Everyone has some sort of malady — be it real or imagined, life-threatening or frivolous — that they wish there was a magic pill to cure.
Even the pharmaceutical business is looking for a cure-all discovery of its own to create long-lasting customer relationships.
“The days of new billion-dollar blockbuster drugs coming out five, six, seven times every year is not happening,” says Rob Deal, director of strategic business for Cary, NC-based MicroMass. “Over the last year there’s been one, maybe two really big brands coming out. They can’t pin their hopes on new drugs that will do wonderful things. They’ve got to go back to their existing customer base and make sure they’re happy and satisfied and I’m extracting the maximum value from them.”
Pharmaceutical companies are interested in CRM because of increased competition and investor expectations, agrees Michael Brooks, director of business development for Unica Corp, whose clients include Medco Health (formerly Merck-Medco).
Lincoln, MA-based Unica, in a partnership with PricewaterhouseCoopers subsidiary PwC Consulting, New York, works with a variety of healthcare clients, including pharmaceutical manufacturers, pharmacy benefits managers and insurers. Historically, most pharmaceutical firms judged their DM return on investment strictly by the number of prescriptions written, says Brooks, who has worked in the healthcare space for over 15 years. Today, companies are doing more database marketing to analyze and segment their customer bases.
Many sales force-led efforts are netting diminishing returns for pharmaceutical companies, he continues. The goal for many firms today is to find out what is the most effective way to communicate with their audience: direct marketing, mass-market advertising or through physicians.
“The Holy Grail of pharmaceutical marketing has always been persistence,” says Marc Schiller, partner/CRM pharmaceutical lead for PwC Consulting. “If you asked almost any pharma marketer if they’d rather have every single new prescription written, or just keep current ‘scripts on for 50% longer than they now stay on, they would all say keep current customers longer.”
About 99% of MicroMass’s clients are in the pharmaceutical space. The company works with established brands to develop programs to encourage retention (or persistence) for consumers who take a particular medication. Often, these are educational programs to help patients understand why a drug should be taken regularly as prescribed. This, Deal notes, ultimately means more prescriptions are filled, but it also helps the patient get the maximum benefit.
Deal says he sees CRM programs working for medications treating chronic conditions or “lifestyle” drugs, like weight-loss products. Areas where you typically won’t see CRM are things like cardiovascular disease, Alzheimer’s, MS, HIV, herpes or cancer, because people don’t want to receive reminders in the mail that they have those conditions.
Of course, finding patients to market to is the first hurdle for many pharmaceutical firms, says Deal. “The fact that they don’t know their buyers is a big problem. [They don’t know who has purchased] unless the patient raises their hand.”
Some pharma manufacturers work with pharmacies or pharmaceutical benefits management organizations to reach their intended target audiences. And while some patients might feel that the Web and e-mail are less private channels, the fact that it’s easy to use an alias online makes it easier for some with sensitive conditions to ask for information.
“Of course, that makes it more of a challenge for the pharma brand to validate the results of the program if they can’t figure out who you are and if you were influenced,” Deal notes.
PwC — whose clients include Pfizer, GlaxoSmithKline, Aventis, Novartis, Pharmacia and Johnson&Johnson — does about $500 million to $600 million in business with the pharmaceutical industry annually. Schiller says he’s seen substantial direct-to-consumer interest in CRM over the last few years, especially for niches where there is much competition, such as antidepression, gastrointestinal, allergies and cholesterol.
In the past, there was more of a focus on acquisition and conversion. Now, with the focus on retention, companies are trying to increase the length of time on therapy. Lead collection — from not only patients but spouses, family members and caretakers — is very important, Schiller says.
Campaigns are becoming truly multichannel, with DRTV spots featuring 800 numbers, follow-up direct mail and Web banners encouraging viewers to click through for more information, he notes. Of course, privacy concerns are paramount, thanks to “colossal” regulations, notably the Health Insurance Portability & Accountability Act, which stipulates pharmaceutical marketers must ask permission to collect and keep information in a database, and must always provide an opt-out.
John Hallick, CEO of CPM Marketing Group Inc., East Peoria, IL, notes that taking care with your message can help prevent many privacy problems.
“I think it’s how you write the copy. [You can’t say,] ‘We know who you are and you need to take this.’ It’s not quite that blatant,” says Hallick, whose firm recently extended its Consumer Healthcare Utilization Index (CHUI) segmentation system to the pharmaceutical industry.
“You have to craft the message in a non-personalized way even though the segment is in a high-risk area,” he says. “So it might be ‘Jane, females 20 to 25 are the most likely to exhibit this disease, or one in five Americans are going to do this…if you’re one of those individuals, this is something you might want to ask your doctor about.’ It’s meant to be informative and helpful.”
Scratching the Surface
Summers Labs begins to take advantage of the Web’s potential
FOR SMALLER PHARMACEUTICAL COMPANIES, splashy million-dollar print and television campaigns just aren’t an option. That’s where the economy of the Internet comes in.
Summers Labs markets over-the-counter medications for a variety of skin conditions, including acne, psoriasis, eczema and diaper rash. About 10% to 15% of its products are sold direct, notes president Mike Precopio. Price points are between $6.50 and $50, with most products in the $10 to $20 range.
The company went live with its Web site (www.sumlab.com) in August 2000. Developed with the help of Fried-Cassorla Communications, the site was not only another way for people to order products, but a means to educate them about the company’s product line as well.
Prior to the site, patients found out about Summers’ products through physician referrals. The company also did limited print advertising in specialty journals like the National Psoriasis Foundation Bulletin.
The ROI of the site was judged primarily by sales. In the next phase of the site’s development, Precopio will be looking to do more online advertising in the most cost-effective ways possible. Potential customers typically learn about the site through their dermatologists, and links have been placed on appropriate content sites, such as pediatricians’ pages. The company is also working on improving its position on keyword searches, and is experimenting with e-mail to previous customers, extending content and marketing offers.
The company maintains a database of 5,000 people who have ordered direct by phone or Web. Several hundred orders per month are currently received online, says Precopio, noting that even if no new customers are generated, the call center savings make the site worthwhile.
Precopio says collecting data on prospects and people who have inquired about products is the next step. Summers’ demographic target varies from product to product — for example, Derma Nail, for brittle nails, appeals primarily to peri- or post-menopausal women, the psoriasis remedies are “all over the board” and people of child-bearing age are the audience for Triple Paste Medicated Ointment, the diaper rash product.
Some lists of people with skin conditions are available, but the company’s experience with them has been “mixed at best,” says Precopio.
The company also maintains two physician databases — one of pediatricians and the other primarily of dermatologists — which each have about 10,000 names. More patients than doctors visit the Web site; physician visits are hard to encourage without costly incentives.
Summers doesn’t do direct mail right now, other than occasional mailings to alert physicians about price increases. A sampling program is a possibility, says Precopio.
Summers Labs was founded in 1895. The Collegeville, PA-based company was almost out of business when Precopio acquired its product lines in 1986. It’s been a constantly evolving business, he says. “It’s what I like to call a ‘get rich slow’ scheme.”
— BNV
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