The Next Generation Pharmaceutical Industry: Part 5 of 5
This is what TARP does better than anyone else. A new product offering from TARP called Affinity Solution was designed with the specific purpose of improving the effectiveness of pharmaceutical/biotech sales professionals.
TARP’s Affinity Solution is designed to strengthen relationships with physicians and improve sales interaction performance. Our holistic systematic approach employs three phases to analyze, improve, and maintain healthy relationships between sales reps and physicians for maximum return on investment on every sales call.
In Phase One we check the vital signs of the physician/sales rep relationship. By surveying both the physician and the sales professional we clearly identify the gaps between what a physician expects and deems impactful and what the sales professional believes drives physician loyalty. Further, we identify the serious risk factors, isolate cause and effect, quantify the severity, and eliminate noise in the data in order to prioritize our approach to improving performance for maximum impact.
In Phase Two we align priorities with goals and change behaviors for maximum performance impact and improved interactions. Based upon our identified priorities we deliver highly focused, targeted internal marketing communications and training to realize the full potential of each and every physician/sales rep interaction.
In Phase Three we measure performance improvement and promote self-sustaining momentum. By measuring improvements in customer loyalty and satisfaction versus the established baseline, we not only provide accountability in closing gaps, but also create a platform to optimize the system for continued performance improvement and success.
Finally, based on pre-determined targets for improved effectiveness, we assess program performance. If goals have not been achieved, TARP will work on our dime to make it happen. If gaols are hit, TARP won’t hang around as the capability transfer successful was successful. That’s the difference in partnering with TARP Worldwide’s Healthcare division.
TARP’s Healthcare division has broad and deep sales and marketing experience in the pharmaceutical industry. Our experts have closely monitored the evolution of the pharmaceutical industry over the past 10 years, and identified this significant unmet need. The answers lie in intensely measuring, analyzing, profiling and then improving the pharmaceutical/biotech sales representative-physician interaction.
The pharma/biotech industries need Affinity Solution. A glance back at the number of layoffs within the industry over the past 5 years tells you everything you need to know. These layoffs are significant and devastating to once failsafe business models. As every pharma/biotech company looks to accomplish more with less, they must diagnose and treat the illnesses of their sales models and sales forces. TARP’s expertise in the areas of diagnosing and treating unhealthy customer experiences and interactions is unparalleled. Coupled with our Healthcare division’s pharma sales and marketing expertise, Affinity Solution emerged and is perfect for the next generation pharmaceutical industry.
–Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
The Next Generation Pharmaceutical Industry: Part 4 of 5
So, what does all of this mean to the tens of thousands of sales and marketing personnel remaining within this evolving industry? Their jobs are to target customers with relevant messages that communicate a value proposition compelling enough to drive prescriptions. The primary means of generating prescription volume in the U.S. is still the interaction between a company’s field sales representative and a physician. It matters little whether or not you believe the basic model of fielding sales personnel to call on physicians is valid. The fact still remains that hundreds of pharma/biotech companies field their sales forces, which are typically, or close to, the most expensive line item on their P&L statements.
Industry estimates report a cost of $300,000 to recruit, hire, and train just 1 pharmaceutical sales representative…and this is before they’ve made 1 call to a physician. If a company recruits, hires, and trains 1,000 field sales people, they are out $300M before $1 is returned on the investment. Furthermore, it is widely accepted that it costs upwards of $250 per sales call to a physician to employ that 1 pharmaceutical sales representative. If a pharmaceutical sales representative works 200 days per year, making 8 physician calls per day at a cost to the company of $250 per call, it costs approximately $400,000 annually to field just 1 sales person! With a small sales force of only 100, that’s $40M annually! Whether these numbers are entirely accurate is not important. Even given a 10-20% variance, it still remains enormously expensive to field a sales force in this industry.
As such, pharmaceutical/biotech companies are making their field sales forces leaner, more specialized, and more developed into consultative roles versus the traditional aggressive sales role. Companies will look to hire and retain specialized sales people who bring invaluable skill sets and competencies. But, as such, these sales people will become nomads, “rented” or “leased” for definitive periods of time, forced to jump from one company to the next throughout an entire career. Companies will put an emphasis on producing now, at the moment, during a time of need or crisis, and then cutting these producers once returns have been maximized. Gone are the days of long-term sales careers with one company. It simply costs the company too much. Instead, companies will instill a culture of nimbleness, flexibility, and preparedness. Success will come from being able to predict the continued industry evolution, limiting the times they are forced to respond to unforeseen events, but incurring minimal damage through extreme preparedness. Their sales forces will be the same. They will be highly specialized and well compensated, but never firewalled from reassignment or dismissal at a moments notice. EVERY sales person will matter. EVERY sales person will be intensely measured. EVERY sales interaction will have value. This is where TARP Worldwide fits, in partnering with all pharma/biotech companies that field sales personnel, in improving the sales rep-physician interaction.
–Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
Part 5 of 5 will be posted on Monday, February 9, 2009
The Next Generation Pharmaceutical Industry: Part 3 of 5
First, their sales and marketing efforts are focusing less on consumers and more on payer systems and organizations. Additionally, their sales and marketing efforts have not only globalized, but have also become more specialized by concentrating on the unique pricing and reimbursement environments of each geographic locale or country.
Next, these companies are taking less risk as they look to fund drug development. PhRMA reports that from nearly 10,000 compounds in drug discovery only 1 will become an FDA approved drug! Estimates report a mere 0.004% chance of a compound used in preclinical testing ever reaching the market, and perhaps only a 10% chance of reaching the market if used in human testing. Historically, it has taken 10-15 years and has cost $800M - $1.5B to develop and launch a new drug. With these staggering numbers and lottery-type odds of success, companies are taking less chance. Being wrong isn’t an option anymore. So, they are looking for late stage compounds, developed by specialty manufacturers, instead of relying on their own internal scientists and development infrastructures. All of this is positive for their survival and ability to compete globally, but there are consequences to the U.S. public, and that is a separate editorial in and of itself.
Finally, there are massive organizational restructurings that will be permanent, allowing the industry to be more globally competitive. These restructurings include massive layoffs of sales and marketing personnel thereby displacing tens of thousands of highly educated professionals into a struggling economy with unemployment rates hovering around 7.2%. Companies continue to consolidate through mergers and acquisitions. These consolidations result in massive personnel reductions as well. Companies are becoming more specialized. Once an industry where one company may carry, sell, and market hundreds of product lines is now becoming an industry of specialty companies, which focus on the most profitable therapeutic areas within their expertise. And, outsourcing has taken a hold of an industry that previously operated in a silo, because every company employed a broad range of experts and specialists that could do anything and everything. Employing every skill set and building every competency has become too expensive to survive, and frankly, it’s cheaper to outsource to companies that do 1 thing only and do that 1 thing very, very well.
–Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
Part 4 of 5 will be posted on Friday, February 6, 2009
The Next Generation Pharmaceutical Industry: Part 2 of 5
First, the revenues of these companies and all pharma/biotech companies are under intense scrutiny and pressure. As drug development pipelines run thin, protective patents on blockbuster drugs expire, and an entire nation (led by our elected officials) demands lower cost generic alternatives. These companies are simply unable to replace lost revenues without extreme cost-cutting measures.
Next, medicine, like the financial markets and many other industries, has globalized. As more countries develop, they can compete with U.S. pharmaceutical and biotech companies in the discovery, development, and distribution of medical treatments at much lower costs. Their professionals are as (or more educated than) U.S. professionals and work at lower costs. This enables the U.S. pharma and biotech companies to incur lesser profit margins. Russia, China, Brazil and India are threatening the U.S. dominated pharmaceutical stronghold. All of this is forcing U.S. companies to look outside our borders and collaborate and partner with global entities, which drastically changes profit models.
Finally, the previous success of these companies in discovering, developing, and bringing to market cures and treatments for medical conditions and diseases that affect large numbers of the world’s population. This has pushed future drug discovery and development into cures for more complex and infinitely more expensive medical conditions and diseases. Yesterday’s blockbusters were anti-depressants and treatments for erectile dysfunction and insomnia. Tomorrow’s blockbusters are going to be for rare forms of cancer and Alzheimer’s. This will be enormously expensive. At the same time, drug development costs have skyrocketed, as FDA’s approval process has tightened and become more conservative. FDA has forced broader and more intense testing, evaluation, and clinical modeling of drugs prior to approval because of litigation concerns. Pricing and reimbursement channels have moved quickly toward outcome- based medicine. Outcome-based medicine focuses less on the positive effects of a treatment today and more on the long-term costs of managing each individual patient throughout their lifespan.
On a positive note, the pharmaceutical/biotech industry has responded quickly and effectively to remain competitive. Kudos must be given to an industry that has put aside its own internal competitive battles to unite itself for global survival now and success tomorrow. You won’t see this industry calling for government assistance or bailout. Instead, what you have seen, and will continue to see, is an industry transforming itself in 3 distinctive ways:
–Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
Part 3 of 5 will be posted on Thursday, February 5, 2009
The Next Generation Pharmaceutical Industry: Part 1 of 5
Two decades ago, the pharmaceutical industry arguably held the title of “most admired,” and it became one of the top industries where significant numbers of college graduates aspired to gain entry, success, and wealth. Educated people from this generation were hired into an industry that presented infinite opportunities. Over two decades, the pharmaceutical industry amassed enormous wealth, evident in the meteoric rises of company market capitalizations from the early 1980’s to 2000. These companies paid healthy salaries and provided unparalleled benefits, secure retirements, robust pensions, stock options, and yearly bonuses. Many that joined the industry and stayed in it through these times are now millionaires. Companies could provide rich compensation packages to employees because they had discovered, developed, and brought to market some of the most ground-breaking pharmaceutical treatments ever seen. The opening up of, and following explosion of, markets for anti-depressants, beta blockers, statins, erectile dysfunction treatments and sleep aids provided tens of billions of dollars to the industry. Life was good.
Today, the industry is different by surviving a series of unyielding forces that have mandated significant change, broad restructuring, and ultimately a complete evolution. Once a nearly recession-proof industry of assured double-digit annual growth, the industry is now one of mass survival, with mergers and acquisitions serving as life-lines over the past decade. Industry data sources have estimated layoffs in the industry just since 2000 to be 150,000. And, these massive layoff numbers are not isolated to big pharma. Layoffs have struck organizations of every size from the top 10 to the smallest biotechs.
In 2007, the top 5 layoffs in the pharmaceutical industry were:
1. Pfizer: 10,000 jobs
2. AstraZeneca: 7,600 jobs
3. Bayer: 6,100 jobs
4. Johnson & Johnson: 5,000 jobs
5. GlaxoSmithKline: 5,000 jobs
In 2008, the top 5 layoffs in the pharmaceutical industry were:
1. Merck: 8,400 jobs
2. Schering-Plough: 5,500 jobs
3. Wyeth: 5,000 jobs
4. UCB Pharma: 2,000 jobs
5. AstraZeneca: 1,400 jobs
These 9 pharmaceutical companies alone account for 56,000 layoffs in the past 2 years. And, most experts within the industry and financial institutions agree that more layoffs are coming. So, why are these companies forced to downsize, right-size, consolidate, or whatever else may be used to define these layoffs? You can point directly to 3 primary reasons:
–Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
Part 2 of 5 will be posted on Wednesday, February 4, 2009
Customer loyalty…transmitted by mouth and mouse
We all like to save money.
So, if I told you that you could save by having your current patients spread the word and refer your product or practice instead of paying millions on advertising, would that be something you might be interested in?
TARP’s decades of research shows that it’s five times cheaper to keep a patient than to get a new one. We consistently finds that personal interaction has more than twenty times the impact on the opinion of a pharma company than an ad or sponsorship, and physicians and patients who are delighted tell twice as many peers about the experience.
Wouldn’t it be better to satisfy physicians and patients to the extent that they do the heavy lifting for you and spreads the good word? Your customer is your best marketer.
Here are some first steps to managing patient word of mouth / mouse:
Measure your service system.
Measure patient and physician problem and question rates and the percentage that are never brought to your attention.
Measure the effectiveness of your system for responding to contacts, including the loyalty and word of mouth/mouse implications.
Measure your patient education system. Figure out what percentage of patients actually receive answers to questions and the impact on their view of you and your products?
Measure your physician education system and the same factors for your interactions with healthcare professionals.
Measure your existing word of mouth/mouse dynamics. The process of measuring word-of-mouth/mouse impact is highly rational: You can use statistical analyses that are as sound and validated.
Measure how your service system relates to your risk process and expense. There is a strong linkage even if it has never been addressed in the past.
Finally, once you have a quantified snapshot of the current word of mouth/mouse and risk dynamics along with the revenue and cost implications, plot a new strategy to prevent problems, proactively educate both patients and physicians, and manage word of mouth/mouse.
How much business do you think you’re getting from word of mouth/mouse now? Could you be getting more? Call TARP Worldwide, and we’ll answer these questions for you and your business.
-Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide.
Can we live with “Big Pharma” on Obama?
Over the past year and a half, Americans have been inundated by political and campaign messages proclaiming that “change” is necessary for our country to move forward. Somehow, we have all redefined “change” as being a holistically positive thing without negative consequence.
Should we all be embracing “change” as some global moniker of positive evolution? In my opinion, not all recent changes have been good, but change has intoxicated our country and more of it is on the way.
And make no mistake; change is coming for the healthcare industry!
In healthcare, an industry that arguably provides some of the world’s most valuable products and services, the “change” that waits is more regulation, more governance, more restriction and more government!
Just as Americans have redefined “change” as some inherently positive moniker, we’ve also redefined the healthcare industry–more specifically the pharmaceutical industry–as evil. Pharmaceutical companies have become those corporate “Scrooges” that cost our healthcare system billions, reap huge profits and make it more and more difficult to get the right medication by ratcheting up drug prices! We love to hate them. So, we DEMAND change!
Here’s just a taste of what these companies REALLY do…
• They help to educate and inform all healthcare practitioners, keeping our medical professionals on the cutting edge of new treatments.
• They give away billions of dollars worth of FREE samples to be used by medical professionals as they see fit, whether for patient trial, indigent patients or clinical study.
• They ship FREE drugs all over the United States and world, helping to wipe out disease epidemics.
• They sponsor medical seminars, symposiums and Continuing Medical Education programs.
• They fund enormously expensive medical research studies.
• They educate the public on the health issues affecting them today.
• They cure medical conditions and disease.
• They improve the quality of lives and extend life expectancies.
And they do all of this in the most regulated, governed and highly controlled industry known to man!
So, in the spirit of “change for change’s sake,” let’s regulate this industry more! Let’s force these companies to become less competitive by having to merge and consolidate just to stay solvent in this troubled economy. Let’s force pricing and reimbursement regulations by telling the American people that it will result in cheaper drug costs. Let’s make this industry “pay” for all the good…errrr…bad things (we think) they do.
This is what’s coming. If you think the state of healthcare is bad now, just wait. In four years you may be forced to live with a disease or medical condition that the healthcare industry has been unable to develop and/or deliver a treatment or cure for, thanks in large part to being hogtied by government regulation.
But, hey, it’s a “change”, and now all those old medications are cheaper…
Geoff Arbuckle, Vice President of Healthcare and Business Development at TARP Worldwide
Where is my package and why wait for me to ask?
My last minute shopping chickens have come home to roost. The shopping is done, the order complete and now all that matters is the package arriving ON TIME.
As a customer, my expectations are that everything will go as planned. If not, I expect you to proactively let me know. Further, your technology (like voice recognition) will not be an impediment, but useful and transparent.
Here are some ways to ensure a good customer experience:
· Proactively notify the customer about delivery - some vendors, in conjunction with their delivery services, will tell you when the package was shipped and when it will be delivered. When you are having something shipped, especially to a business, it is VERY helpful to be told when it was delivered and who signed for it. This should not be something I have to call for. Assuming you have my email address, a simple note should be sent by the vendor telling the customer that their package arrived and who signed for it.
· Highlight delivery information and tracking on your Web site - the first screen of every online retail destination should not just be sales. I should be able to navigate to shipment tracking in just one click. On one site I had to click four times. Most people will call after the second or third click without results.
· Make voice recognition technology less tedious – voice recognition systems often repeat everything that is said back to you, making the process long and tedious. It makes more sense to check for a valid number using automated number identification (ANI) and then verify with the customer for security purposes. The customer could then be prompted for their name, rather than repeating back everything. The United Airlines frequent flyer program utilizes this system quite successfully.
· Proactively alert me if a problem arises - If there is a glitch, e.g. the package missed the flight or the delivery was not made, email me and leave a phone number that I can call at any hour. (The Butterball Turkey Talk-Line is available all day Thanksgiving and Panasonic’s helpline is available all Christmas Eve and Christmas Day). Also ensure that you have empowered humans available when I encounter the problem or unpleasant surprise.
The point is, proactively reassure me that everything is going according to plan. If it isn’t, let me know and tell me who to talk to. Also, be sure that the customer representative can handle the top ten standard problems and is empowered to fix them.
I hope everyone has a great holiday and that everything arrives on time and is the right size.
-John Goodman, Vice Chairman at TARP Worldwide
Ho! Ho! Huh!? Frustrating phrases for customers
Let’s be honest, the holidays can be stressful. Most customers are stressed about spending money and trying to get the best deal delivered on time for their loved ones. This is not the time to set off a customer with a phrase or comment that can be easily avoided.
Today, I encountered a service rep that was unable to help me. Even worse, at management’s direction, rubbed salt in the wound by using phrases which were completely inappropriate for the situation. Here were the phrases: “I’m sorry for your inconvenience,” and, “Is there anything else I can do for you?”
Why don’t managers see that these phrases have become clichés and are otherwise inappropriate? We call these “flash phrases,” and they’re more insult to injury than comfort.
In my last entry I had mentioned a previous situation I encountered when a package needed to be rerouted due to no one being home to sign for the delivery. When I called, the customer service representative in a foreign call center had no flexibility in what she could do. Her only option was to send an email that would be acted upon in five business days. She then used the first flash phrase, “I’m sorry for your inconvenience”. This was no inconvenience, it was a deal breaker!
After waiting over 10 minutes for a supervisor, I decided to give up and pursue another approach. I told her I was giving up and wasn’t going to stay on hold for another twenty minutes. She said that was fine, did not apologize, and then used the second flash phrase, “Is there anything else I can do for your today?” Seriously? She had already demonstrated she couldn’t do anything for me in the first place.
Many call centers now require that this phrase be used at the end of conversations to assure that they have handled all aspects of the customers’ needs. However, a problem arises if the basic request has not been handled properly in the first place. If the basic need has not been addressed, the use of this flash phrase is both absurd and aggravating.
Service representatives need to be given flexibility to actually solve problems and only use flash phrases when they make sense. This concept is called flexible solution spaces and is something that less than 10% of contact centers have mastered.
Have you achieved front line flexibility? If so, we’d like to highlight your success for our readers. For the rest of you, simply eliminating these awful flash phrases is a step in the right direction.
-John Goodman, Vice Chairman at TARP Worldwide
For holiday shoppers, a single glitch trumps a great deal and free shipping
We’re now in the crunch time when procrastinators are rushing to finish their shopping online. I know, I’m one of them (My wife finished two weeks ago – I think it’s a guy thing).
The key to my success (and the retailer’s) is finding what I want and being sure it will arrive on time. Honestly, price is much less important now. It’s all about finding what I want, convenience, availability, and assured delivery.
During an online shopping expedition, I found some easily avoidable mistakes that online retailers are making.
Here are four of the biggest problems, with an easy-to-execute solution:
· Problem: I can’t find what I want
· Solution: Always have a great site map and an effective search
· Problem: I want to look around and ask questions without registering
· Solution: Have a chat button on the site where I get connected in less than 30 seconds.
· Problem: I’m concerned that my present won’t arrive in time
· Solution: Tell me if it is available and if it is not in stock whether it will be in before Christmas –The NY Times Store told me it was on back order and I had to ask if they would get before Christmas – they came back in 24 hours and said “yes’ but most people will not ask – just move on to another site.
· Problem: Assured delivery is seldom straightforward. Example: I ordered something from Best Buy and had it sent to my home (same as billing address). Then AFTER I hit purchase, it came back and said “Signature Required” OUCH!!- No one is ever home during the day! I then call and try to redirect and was told it would take five business days to get UPS to redirect it – two days after Christmas.
· Solution: Tell me signature will be required BEFORE I hit purchase.
The customer will play by the rules if they’re told what the rules are – but you need to clearly communicate these rules and warn them about potential unpleasant surprises. If you are a retailer, ask for our paper on tips to do this – it has things you can do in the next 24 hours without major changes to your Website.
Do you have any examples of built-in, avoidable and unpleasant surprises during the online shopping experience? If so, we’re updating our paper on proactive customer education and we’d love to highlight your great practices.
John Goodman, Vice Chairman at TARP Worldwide
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