Over the last decade, several trends have impacted the life science industry. The most notable changes have occurred in the behaviours of healthcare providers (HCPs), and their feelings towards the industry and pharmaceutical sales reps (PSRs).
Face-to-face trust-based relationships are very important for pharma sales and marketing success, but HCPs are increasingly inaccessible for in-person sales presentations. Worse still, many HCPs distrust the sales content and communications that they receive from pharma.
Today we explore what this means for the pharma industry, and how pharma can turn the tables on these trends.
Click Here to learn more about the declining access to healthcare professionals.
Click Here to learn more about the declining trust among healthcare professionals.
The Impact of Declining Trust and Access
There was a time (Q1, 2009) when over 80% of HCPs were considered ‘accessible’. This meant that pharma sales reps were able to plan a daily route, come into a practice, present a variety of sales materials and samples, and have an in-person discussion about medical treatments available from their company.
This has changed drastically, but the costs associated with selling and marketing to HCPs has not.
Consider this,
- Accessible prescribers have declined to 47% of the population (Source: ZS Associated, 2015);
- Average sales and marketing costs for a pharma company are 27.5% of revenues (Source: Accenture, 2013); and
- Average R&D costs only account for 16% of revenues (Source: Accenture, 2013).
(Image Source: Market Realist, 2016)
Over 150 drugs are expected to lose their patent protection in the next 10 years, and a growing majority of new treatments are coming from the category of specialty medicines – which are costly to produce and administer, more complex to sell, and increasingly difficult to communicate.
(Image Source: PWC, 2014)
The traditional pharma sales and marketing approach - with a large-scale in-person sales process - simply won’t work for much longer.
The costs are too high, the expectations have shifted, and the mediums have evolved.
What is Pharma Doing to Accommodate the Shifts?
In 2013, Accenture conducted a study of 200 executives from pharma firms with annual revenues of $1 billion or more, and whose functions included marketing, sales, analytics, and commercial services.
The study revealed 3 top priorities for the industry,
- Reduce costs
- Master multichannel marketing
- Improve digital sales effectiveness
Priorities 2 and 3 will be discussed in-depth in future articles.
Priority #1. Reducing Costs
A whopping 83% of pharma executives have stated that reducing costs is a top priority, and this makes sense considering the trends noted above.
The need to control costs and restructure the sales process is much more than a sudden realization, as 30% of these executives stated that they expect a budget reduction of at least 15%, with many noting a 13% reduction in sales force size, and over 25% reduction over the next two years.
Executives have stated that they intend on reducing costs with three key strategies.
1. Improve the use of analytics to help achieve strong ROI
Right now, marketing and sales analytics software use retrospective insights through anecdotal details updated in a pharma CRM software platform. Meanwhile 48% of marketers admit to only using basic levels of insights, and 17% revealed that they use no effectiveness insights (Source: Hubspot, 2014).
Analytics benefit the sales process in several ways, including
- Pushing conversion responsibility further downstream;
- Cutting costs with pharma sales and marketing alignment;
- Improving the accuracy of targeting and segmenting; and
- Increasing digital content effectiveness.
Unlocking analytics requires closed loop marketing integration with the pharma CRM system, marketing automation, and pharma sales enablement.
For this reason, it’s easy to see why 92% of pharma executives plan on using a third party provider for their analytics needs.
As digital sales and marketing becomes increasingly complex, 3rd party providers offer comprehensive API integrations and daily updates which address the growing complexity of platform integration. It is increasingly costly for an in-house platform – created by pharma or otherwise – to compete with specialized platforms that do this as their primary business.
As digital sales and marketing becomes increasingly complex, 3rd party providers offer comprehensive API integrations and daily updates that address the growing complexity of platform integration. It is increasingly costly for an in-house platform – created by pharma or otherwise – to compete with specialized platforms that do this as their primary business.
2. Improve digital and multichannel reach
Digital sales and marketing interactions are more cost effective than traditional sources. They can be tracked through behavioural analytics, and they enable strong targeting and personalization.
This is probably the reason why 83% of pharma executives intend on improving the use of digital content and multichannel reach for cost savings.
An important consideration for effective multi-channel reach is the ability to be ‘device agnostic’ in your targeting. This means that you have omni-channel functionality on any device, and any operating system, with any content.
The more reach you have with one single content piece, the greater the cost savings.
3. Using 3rd party applications
Although a majority of pharma executives have already shared their intentions to use a 3rd party vendor for analytics and multichannel cost-saving tactics, 72% of executives intend to directly use the outside vendors as a means of controlling costs across the entire value chain.
77% already use some 3rd party technology to augment sales and marketing, and of those, 37% plan on increasing their use of 3rd party platforms.
What are Third Party Suppliers?
For sales and marketing (the target of the cost-savings approaches) there are two main categories of 3rd party solutions. These are known as the Sales Stack and the Martech mix.
Together these platforms integrate with pharma CRM software to create an end-to-end automation and a closed loop marketing stack.
The right balance of sales and marketing technology is context sensitive, but there are 5 foundational technologies that make up a ‘must-have’ sales stack mix.
Click Here to learn about the 5 must-have sales technologies in a sales stack.
This is the kind of solution we put in place at GSK. It effectively “doubled the amount of time spent with physicians.” Download our case study below to learn more.
If a 3rd party pharma sales enablement solution sounds like the right option for you, request a demo and let our team show you just how easy cost-controlled PSR engagement can be.
In our next article we’ll explore the remaining top 2 priorities for pharma executives, and the outcomes of end-to-end automation in healthcare.
