CRM – how to do it right
pharmafile | October 24, 2003 | Feature | Sales and Marketing |Â Â CRM, customer relationship managementÂ
Management wants a single view of all customers and all products, reps want a single view of the customer they are seeing that day, clinical people want to know which doctors could work with them, manufacturing people want to know which products to stock up on. Generally, the information that a CRM system should generate should benefit everyone in the business. That is its strength, but it is also a source of weakness.
CRM tends to be implemented top-down. Its solutions are so costly that senior management needs to approve them globally, so it's tempting to develop a system that meets senior management's agenda of a single global view. The Holy Grail of CRM is one global system that is up-to-date, accessible to everyone and covers all the company's customers everywhere. In practice, pharma management's vision of a global CRM is thwarted by two realities:
- theres no such thing as a global customer
- business environments differ hugely from country to country.
In Europe, direct to consumer advertising is prohibited and pharma can't access prescription data at doctor level, only at 'brick' level, while data privacy laws are more restrictive. Then there are the cultural barriers. A doctor's prescribing behaviour, a patients reason for going to see him, and his willingness to accept medication will differ from country to country.
So when global projects do go ahead, either each country ends up with its own customised version running on a local server – which raises major consolidation issues – or there is a single centralised version, with local flavours, raising design and implementation issues and resulting in a costly and inflexible solution.
The other thing that tends to happen is that the solution drives the processes and not vice versa. We have discussed this problem in previous articles, where companies imposing CRM from the top down use off-the-shelf applications that ask for data that may be irrelevant or hard to obtain.
Everyone knows, and many people can list, what they want from a CRM system. They can also compare it with what they actually get. The two lists will typically be poles apart, and some companies would be tempted at this point to put the whole episode down to experience, and quietly forget about CRM. This would be a shame in the short-term and a disaster in the long term, given the need for pharma companies to focus on getting the most out of their existing relationships in the absence of new blockbusters.
Share of customer is the new name of the game, and there are already shining examples of CRM used by companies in other industries to maximise their share of customer. The key relationship is with the customer – in pharmas case, the doctor – so selling other products and services is one of the real tricks that CRM can help the company to perform.
Take Tesco, for example, Britain's biggest shopkeeper. Over the past five years, it has used it's CRM to move into financial services, to become the world's largest on-line grocery delivery service, and to segment its customer base into 5,000 'customer needs' subgroups, so that its marketing can have rifle-shot precision.
Using information from its loyalty card programme blended with demographic data, the company developed profiles of customers who would be most interested in banking, car loans, pensions and insurance. Tesco can acquire a financial services customer for less than half of what it costs a bank, so this has become a highly profitable cross-sell.
This success encouraged Tesco to innovate in applying customer insights and to build on the trust and loyalty developed by its stores. A couple of years ago, the company leveraged its off-line customer data to become the world's largest on-line grocery delivery service.
Tesco uses its customer information to target communications to its loyalty programme members by demographic, purchase and lifestyle profiles. The loyalty-card programme monitors hundreds of millions of purchases every day. It then uses this to create 150,000 variations of its promotion and reward statement mailings, generating tightly targeted marketing opportunities, and enabling it to address individual requirements. Its coupon redemption rate is 90%, no less.
Pharma could learn from Tesco, who started with the question, 'What do we know about our customers?' extended it to, 'What do they want?' and ended up with, 'What can we sell them?'
As with customers, so with doctors, even if only 'brick-level' information is available. The infrastructure to collect the data is already there. If people think the data they provide is useful, they will provide it. The idea of tight marketing must be a thought to gladden the heart of any pharma executive, currently shaking his head at the lamentable cost/benefit analysis of his CRM.
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