Pharmaceutical companies spend considerable sums on marketing to drive growth of their brands. Few, however, take time to thoroughly understand the strengths and weaknesses of their approach. As channels to market become more complex, and pricing and access challenges impede product uptake, excellent marketing is more important than ever for commercial success. Companies must therefore critically challenge their marketing plans and apply a level of rigour to brand reviews that is similar to that applied to R&D initiatives.
The pharmaceutical industry makes significant investments in R&D to develop medicines that improve the lives of millions around the world. These investments receive significant scrutiny from both investors and top management. However, the resulting new medicines will not get to the patients that need them because of good science alone. Strong marketing is necessary in order to communicate the patient benefits in a way that is compelling to healthcare professionals.
In contrast to the analytical rigour and drive for efficiency that is applied to R&D, only a small number of companies invest to understand the impact of their marketing approach. Novasecta’s experience in helping companies to improve the impact of their strategic marketing shows that much of the investment is deployed sub-optimally: less than a third of companies adopt a rigorous and systematic approach to assessing the impact of their marketing spend. The implication is that much of the marketing investment is spent without a clear understanding of its contribution to success. For executives, investors and employees this should be a concern, as there will be significant opportunities to improve marketing and deliver results from those improvements.
Beware the echo chamber
Unlike in other sectors, it can be extremely challenging for pharmaceutical companies to link sales and marketing activities directly to revenue generation. So proxy measures are frequently used as surrogates for sales performance. For sales teams, this can mean scrutiny of call quality, coverage and frequency metrics. However a similar metric-driven approach to marketing is rarely applied beyond launch. This can present a significant issue, as what the sales teams are saying to customers should be informed and shaped by marketing. Instead, marketing performance is often discussed and graded more subjectively. This creates a risk that what one sees depends on individual perspective, and that of colleagues, all of whom frequently have a vested interest in reinforcing the status quo. This ‘echo chamber’ can reinforce poor behaviours and limit the potential for improvements in brand performance.
Foster objective voices in the organisation
Despite similar levels of investment, the relative performance of marketing teams across different companies, or indeed of affiliates within a company, can be highly variable. Global franchises and standardised frameworks can support a more consistent approach, but they are insufficient to convey a distinct competitive advantage or to highlight the elements of marketing investment that are driving success in individual markets. Partnering with a well-equipped marketing excellence function is therefore critical for brand success, especially at the affiliate level.
Most companies operate an annual review cycle where senior leaders appraise plans. The danger is that this becomes little more than a “tick-box” exercise to agree funding, rather than a fundamental assessment of performance and intended future investments. The most successful organisations embrace annual reviews as an opportunity to drive critical thinking and appraisal of plans, identify and test exceptional ideas, and make interventions that accelerate growth. Powerful reviews start with creating the right environment, where objectivity reigns, with the goal firmly focused on identification of improvement areas, rather the allocation of blame for any shortcomings.
Brand leaders themselves must be open to scrutiny before subsequently seeking to understand where growth opportunities lie. This can be achieved through asking the right questions of their teams in order to drive honest conversations around performance, rather than taking a perfunctory glance before approval. As one senior executive told us:
“I seek out bad news, as it is usually where you find what can be improved most quickly – but what I normally get are the sunny highlights and successes”
Return on marketing investment can be substantially improved by seeking a deep, objective, external assessment of marketing and commercial activities: through benchmarking to industry standards, peer comparison and analytic assessment against validated frameworks, companies can identify priority opportunities for excellence in commercialisation.
Get to grips with what works
Marketing in the pharmaceutical industry grew from some of the same principles established in fast moving consumer goods (FMCG) sector. Here, a metric of success is required is a pre-requisite of funds being granted – without it, investment is not made. Experimentation, measurement and ruthless elimination of low-return approaches are second nature to consumer marketers: activities that don’t generate value are quickly terminated and funds re-deployed elsewhere. Similar, measurement-heavy, approaches are uncommon in the pharmaceutical industry.
External marketing audits are also commonplace in the FMCG arena. An external perspective is valued both to validate that commercial investments are likely to deliver as expected, and to highlight remaining opportunities for improvement. Interestingly, despite substantial marketing investments and high commercial stakes, commercial auditing remains uncommon in the pharmaceutical industry with the notable exception of the sales force channel.
A complete marketing audit can systematically evaluate the totality of a marketing operation: its structure, capabilities, strategic activities, objectives and plans. Such an activity can identify where and how performance improvements can be made even for high-performing brands, and how precious resources can be most efficiently deployed. To be truly valuable, any attempt at auditing must be independent and use a reproducible methodology. Ideally, it should also be repeated on a regular basis to track progression against internal and external benchmarks.
Find the courage to look in the mirror
The majority of leaders are open to learning about opportunities for generating growth, but for some the idea of an external review of their team’s marketing is a step too far. For others, the process is cathartic – offering reassurance that the focus and efforts of the organisation’s team are aligned with the realities of the market and exhibit a strong level of quality and thoughtfulness, all the while fostering an ethos of continuous improvement.
Perhaps more so than any other leadership attribute, a mind-set of continuous improvement – of acknowledging that no matter how good one is, or how much effort one applies, there is always room for improvement – is highly correlated with reproducible excellent commercial outcomes. This could not be more true or important for pharmaceutical marketers. Notably, setting out on this kind of introspective activity requires managing the culture and mentality of the team, so that they see the project as a helpful opportunity to gain perspective and a chance to improve, rather than an exercise in attributing blame for any uncovered weaknesses.
Novasecta regularly helps clients to identify opportunities for growth by applying our proprietary ‘Brand Compass’ methodology through the systematic assessment of brand plans. This supports existing marketing activity by providing an external, peer comparison that companies cannot achieve alone.
For greater success and continual improvement, marketing teams must:
1. Beware the Echo Chamber: Acknowledge the risk of organisational group-think and seek external perspectives on current marketing practice.
2. Foster Objective voices in the Organisation: Encourage constructive dissent and creativity with marketing plans by seeking inspiration from inside and outside
3. Get to Grips with what Works: Invest in systematically understanding the strategy and tactics that are central to each brands's successful growth
4. Find the Courage to Look in the Mirror: Identify key elements holding back brand performance and develop a road map to build excellence in those capabilities
Commercial leaders have a duty to leave no stone uncovered in the search for growth, particularly as the competitive intensity of the pharmaceutical market intensifies. This dynamic is likely to be exacerbated by the long-running decline in the industry’s R&D productivity. To start, leaders must become aware of existing shortcomings in the brand planning process and have the courage to take a fresh, objective view of activity. An external, peer based review enables true growth levers to be identified and subsequent growth achieved. Leaders with this approach are those that are seeing the greatest gains in the shortest amount of time.
Find out more at: novasecta.com
Last updated on: 17/10/2016 08:00:38
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