BUSINESS

Beyond the Blockbuster: Using BI for Better Sales in Pharma

May 31, 2006

With $700 billion in global drug sales expected by the year 2008, the future for pharma may seem anything but bleak.¹ But in spite of continued growth and high profits, overall margins have been declining over the last decade. And the downward trend is leading many executives to re-think their business models.

"Pressure from investors, buyers, regulators, doctors and patients is already forcing the world's leading drugmakers to question the way they do business," writes Shereen El Feki in The Economist.² The result may be less big pharma and more diversification in the years ahead.

Source: "Devil in the Detail," The Economist print edition, Jun. 16, 2005.

Blockbuster drugs (those that generate annual sales of at least of $1 billion) will continue to drive growth, writes Fortune's John Simons. But over the longer term, he writes, "the industry faces a difficult transition from its tried-and-true formula of mass-market medicines to more elegant biotech drugs, which are derived from genetic research and tailored to smaller, more targeted groups of patients."³

This new order of business doesn't support the traditional push model of selling, which focuses on blitz-style marketing and high-gloss TV ads. Instead, pharma companies will need to reach discrete, targeted markets through focused initiatives driven by consumer information and knowledge.

Understand the consumer

This trend is already underway. Alana Klein writes in Pharmaceutical Executive that she is seeing a "new level of refinement in strategy and sophistication in execution" as advertisers get smarter at targeting their audience. GSW Worldwide, for example, did its research to develop ads on the pain associated with gout, something all sufferers could relate to. Wunderman and MBC asked breast cancer survivors to share their experiences, which became the basis for a sophisticated educational campaign.⁴

For targeted marketing to work, companies have to do their homework. Market research plays a role. But a wealth of consumer information also resides in CRM, ERP, and other systems – clinical trial data, purchase patterns, satisfaction levels, sales trends, and so on.

Business intelligence consolidates and leverages this data to provide an integrated view of the market. Who is most likely to buy which drugs? Why? Who are the best customers and how do you attract more of them? These insights into consumer needs, trends, and patterns, helps pharma companies define more effective ads, promotions, and marketing campaigns.

Refine the sales process

"Drug companies have a powerful incentive to drive sales as hard as they can," writes The Economist. "Their patents are filed early in development and are being squeezed at both ends. Precious time is eaten up in clinical trials before the drugs come to market, and afterwards generic companies pile in."⁵

Sales reps are also pressed for time. With the average sales visit lasting a mere three minutes, reps need to make the most of every opportunity. They need a clear-eyed picture of the market to maximize their selling effectiveness. But siloed data sources often mean piecemeal access to consumer and business information. And instead of selling, reps can spend ages trying to find answers.

Source: "Devil in the Detail," The Economist print edition, Jun. 16, 2005.

Consolidate all data

Missed opportunities create a natural opportunity for business intelligence. Instead of scattered and inconsistent data, reps can access a commonly shared and centrally located platform that consolidates all customer, product, and marketing information that helps them prepare for their sales calls. For example, a rep can view a list of local doctors who are most likely to buy in the next quarter, based on their past purchase patterns. Managers can track sample usage at the national level to drive better results. And R&D reports can update sales on the product pipeline, such as the progress of a new compound as it enters Phase III. In each case, these reports can be delivered automatically and accessed over the Web, so everyone works with the most recent and most accurate information.

Track results

Is the direct-to-consumer TV campaign working? Are sales up or down? Metrics offer a way to track the results of selling initiatives across the organization. Scorecards and dashboards allow people to monitor things like total exposures, response rates, call center activity, and consumer satisfaction. They see how the organization is performing in terms of advertising and marketing. They can measure the cost of programs versus the revenue they produce, and which promotions have the biggest or least impact on sales. When results don't measure up, new approaches can be taken to improve campaigns.

On the sales front, metrics allow managers to monitor national, regional, territory, and product performance. What are the top sales by product, city, region, or country? Who are the top sales reps? Armed with this information, they can re-allocate resources to maximize opportunities. And employees can view and understand their performance against key indicators like sales, growth, and market share versus call activity, reach, frequency, and sales expenses.

Summary

Pharma is undergoing a transition in sales and marketing, as companies look to smaller, more targeted consumer-driven initiatives. Business intelligence can help businesses translate valuable consumer information into more effective campaigns that will resonate with customers and make the most of sales time and resources.