Not long ago Capgemini Consulting met with a pharma executive who explained that his firm had recently put in place a Closed Loop Marketing, or CLM, program, with lackluster results. Though the program had taken many months to implement and came at a sizeable investment, the overall impact had been minimal. In terms of ROI, the best he could offer was that most members of the field sales team were actually using their iPads when meeting with physicians.
This is not the first time we have heard a story like this. For many pharma companies, the reality of CLM has not lived up to its initial hype. Across the industry, some high-profile programs have failed to deliver on even their most basic objectives. Why is that? Wasn’t CLM supposed to be the next big thing for pharma? Truth be told, it doesn’t have to be this way. Some companies have seen good results, and we’ll explain why.
Upon closer inspection, the company cited above did not really implement a true CLM program. Their program may be using tablets to deliver digital content to physicians, but it’s recycling the same collateral that was previously delivered in print, reformatted for the new devices. What’s more, content updates were still being done according to the existing plan of action (POA) cycle, or once per year. Far from an indictment of CLM, this example instead highlights myriad missed opportunities for pharma when it comes to CLM; it also offers a compelling explanation why CLM has, in many cases, failed to deliver on much of its promise.
A major reason for poor performance is a general misperception of what CLM actually is. For many in the industry, the term CLM is now used interchangeably with tablet detailing. The root of this is the unprecedented success pharma has experienced when it comes to equipping their sales teams with tablets. We use the term “unprecedented” because, in many respects, this was an unusual example of pharma being an early adopter of something. This year, iPad penetration among pharma sales representatives is expected to exceed 85%. Suffice it to say: in this area pharma has been an early mover.
What’s especially interesting about tablet adoption in pharma is the primary motivation behind the trend. It’s well documented that pharma has struggled to provide much value to their field force (or physicians, for that matter) for quite some time. Given this background, adopting iPads is more a result of pharma being desperate to provide something of value to impatient stakeholders, than is it a bellwether of the industry suddenly embracing its inner Steve Jobs.
iPads aside, when it comes to embracing the latest digital technologies and practices pharma has been and remains a laggard relative to other industries. Research that Capgemini has coordinated supports this conclusion. Over the past three years, we have conducted a high-profile, three-year collaboration with the MIT Center for Digital Business to research how companies are managing and benefiting from Digital Transformation. The study includes an in-depth assessment of 157 leading firms across numerous industries, including 23 pharma companies.
One of the outputs was a digital maturity model to show how different companies react to technological change and innovation. This model assesses digital intensity, the overall level of investment in technology, along with transformation management intensity, the investment in leadership capabilities and strategy to lead digital transformation. Among other things, the study has demonstrated that the higher a company’s overall level of digital maturity, the better its financial performance is likely to be.
The study has shown that pharma is less digitally mature, lags behind other sectors and has been generally slow to react to technological change. When investments have been made, they have been done on an ad hoc basis and without a coordinated strategy or company-wide approach. As a result, success in pharma, relative to other industries has been uneven as investments have been made without a clear understanding of how to maximize on their business benefits.
Not surprisingly then, even among pharma firms who have adopted tablets, implementation has often been absent a holistic strategy and consequently, anything but smooth. A recent physician survey run by Capgemini Consulting/QuantiaMD found that while tablet detailing is widespread, frequency of use by representatives varies dramatically, ranging from 75% of office visits down to 25%. Surprisingly, almost half of respondents haven’t the foggiest clue how many of their reps were using the tablet to give presentations or how often.
Part of the issue is a poor understanding of what CLM really is. While it is beyond debate that tablet detailing is far and away the most common use of CLM in pharma, Closed Loop Marketing has a much broader meaning that is routinely overlooked in the industry. CLM should actually refer to personalized, feedback-driven communication between marketers and their customers. This communication can take place using any medium or channel, traditional or new, analog or interactive.
CLM is based on the premise that, in the ideal world, commercial campaigns should be deployed using a one-to-one approach, sending customers personalized promotional materials based on their preferences, behaviors and attitudes. Ultimately, it is the goal of CLM to send the right customers, the right messages via the right channels.
Over the past few years, Capgemini Consulting has helped more than 50 brands launch successful Closed Loop Marketing programs. In our experience, the success a firm enjoys—and the ROI they will eventually achieve—ultimately boils down to their overall strategy, which is based on three main pillars:
1. Personalization: Giving the customer a personalized message.
2. Analytics: Learning from what the customer tells you.
3. Responsiveness: Evolving the conversation to prove you were listening.
Presenting customers with personalized content is the main objective of any CLM program. Personalization means developing content that is customized or unique to the customer—enough so that customers feel it meets their needs. A personalization approach deploys variable content to customer profiles, using customer segmentation as the primary driver, but also leveraging customer engagement and channel preference data.
What personalization amounts to is that people want to receive information that is relevant to them and their experience as customers. This does not mean that a company must build individualized strategies and assets for each customer—that would be impossible and impractical, even with today’s digital technologies. Personalization means sending people content that is relevant to them based on their beliefs, attitudes and preferences.
Knowing the customer means dividing customers into meaningful groups or segments that can be used to determine who gets what message based on preferences, demographic and psychographic information shared by the group. We realize that the term “segmentation” is often viewed as a controversial word in pharma—which is ridiculous because other industries have been developing and using robust segmentation models for years with great success. The irony is that distrust of segmentation in pharma stems from decades of applying the wrong kind of segmentation in the first place.
The right kind of segmentation means letting customers tell you about themselves, rather than simply telling them what you think they should hear. Meaningful segmentation looks at more than simply a customer’s specialty or prescribing history, and instead considers what motivates the physician to get out of bed and come to the office each day. Done this way, segmentation is something the customer might feel comfortable wearing.
Motivation varies widely for different types of customers. For example, doctors with a scientific bent may be interested in clinical data and emerging pharma technologies. Some doctors may be driven by their desire to save or improve lives, while others may have an entrepreneurial perspective and be financially motivated. Identifying, validating and understanding these profiles are the key.
Personalization works because when physicians have been given product messaging that they feel is unique or relevant to them using the right channels, they report improved satisfaction and engagement, and ultimately prescribe more. Study after study has shown that delivering personalized, customer-centric content can increase market responsiveness and messaging while decreasing promotional spend.
Capgemini Consulting is in the process of conducting research on the impact of personalization on the pharma sales process. Thus far, our research has identified three separate examples of pharma companies, comprising more than 40 distinct brands, which launched CLM programs with a strong personalized content strategy. What’s interesting is that in all three cases the result was a lift of 15% NRx or better (sometimes much better), and with a sustained duration. Remarkably, this was true across primary care and multiple different specialties. It included brands in all stages of their lifecycle: launch, mid- and late-stage, and even LOE.
The key to this study was that in all three cases the customer received highly-segmented digital content. Customer segmentation had been developed based on customer attitudes and behaviors, and the programs included three to four differentiated presentations per product specifically aligned to physician needs. Sales rep and customer feedback were leveraged to generate rapid content updates and improvements, and analysis of CLM data was used to identify messages most likely to drive prescriptions.
It is our belief that this approach works because it delivers customers content they believe is unique to them, and is delivered to them in the way they want to receive it, resulting in increased responsiveness and customer satisfaction. And although we can’t yet prove it with data, we strongly believe this approach also works because it empowers the sales rep. Believing the content is unique to the customer, the rep thus feels like he/she is providing real value to the physician, and is more engaged, enthusiastic and effective as a result.
That’s it for now. Look forward to more about the other two pillars, analytics and responsiveness, in subsequent editions of PM360’s Panorama. In the meantime, if you have any questions please feel free to contact us.