, proving ROI, and regulations are the most signifi cant hurdles. Proving ROI was the most important challenge to 28% of pharma executives in 2014, but only to 14% in 2013 (Gethins, 2013). Last year’s list was topped by concerns over channel integration. ROI’s growing importance refl ects the maturing nature of MCM and the need to prove value to senior fi gures who allocate budgets to such initiatives.

1.2 Market pressuresThe pharma sector already faces obstacles such as growth stagnation in Western countries, patent expiry, an unreliable R&D pipeline, market access hurdles, and eff orts to increase effi ciency whilst reducing costs. Now it must also face increased pressure from the market-place. Payers are becoming more demanding and outcomes-focused, while the customer environment is more complex and competitive.

According to Accenture, 83% of pharma sales and marketing executives intend to increase digital and multichannel interactions, stepping up to the challenge as a way to structure customer communications and improve marketing effi ciency (Robertson, 2013).

All of this means that it has never been a more chal-lenging time for marketers. Yet challenge brings with it opportunity, and pharma companies should rethink how they engage with their customers, satisfy informa-tion needs, and deliver positive outcomes for all stake-holders. Trying to determine the most eff ective channel has given rise to closed loop marketing (CLM).

The pharmaceutical industry’s target stakeholders are maturing and are being infl uenced by other industries’ communications and more cohesive approach to conveying key messages. Pharma’s sales and marketing models must be reshaped in order to align with today’s “new normal” (Accenture, 2013).

Physicians have become more sophisticated in their consumption of information from pharma companies. They turn to diff erent channels at diff erent stages of their decision-making process, and have become famil-iar with various interfaces, such as the Internet, email, and face-to-face presentations by sales representatives.

MCM allows pharma companies to divert lower-value customers (non-prescribing or low-prescribing health-care providers/HCPs) to low-cost channels such as web self-service. It also allows the targeting of high-value customers (high-prescribing HCPs) with higher-cost channels, such as face-to-face sales representatives or a blend of channels, depending on customer preferences (Rangaswamy and Bruggen, 2005).

1.1 why digital marketing is not developedThe 2013 eyeforpharma report found that MCM was at a pivotal stage of evolution. This report reaffi rmed the statement’s validity, and revisited some key elements but also recognized that change had taken place in the pharma industry’s adoption of MCM.

Many contributing industry experts reported seeing developments taking place at all levels of adoption and deployment. Three main stakeholders were considered when developing the MCM initiatives covered in this report: physicians, patients and payers.

FMCG, telecom and fi nancial services were earlier adopters of MCM strategies because they operate in a more free market environment. They have been allowed to experiment and become familiar with the use of

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table 1: Challenges to MCM adoption

Achieving management buy in / raising the required budget 23.53%

Brand team readiness 19.61%

Closed Loop Marketing (CLM) 6.54%

Integrating diff erent channels 20.26%

Platform unavailability 1.31%

Proving ROI of channels 28.76%


Figure 2: Challenges to MCM adoption


0%

5%

10%

15%

20%

25%

30%

Achieving management

buy in / raising the required

budget

Brand team readiness

Closed Loop Marketing (CLM)

Integrating different channels

Platform unavailability

Proving ROI of channels

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MCM’s relatively slow adoption within the pharma sector is due to multiple factors. One common chal-lenge appears to be justifying the cost of digital market-ing projects. ROI measurement is not only expensive and time-consuming, but is also not always relevant in smaller projects, where the cost of measurement is similar to the cost of the project. Such an issue confuses those not involved in digital marketing, especially in an industry where all costs need to be justifi ed. Meanwhile, pharma companies must consult with legal and regu-latory teams to ensure compliance in their marketing communications. These legal issues add to overhead costs and hinder a company’s ability to be agile — the foundation of digital innovation.

To overcome these obstacles and achieve digital trans-formation, the pharma industry must improve the way that it does both CLM and MCM. Optimization of these initiatives will create a seamless customer experience in which insights are used to develop future channels and content delivery. This unifi ed approach will allow the development of true multichannel closed loop market-ing (MCLM) (Capgemini, 2012).

1.2.1 Focusing on John lewis — an out-of-industry example, ensuring alignment to the organization’s strategyUK company John Lewis Partnership delivered higher than anticipated results for the fi nancial year 2013, unlike Debenhams, a comparable competitor that operates within the same market. This was largely achieved through a clear and well-constructed multichannel strategy.

John Lewis, a major UK high street retailer, has adopted a clear strategy where digital channels are integrated from its commercial strategy downwards. Three key elements are:

■ Use of a highly memorable TV campaign that has been leveraged via social media for extending branding and communicating core brand value/messages.

■ A strong drive behind Click and Collect, enabling goods to be ordered online and collected in store or via sister Waitrose supermarket outlets. This process is akin to a physician ordering samples.

■ The installation of free in-store Wi-Fi, which allows customers to research goods while shopping and to compare similar online products with those in-branch. Similarly, doctors (and patients) now

CLM is about capturing feedback and gauging market-ing eff orts, according to Morten Hjelmsoe, founder and CEO of Agnitio: “Whenever we send something out, we can get a signal back to see if it’s been read, whether it’s been understood, and if it’s had an impact. We can actually know whether what we’re doing is having an impact” (Barrie, 2014).

By using CLM analytics, MCM allows pharma companies to simultaneously off er their customers (HCPs, patients and payers) information, services and support through multiple channels and to build lasting relationships. Traditional methods are less targeted, more expensive and harder to maintain.

Austin Wilson, Associate Director, Global iPad/Closed Loop Marketing Solutions Leader at Merck, believes that the pharma industry has proven itself successful at deploying single channels (initial CLM deployment stage), but “that it still struggles to meet the strategic needs of a multichannel organization because it still does not consider the full range of individual channels when undertaking it annual planning.” Mr. Wilson also said, “Financial services is an obvious industry to learn from, but also automotive who are profi cient as they take the purchaser along a journey. The pharmaceutical industry is good at its core channels: CME, detailing, conferencing, etc. But it fails to tie it in to an overall approach and fails to take on board the fact that the target audience needs to be taken along a similar jour-ney, moving them along a learning continuum about the product and how it meets the needs of the patient, what its levels of effi cacy are, and how it is superior to other ways in which the disease may be treated.” In eff ect, MCM pushes us to think in terms of conversa-tions, not campaigns.

He added, “Automotive in particular is very skilled at lead generation. In the pharmaceutical industry we may draw analogies with call acquisition”. Automotive has demon-strated its ability to capture customers’ interest via the web and then move them along the acquisition journey through call centers and eventually to showrooms. Additionally, the industry deploys its more expensive channel, sales reps and test drives with customers who are at the buying end of the acquisition journey.

The overriding question is how a pharma company can fully exploit MCM’s potential. The center point of a strong MCM strategy is the coordination and leveraging of channels to communicate consistent, unifi ed and relevant messages.

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About eyeforpharma

eyeforpharma is a leading global media company specializing in business intelligence that helps pharmaceutical companies adopt business models centered around patients’ needs for affordable and accessible healthcare.

As an ‘eye’ for, and on, the industry, eyeforpharma exists:

■ to help pharmaceutical companies stay clearly focused on the core reasons they exist, ■ to give them the strategic tools they need to be successful in truly serving patients with ingenuity and real value, and ■ to continue to innovate to meet changing healthcare realities.

eyeforPharma has organized conferences for and offered strategic advice to the pharma industry since 2002. From that date, our busi-ness has grown 30% year on year. Our mission continues to be the advancement of communication and information exchange within the dynamic and ever-changing healthcare industry.


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