Medicinal Benefits

Direct-to-consumer advertising has become a major tactic for pharmaceutical brand marketing, accounting for an estimated 12% of 2003's overall promotional spending, according to pharmaceutical market researchers IMS Health Inc.

Beyond the obvious examples such as Pfizer's Viagra and AstraZeneca's Nexium — consumer-driven drugs that lend themselves to mass marketing — there are numerous cases where DTC has affected brand performance even in less “consumer-friendly” disease states.

Note, for example, Procrit's dramatic success in building demand in the cancer anemia market through DRTV, or Novartis, which has used a multichannel strategy (Web/DRTV/direct marketing) to educate the market on irritable bowel syndrome and the attributes of Zelnorm. The result is that messaging drives prescription preference, physician-seeking behavior and, ultimately, market share.

Companies testing the DTC waters see consumer programs as a way to excel in highly competitive markets, where the battle to differentiate their products and brands is being waged through consumer awareness and a better understanding of diseases, their causes and prevention.

Customer relationship management, which started as an innovative tactic, must now evolve into a strategic capability. While CRM traditionally is employed by more consumer-focused industries such as financial services and telecommunications, there are a number of reasons why pharmaceutical companies should be considering it today.

First, pharmaceutical marketers now face the prospect of a long-term, multibillion-dollar DTC “arms race.” It's similar to the dramatic growth in the industry's sales force, which was characterized by more spending and less impact.

Indeed, a survey by the Food and Drug Administration's Office of Medical Policy showed there's evidence consumers will opt out of pharma marketing programs that don't seem relevant to them. Second — and perhaps most importantly — companies are missing out on significant financial opportunities by not placing more emphasis on compliance and persistence, which require long-term access and dialogue with consumers and patients.

Further, the industry's reliance on multiple agencies and functions to manage a myriad of marketing campaigns has resulted in a poorer understanding of customer needs and program performance. Add to this that companies are seeking to reap more value out of too few distinct and too many “me too” products, and the imperative for alternative, more efficient ways to drive market value becomes clear.

Much of the challenge marketers face resides in the historic reliance on mass DTC marketing — with its emphasis on television advertising — in contrast to the more targeted messaging strategies employed by marketing leaders in other industries. To move beyond the “arms race,” DMers must invest in consumer relationships to better understand and personalize their programs for consumers and patients. They need to focus on their practical ability to learn from program messaging, response and operations.

Fair Isaac Corp.'s research has shown, for example, that pharmaceutical marketing programs tend to be one-dimensional (just direct-to-patient) and unidirectional (outbound e-mail and direct mail) and do not produce meaningful data and insights over time that can be used to advance a program's accuracy and effectiveness. Companies need to get better at generating data through interactive methods that provide value to consumers (that is, patients) and physicians. They must evaluate the dynamics of patient-driven pull-through — essentially how and why patients are talking with their physicians — and how to support this dialogue.

These approaches suggest a view of marketing that focuses on an ongoing discourse with patients and results in enhanced knowledge about market needs and better services for customers.

What It Takes

Relationship management requires that marketers begin building actionable data about their customers. This typically entails sourcing lists based on targeted consumer profiles. Advanced segmentation strategies — such as cluster segmentation and experimental test-control design — need to be developed for these populations.

Such data-analysis approaches can aid marketers in working with and structuring information to support a program's goals and develop compelling promotions that ideally will build relationships with these people.

For example, the programs might focus on:

• Increasing customer acquisition and conversion through online interactive disease-management programs.

• Driving compliance and persistence through a combination of direct mail and in-office starter programs and call center services.

• Offering incentive-based requests to physicians for products using coupons, discount programs or other efforts that engage both doctors and patients.

A further objective of relationship management programs is to ensure consistent messaging across all channels, campaigns, brands and touch points. By leveraging customer data, common processes, operational platforms and staffing, pharmaceutical companies can achieve a more efficient marketing expenditure across the enterprise.

CRM provides the opportunity to develop an understanding of target markets based on customer behaviors, motivations and needs. This is a valuable commodity in highly competitive markets and therapeutic areas. It also enables companies to determine which customer segments are of the highest value, thus ensuring that investments can be targeted to yield the highest results.

For chronic disease areas and brands, relationship-building efforts can support programs that benefit from ongoing messaging and dialogue with patients. This kind of dialogue can help marketing efforts and messages will have greater relevance to customers based on their specific needs (such as where they are in a particular stage of a disease). Further, CRM can allow quick response to changing market dynamics such as new indications, competitors' actions or market entrants. It also can assist in reallocating resources to maximize performance in targeted markets.

The Challenges

There are three overarching challenges that must be considered and addressed to make CRM successful. The first is the regulatory guidelines regarding consumer data and marketing. It's critical that marketers and their medical/legal teams understand and agree on their approach to data management, consumer opt-in and communication/messaging as a set of policies to guide future programs. These policies obviously must tightly align with current FDA regulations and should establish how marketers can interact with consumers.

Second, DM firms shouldn't underestimate the importance of making sure their managers are able to get multiple functions (for example, sales, e-business, agencies/vendors, call centers, IT, business analytics) in synch with program strategies, goals and approaches.

Finally, marketers must work with their business analytics teams and leadership to agree on the measures for evaluating CRM return on investment. This is a key point of contention for some companies and can make or break a solid CRM strategy. A methodological approach to measuring short- and long-term marketing tactics will ensure that expectations can be evaluated at every stage. It also will allow a window into the optimal promotional mix for brands.

By establishing a dialogue with customers, pharmaceutical companies can benefit from higher response rates, more profitable customer relationships, improved compliance and healthier patients. As you begin to consider how CRM can benefit your organization, keep the following in mind:

• Cultivate brand and corporate relationship management strategies that facilitate consumer and patient education, physician pull-through, compliance and retention.

• Invest in having a cohesive message across all your marketing channels to ensure that targeted, segment-driven interactions get the right message to the right target at the right time.

• Identify the technical and data infrastructure required to build reliable views of the market and program response, and to support flexible, multichannel interactions.

• Ensure organizational understanding and alignment around the methodologies for effective CRM, campaign strategy and implementation.

• Develop capabilities for pre- and post-market analysis including predictive analytics, program design, and measurement approaches to evaluate your results.

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Jennifer Rigley (top; jrigley@fairisaac.com) and Deborah Furey (deborahfurey@fairisaac.com) are directors of healthcare practice at Fair Isaac Corp. in Minneapolis.