Pharma Marketers Make Their Mark

EMM Group’s Gordon Wade, TNS Healthcare’s Elaine Riddell and Joseph E. Kuchta of Goble & Associates on how to build brand cache and consumer loyalty.

Return on investment (ROI) remains the common mantra from the boardroom downwards – yet marketers are increasingly being asked to deliver bigger profit margins from diminishing marketing budgets and to demonstrate accountability when making promotional investments. So how can drug marketers build brand cache and consumer loyalty for their products? NGP spoke to a number of leading experts to find out.

With more than 35 years of deep marketing experience, Gordon Wade, Founding Partner of the EMM Group, is one of the foremost marketing consultants in the world. He has worked with more than 75 superior companies (including Procter & Gamble, DuPont, IBM, Citicorp, Johnson & Johnson, Unilever, BAT, Nestle, Gillette, Dollar General and 7-11) in more than 100 categories. Wade has pioneered many groundbreaking disciplines, such as enterprise marketing management, corporate strategic development, category management, loyalty marketing and new product development. By successfully embedding skills and processes around those disciplines, Gordon has greatly strengthened brands and increased shareholder returns for his clients.

Elaine Riddell is CEO of TNS Healthcare, the world’s largest primary research provider to the global healthcare industry, with local client service support in 43 countries throughout the Americas, Europe, the Middle East and Asia Pacific. TNS Healthcare delivers advanced market research consulting to the worldwide pharmaceutical, biotech and medical device industries, as well as health-focused ad agencies, media and analysts. It offers globally consistent solutions and custom advisory services for product introductions; brand, treatment and sales force performance optimization; and physician and DTC promotional assessment.

Joseph E. Kuchta, President of Goble & Associates Healthcare Communication, has spent the last 20 years in the healthcare communications field both on the client and agency sides: five years with Abbott as an Advertising and Product Manager before taking on Creative Director roles at both Corbett Health and Goble & Associates. An expert strategist with a creative flair, Kuchta is a hands-on contributor to all of the agency’s business, marketing and creative strategies. Full-service healthcare marketing firm Goble & Associates specializes in all facets of healthcare communications, including print, on-line and multimedia programs. Clients of Goble & Associates range across the spectrum of the healthcare industry, from pharmaceutical, to diagnostic, to OTC, to healthcare providers.

NGP. New industry guidance, complex rules and regulations, increased regulatory scrutiny and heightened competition are impacting marketing strategies on a number of levels. What are the top concerns for pharma marketing executives, and how are they facing up to these various challenges?

ER. Key among the concerns now facing pharma is the increasing difficulty reaching and influencing physicians through traditional sales efforts. A recent TNS Healthcare study among cardiologists, for example, shows that just 27 percent of sales visits result in the rep actually getting in to see the physician and discussing at least one product. It also reveals that only 23 percent of US physicians would rate sales force performance as excellent – in spite of the fact that pharma companies are now spending US$24 billion a year on sales activities.

These findings are especially alarming at a time of such heightened competition, and it’s more important than ever for companies to be sure their messages are being heard. The stakes are increased even further by the recent focus on practices used in the past to help with access – such as dinners or gifts or even symposia – so many companies need to re-think their traditional approaches.

To heighten the concern even more, skyrocketing launch costs and fewer blockbusters make it critical that companies optimize their in-line brand performance – which is highly dependent on marketing and sales efforts. Our research shows that, at launch, brand attributes are key in driving success. But as a brand matures, the quality of its marketing and sales support plays the major role in its continued growth.

Clearly, pharma companies need to find more effective ways to build relationships with doctors – and provide the support that truly impacts prescribing choices. To face up to that challenge, they need to look at all the touch points between physicians and their brands – not just rep interactions but also web-based services, e-detailing, practice management support, professional and DTC/DTP communications programs and even corporate reputation issues. Then they have to figure out, for each doctor, how to configure the optimal set of marketing and sales experiences to drive prescribing.

To do that, they must switch their focus from the sales process – simply counting details or measuring message recall – to the sales driver: the physician. That means identifying the specific marketing and sales actions required to strengthen physician relationships and therefore, improve productivity and effectiveness.

GW. The top challenge in the long term is the possibility that society will withdraw the industry’s right to make a profit. The industry’s response to this – individually and collectively – is disorganized, confused, inept and, I am sorry to say, timid to the point of cowardice. No industry has contributed more to the improvement of health and overall quality of life. It would be reassuring to those of us who fervently believe this to be true if the industry would step forward with pride and conviction and assert its right to a profit. If this does not begin to occur, the industry will become a utility to the detriment of society’s sickest citizens. As a person who has spent a considerable period of my life on the front lines of politics, I am sure that pharma will either assert its right to a profit or it will be withdrawn.

The next challenge is formulary access, a problem that will intensify over the next few years. This is less a marketing problem than a strategic problem that companies are addressing by a variety of means ranging from leveraging mass to offering a variety of non-molecule related services.

The third problem is the declining efficacy and efficiency of detailing. This is a complex problem with serious implications for pharma marketing. Many companies have responded by reductions in sales forces and while this may increase efficiency in the short term, it certainly does not address effectiveness in the long term. This problem requires a multifaceted approach that begins with a sophisticated marketing process producing optimized plans driven by multivariate analysis. Frankly, very few pharma companies have a real marketing process and although many pharma companies use multivariate response analysis and ROI optimization at some level, very few are doing this effectively. I know of one company with a first class process and a best practice usage of multivariate analysis to drive the process. I’m confident they are the only one. I’m confident because we wrote the definitive report on ‘marketing accountability’ for the Association of National Advertisers and in that capacity got to see the approaches of many leading companies in and outside of pharma. If pharma companies are going to respond effectively to the crisis in detailing, they will have to take their heads out of the sand and benchmark their practices, especially their process and use of analytics.

JK. One note about the regulations and environment we all function in today. It may be a little bit of old school thinking, but I believe that regulatory scrutiny is no worse today than it has been previously, meaning that if your messages and your marketing and educational activities are responsible, within label and well supported, there is no more scrutiny now than there has been in the past.

Unfortunately, instances of irresponsibility have been magnified – not only in our industry but also in the general public – and have led to these feelings that the rules have changed, and marketers are so much more limited in what they can now do. Sure the pharma guidelines are more defined than they ever have been, but DDMAC has always clearly defined their rules, and neither are so restrictive to the point that they prevent responsible communication to continue to take place. That responsibility among us marketers was just as necessary 20 years ago as it still is today.

NGP. Now, more than ever, pharma marketing operations are being required to demonstrate that they are adding value and delivering measurable return on investment. But what strategies can marketing departments use to assess the effectiveness of their marketing programs? And how can they ensure maximum ROI?

JK. Among our client base, which consists of both large and small companies, the overriding concern we hear is remarkably similar across the board: how do I continue to utilize every resource I have to maximize the impact of every dollar I spend? While this has never been an easy equation, there seems to be more pressure on everyone in these times to scrutinize every activity and assign some type of accountability, even in vehicles or programs where ROI is very difficult to quantify.

For example, the large number of targeted and interactive media options have opened up a whole new world for pharma marketers, yet some approach this electronic can of worms with a sense of confusion and apprehension because it is so new and so different from what the traditional mix used to look like. And how can they justify spending money in these new areas at the expense of the once vaunted sales force? The decisions that need to be made with budgets that continue to get squeezed are tougher now than they ever have been. The successful marketers we’ve seen are the ones who adapt and change, the ones who take a bit of a risk because of their training and instinct, even if the ‘quantification’ isn’t quite there yet.

GW. This is the leading concern across marketing in all verticals not just Pharma. That’s why the Association of National Advertisers commissioned a task force to study Marketing Accountability. We were asked to co ordinate the task force and write the final report, a copy of which is available from thon the ANA’s website (ana.net) or our website (emmgroup.net).

Measuring the ROI of marketing has become dramatically easier today. Many companies offer sophisticated analytics that measure average and marginal ROI, which facilitates optimization scenarios at the campaign, brand and portfolio level.

Unfortunately many companies are not using the available analytics in a best practice fashion especially in the area of quantifying marketing objectives, a critical step in proper allocation of funds for optimal effectiveness.

Lastly, most pharma companies are woefully inadequate in appreciating and measuring Brand equity, an absolutely crucial aspect of marketing in any vertical and especially pharma. The failure to measure brand equity and the contribution of various emotional and functional factors to brand equity is especially disappointing in pharma because of the relative ease with which one can link attitudes and behaviors, a critical contributor in enhancing the effectiveness of the brand’s messaging.

ER. I think the answer lies in looking at some new metrics – ones that are a truer reflection of marketing effectiveness. Many, if not most, current tools simply ‘count’ past outcomes – such as the number of prescriptions written or the number of doctors who remember a message. But that does little to get at the real value of a marketing program. Our research shows that even doctors who are high prescribers of a brand may be easily persuaded to defect tomorrow, if a new competitor or even a new promotional program were to come along. In fact, studies prove that, in many major classes, up to 50 percent of high prescribers could be converted to a competitor. So just counting past scripts is not a real measure of long-term value or ROI.

For that reason, we’ve started to look at relationship metrics that build Brand Commitment as a more accurate measure of the value marketing and sales activities deliver. Why? Rather than counting up the past, Brand Commitment predicts and impacts the future. Committed physicians deliver more than double the patient share, are up to five times more productive, are highly resistant to competitive efforts and have lower price sensitivity. They not only deliver greater share today – they keep that share constant over time. Therefore, measuring how effectively a marketing program builds Commitment is a strong demonstration of its value and its ability to deliver ROI, today and into the future.

Research that reveals the combination of brand attributes and marketing elements that drive Commitment can help companies design programs that have a measurable impact on prescribing. Those efforts can then be tracked over time to ensure continued effectiveness.

NGP. E-detailing is currently under consideration by many pharmaceutical companies as a way to maximise sales force time, cut costs and increase physician prescribing. How is e-detailing increasing sales force effectiveness?

GW. E-detailing should be seen from the eyes of the customer, in this case the physician. Rather than be viewed as a cost savings option for the pharma company, it actually is a manifestation of a trend seen in marketing across all verticals. This trend is broadly described as ‘permission-based’ marketing, the delivery of a marketing message when and how the customer gives the marketer permission to offer a message.

Given the information consumption habits of many physicians and the time management issues they face, e-detailing represents at least as great an advantage to the physician as to the pharma company. Plus e-detailing offers pharma some potential advantages in information presentation via immediate real time access to other web based assets that may be less readily available in a conventional call or, more importantly, offer the pharma e-detailer a more engaged and attentive customer.

Overall, e-detailing is one of the more felicitous developments in pharma marketing because of the advantages it offers physician and pharma marketers. The mastery of e-detailing should receive high priority on the marketing capability agendas of pharma companies.

JK. The ability of an e-communication vehicle to accentuate what the sales rep is doing every day is the real power of this medium. The big problem we have found with the perception and adoption of this tool is in the semantics. When you say “e-detail” it threatens the sales force and the sales management because it is perceived as a replacement for their efforts. Additionally, the connotation of “detail” doesn’t necessarily make it attractive to physicians either. But when you boil it down to the basics of what these tools are, you realize at its core it is simply an effective, efficient way to communicate a message to someone who is surprisingly quite receptive to that message in this manner.

We have conducted programs and have seen plenty of analysis that clearly demonstrates there is a preference for this type of communication among clinicians. Why? Because that’s how we all communicate now, it is an integral part of how we as a society now function. When you see that a physician who would barely give a sales rep 18 seconds in the office completes a 12 minute program later in the evening, likely from home, you realize how effective the medium has become. Furthermore, the ability to track this activity and link it to the impact on product choices or Rx scripts makes this even more valuable from an accountability and ROI standpoint.

But keep in mind that regardless of what you call it, e-communication has to be part of an integrated communications plan. The best programs include the sales force, reinforcing their efforts and providing them with additional value they can deliver in the 18 seconds they have. It also provides significant, relevant exposure to the clinical and benefit messages we all try so hard to deliver on many other fronts.

Additionally, the onus is still on the content and the message to ensure it is credible, relevant and important to the person viewing it. Like all communication, if it isn’t a compelling message targeted at the right recipient, the vehicle in which it is delivered becomes irrelevant.

ER. E-detailing is an added access tool that gives pharma companies another way to reach physicians. With physicians increasingly resistant to giving reps access, it can be very useful in providing another avenue into the doctor’s office. Even if a rep is getting in to see the doctor, e-detailing can be an important way to augment those efforts.

Consider that a recent Columbia University study finds that it can take up to 6.5 additional visits to gain just one new prescription. In many instances, e-detailing can be a more cost effective way to achieve the frequency need to drive scripts.

As I mentioned above, however, the right mix of sales experiences will vary by physician. Companies need to look at the full range of ways physicians interact with a brand – with e-detailing as just one of those elements – and determine the right set of experiences for each individual doctor.

Understanding the complete ‘experience mix’ is critical to sales effectiveness. Doctors define relationships in terms of the full range of experiences that companies provide – not just e-detailing and rep interactions buts also patient education programs, communications services, practice management support and all the other ways physicians engage with a brand. A recent TNS Healthcare study shows that the most influential aspects of the doctor’s experience with a company address the relationship. To be successful, companies need to ask physicians what they want and understand individual preferences – and then deliver the total experience that’s best for each doctor.

NGP. The mass marketing to consumers of pharmaceuticals is controversial, but despite this expenditures on direct-to-consumer (DTC) pharmaceutical advertising have risen sharply in the last few years. How can marketing departments sidestep the controversy to provide accurate, safe product information direct to patients?

JK. There should never be controversy in providing accurate, safe product information to anyone: clinicians, patients or consumers. That should be inherent in everything we do. But assuming accurate and safe information from responsible marketers, then the question becomes how much information is enough, or when does it get to be too much for the consumer to understand outside of their physicians or clinician? Can a TV ad or page in Ladies Home Journal deliver the necessary level of depth? Of course not. Can it pique somebody’s interest to find out more via the internet or their own physician? Of course it can. And is there anything wrong with that?

We live in a time where we all have access to enormous amounts of information that we never had before [some good, some not so good]. Health and medicine has been in the forefront of that quest for knowledge. The vast majority of physicians we deal with every day admit that they enjoy a more knowledgeable, well-informed patient. A while back, when the trend towards DTC started, this wasn’t always the case. There was a pervasive attitude that the physician’s role and responsibility was being minimized or challenged But we’ve seen that they have adopted, know it is part of the world out there, and in many cases use it to their advantage to educate and inform their patients about their own treatment.

For this reason, the advice we give our clients and the manner in which we execute any DTC/DTP program is to treat the clinician as the expert, to be sure that any communication reinforces the basic premise that only your physician knows what course of treatment is best for you. If that is a foundation of the communication, then there should be no controversy about continuing to keep an increasingly well-informed consumer aware of information that could be very useful to him or her.

ER. In 2005, according to our TNS Media Intelligence data, DTC spend topped US$4.65 billion – a slight increase from the US$4.44 billion spent in 2004. That level of spend indicates that the industry is still committed to DTC as a marketing tool, even in the face of increasing controversy.

I think good research is one of the major tools pharma companies have to ensure they are providing safe and accurate information to consumers. Messages can – and should – be thoroughly tested before they break to ensure they are understandable and clear to target audiences, and consumers comprehend both the benefits and the risks. In addition, research with physicians on the product requests and questions they are getting from patients after a campaign breaks can confirm that the right consumers are getting the message…that they are understanding it…and that they are making appropriate brand requests.

We don’t really need to debate whether DTC is appropriate or not. Through research, we can know for sure how well ads are communicating – and what result they are having in physicians’ offices. Companies can protect themselves against controversy, if they have objective information that proves the ads are helping bring the right patients into doctors’ offices and that patients are recalling the safety messages

In addition, companies can help themselves by ensuring their consumer campaigns are integrated with their physician messages. Keeping physicians informed about what’s being presented to consumers, so they are prepared to anticipate questions and provide accurate answers is critical to effective communications strategies. Also, providing physicians with patient education materials that help them address the issues that DTC ads can raise – and guide patients to appropriate treatments – can be an important way to ensure messages are being clearly understood.

Even in the age of DTC, doctors remain the ultimate decision makers – and can be your greatest ally in ensuring consumers are adequately and accurately informed. Bringing doctors into the communications process – and arming them with the materials to help patients who come in to their offices as a result of a DTC ad – is key to responsible DTC efforts.

GW. Short of lying in the advertising or using distasteful presentational techniques, the industry has little or nothing for which to apologize. We live in a society where freedom of information and choice are critical elements contributing to the quality of life. Providing information to consumers – especially information that may literally save a life or dramatically improve the quality of life – is prima facie good, not bad, and the industry should stop apologizing for it.

The industry needs to understand that it can never please everyone especially its most malevolent critics. It should also understand that reasonable people can disagree about the wisdom of this or that policy. In the final analysis, however, the industry must ask itself whether it believes in providing information to patients or not, whether it believes this information does more good than harm to the health and well being of individual patients and society as a whole. The answers are clear: information is good and the availability of that information has unquestionably helped patients.

Overall sound reasons exist for DTC advertising, reasons that were eloquently articulated when DTC advertising was originally approved by Congress. Those reasons were good then and, given the number of patients who have been alerted to superior health alternatives, are even better today.

NGP. Some commentators have noticed a shift in strategic focus amongst marketing departments recently, from customer acquisition to building brand loyalty. What strategies are being used to build brand awareness, and what challenges do pharma marketers face in this regard?

ER. I’d agree that effective marketing is about more than just acquiring customers. It’s about keeping them and optimizing their long-term value. With that goal in mind, standard measures of ‘loyalty’ aren’t enough. For companies to ensure they have built the deep relationships that maintain customers over time, we believe Brand Commitment is the preferred strategy for optimizing not just brand awareness but brand performance.

During the early phases of a product’s life, Brand Commitment – which assesses the total relationship between physicians and a brand – allows companies to anticipate and impact future prescribing. During the later stages of a brand’s life, it reduces ‘switch risk’ and maintains brand health and vitality.

In moving from a simple acquisition strategy to a Commitment strategy, companies face a host of challenges. First, they need to diagnose what their exact problem areas are – and that means looking at the full spectrum of possibilities, including both brand equity factors (such as awareness, recall, usage, SWOT analyses and emotional and rational positioning) and market equity factors (such as targeting strategies, patient segmentations, sales force performance, service and training portfolios, access and affordability). Only by assessing this full range of elements – what we call their ‘power in the mind’ and their ‘power in the market’ – can they truly identify and size their challenges.

Once they’ve identified their problem areas, they need to drill down and implement specific solutions – and then continuously measure those solutions to ensure they are delivering results and building the Commitment that drives prescribing. Part of that solutions process needs to involve attaching ROI measures to ensure that they are earning the highest payback on each element of their marketing spend. An optimum resource allocation strategy is key. Companies must be sure they determine the right frequency and types of activities – and the right spend level – against each of their target audiences.

Central to moving from simply acquiring customers to building lasting Commitment is the ability to transition from process-centric to physician centric strategies. That means adopting not just simple awareness metrics but also relationship metrics – and pushing them down through the organization to ensure they are acted on by the front lines, including the salespeople who market to physicians every day. It also means fully understanding physician preferences for how they receive messages – and working to deliver those preferred experiences. Finally, it means ensuring there is accountability for managing relationships and building Commitment that extends from the home office on down. As I’ve mentioned, Commitment not only more than doubles patient share, it maintains that high share over time. So it’s essential that Commitment is a focused strategy throughout the organization.

GW. Marketing has three responsibilities, helping to make the annual budget goal, learning more about consumers and building brand equity. Of the three, the last, building brand equity is of most value to the corporation and its shareholders long term even though the other two are joined at the hip with brand equity.

Unfortunately, many pharma marketers are not focused on brand equity, do not understand it or measure it. A dead giveaway is the penchant some pharma marketers have for referring to the brand as ‘the molecule’. Please, it’s more than a molecule; it’s a brand that inspires hopes and dreams, quells fears and suffering, etc.

Pharma marketers on the whole need to be much more aggressive in enhancing their capability to build brand equity because that equity leads to increased brand loyalty which in turn translates to profitability. Nothing is clearer than that the stronger brand equity, the higher the share of Rx.

JK. Healthcare marketing will continue on its path towards being more consumer-like in its approach and it’s messaging. And I am not referring to DTC communication. This is reference to the cluttered communication world out there and the growing realization that you have to strike a chord with healthcare professionals on an emotional, heartfelt level as well as on an intellectual and clinical level.

Brand awareness and brand loyalty have been staples of consumer marketing for decades, we can all be defined by the brands we use and advocate. But for years we in the healthcare arena avoided those types of marketing descriptions because our product choices were made solely for clinical and intellectual reasons. So it is no surprise to me that as the clinical world becomes more competitive and cost-conscious with less distinct product differentiation, we find ourselves fighting for brand loyalty as if physicians are consumers…because they are. This statement is not meant to diminish the intellect or clinical prowess of a physician or a product, it simply points out that the products we all market are done in a much more competitive brand environment than existed 20 years ago.

And when you take into account that the pace of truly new innovative products has slowed considerably, building and maintaining loyalty to a product that is on par with another is critical for that product’s success. The sales and marketing teams we work with are acutely aware of how important it is to keep the customers they have, because given the cost and energy necessary to find new customers to replace those that are lost, losing loyalty is not a desirable option for anyone.