Viewpoint: One Way to Increase Customer Engagement
Pete Mehr, Principal, ZS Associates
Pharmaceutical marketers use significantly more channels to deliver messages to the marketplace—and for good reason: Consumers now use exponentially more digital channels when searching for information that ever before—from 50 million per year in 2000 to 139 million per month in 2015. In addition, physician access to pharma sales reps declined from 80 percent to 47 percent over a similar time period.
Both of these trends prompted marketers to expand the number of channels to deliver promotional messages in efforts to reach the customer where the customer is. This push strategy helps achieve reach and frequency goals with typical metrics that include cost per click, email-open rates and additional metrics on measuring tactic deployment.
However, as an increasing number of marketers follow this reach-and-frequency approach, customers begin to tune out. Our data show that high-value physicians typically receive 2,724 contacts per year from pharmaceutical companies. If the goal of the reach-and-frequency strategy is to deliver messages to our target audience, then it is successful. However, if the goal is to maximize customer engagement and promotion ROI, then the reach-and-frequency strategy has seen better days. Is it any wonder that marketers find that their promotion budgets deliver less and less over time?
The Achilles' heel of the reach-and-frequency strategy is that it does not take into account customer preferences. The idea is simple: Instead of focusing on reach and frequency, marketers should instead focus on optimizing customer engagement. And the way to optimize customer engagement is to understand what information customers are looking for, when and via which channel.
When pharmaceutical companies understand these preferences—and how they differ across customers—marketers can then deliver tailored promotions to customers based on their preferences, which leads to increased engagement.
Before we discuss how to leverage this, it is important to define “customer preferences.” Two common industry definitions are:
• Customer preferences based on access. The logic here is that if customers are accessible via a channel, then they must prefer that particular channel. This conversation typically arises when purchasing media. However, just because customers are accessible via a certain channel does not mean that they have a preference for that channel.
• Customer preferences based on engagement. Customers who spend their time consistently engaging with a channel and message have a preference for that channel and message. This second definition focuses on using customer-engagement data to identify customer preferences, which is the key to preference-based marketing.
After pharma companies recognize the importance of capturing both who is accessible and who engages, several capabilities must be developed, in particular:
• Call to Action. Each marketing tactic—including sales details and sales rep–delivered marketing tactics—must have a call to action that enables us to understand whether and how the customer engaged with the tactic. This may require changes to the creative asset, but it is critical for companies that develop promotional assets to track customer engagement.
• Data Capture. Almost all marketing tactics—whether push or pull tactics—generate customer-engagement data. Capturing this data becomes critical to develop a preference-based marketing approach. Many pharmaceutical companies established processes to capture and allow for quality control with their customer-engagement data. The next area of focus for the industry is to increase the speed in which this data is captured. Typically the data was captured once each month but, to enable preference-based marketing, this data must be captured more frequently—ideally daily, if not in real time.
• Customer 360 Database. After the data is quality-controlled, it is then merged and stored in a customer 360 database. Pharmaceutical companies use this database—which typically includes engagement, profile and Rx prescribing data—as the single record of truth for all customer information.
After pharmaceutical companies complete these foundational capabilities, they must put the following capabilities in place to significantly improve customer engagement via customer preferences.
• Customer Analytics. Pharmaceutical companies must shift from tactic analytics to customer analytics. While tactic analytics measure how a tactic performs at a point in time, customer analytics measure how a customer engages over time. This longitudinal, analytical view enables marketers to quantify both tactic and content preference—also known as pathway analytics—to identify assets that a customer engages with over time. Pharma companies then use this historical data to both optimize the customer journey: With the historical pathway measured, these models can then be used to simulate the optimal pathway for each customer; and then to optimize the customer content: Perhaps the newest phase of analytics, it is also possible to capture content in which customers engage. By quantifying which content the customer engages, and how frequently, it becomes straightforward to continue to provide content back to the customer. This continuing content consists of an ongoing series of messages to a customer.
For example, a new product launch may have three types of messages: (1) Awareness messages to alert the customer to the availability of the product; (2) trial messages to support the customer's initial use of the product; and (3) usage messages to support the customer's ongoing use of the product with patients. Understanding when to move a customer along from awareness to trial to usage becomes critical to maximize product adoption.
The outcome of customer analytics is optimized history. That is, based on what occurred in the prior 12 months, we can optimize customer engagement. However, for this to be a viable strategy going forward, we would have to assume the next 12 months will be the same as the last 12 months. That is rarely the case. Therefore, we need to adjust for expected future events when developing the customer promotion strategy. Customer Promotion Strategy: By using customer analytics as a foundation, the customer-engagement strategy adjusts the optimized history to account for the expected impact of future market events. The impact of these future market events is typically quantified via market research or analog analyses. The output of this phase is a customer promotion strategy over a 6- or 12-month period driven by that customer's channel and content preferences. Customer Tactical Deployment: The success of preference-based marketing depends on accurately translating the customer-promotion strategy into a customer tactical plan, in essence moving away from deploying tactics to deploying customer strategies over time. Most pharmaceutical companies continue to adopt marketing automation tools to support this initiative.
Once deployed, the cycle repeats, as data is then captured, stored in the database and used to drive updated customer analytics. These analytics then refresh the customer-promotion strategy and update the customer tactical deployment plan.
The success of the entire process hinges on capturing customer-engagement data and using customer analytics to drive channel and content preferences. Many pharmaceutical companies have started developing these capabilities. How far along are you?