Aggressive cold-calling, armies of sales representatives and product sampling campaigns are all standard marketing techniques in many industries. But a new report from PricewaterhouseCoopers looking at these practices in the pharmaceutical industry claims this business model is “obsolete” and calls for a new approach that focuses on building brands and relationships. Could this spell the end for the sales-led marketing approach in pharmaceuticals?
Steve Arlington, author of the Pharma 2020: Marketing the future report, and global pharmaceutical and life sciences advisory leader at PwC, says it is time to make sure that billions of pounds spent on “research and development are not wasted” and that a new marketing model “eliminates the need” for persuasion.
The pharmaceutical industry concentrates heavily on sending armies of sales reps out to meet doctors, backed up by heavy sampling campaigns and TV advertising. But Arlington warns that this will simply not be “effective” in a recession, when companies need to adopt a softer, brand-led, relationship-building mentality rather than direct-to-consumer selling.
Last month, GlaxoSmithKline chief executive Andrew Witty admitted there is need for general change. He said that industries are so fixed on the short-term needs of their sector that they don’t look at “where the real big issues are in the marketplace”. He talked about moving away from pushing “blockbuster drugs” with more focus on research and better internal communication.
Natalie Hughes, board director at brand consultants Clear, says that while the PwC report’s findings may sound “harsh”, it picks up on how the industry has adopted a “blanket approach” to promoting new drugs and has failed to learn how best to communicate with people about what differentiates each brand.
Many drugs companies are standing firm, claiming that the strategy of marketing of their prescription drugs to doctors and over-the-counter products to patients works effectively. But while a spokesman for AstraZeneca calls the firm’s marketing “targeted, customised and relevant”, he does reveal that the company’s chief executive has stated that it will be “pulling back on individual selling”.
“That’s still our most important tool, but it will be used at a lower level in the future. However, face-to-face contact is still the most effective marketing method,” he says.
Brands in other sectors back up AstraZeneca’s focus on reaching consumers through direct methods. Joan Coe, head of brand communications at npower, says: “Face-to-face selling is a very effective part of our business. Used right, it can help to optimise channels to get the right levels of awareness and engagement.”
This was echoed in the charity sector, where cold marketing is standard practice to help generate new fundraising leads. Help the Aged director of fundraising and marketing Amanda Ball says: “For charities, income generation relies on deploying up-to-the-minute marketing techniques or through engagement with the widest range of stakeholders in all situations, including on the street.
“Our challenge is to build on that expertise and knowledge and make sure charities play to their strengths and don’t shy away from using the most innovative techniques and cross-selling opportunities at their disposal.”
But James George, managing director of strategic consultancy Iris Concise, says the cold selling approach has reached its expiry date in pharma marketing.
“Aggressive marketing and product sampling are symptoms of a product push sales and marketing model that is rapidly reaching its use-by date,” he says. “Professionals right across the healthcare sector are too busy, too savvy and too cynical for the ‘foot in the door’ approach to continue as a valid way of working.”
Instead, he argues, pharmaceutical companies need to adopt very targeted techniques to reach out to the right audiences whenever they need information (see below).
AstraZeneca’s spokesman says it is already “meticulous about tracking the effectiveness of our consumer marketing, and to say that spending on consumer advertising is pointless runs contrary to our return on investment.”
Technology brand Sage agrees the direct approach is effective for reaching out to both existing and prospective customers interested in its services.
Head of brand Joanna Elliot says: “At Sage we have a direct telesales team of 200, waiting for the phone to ring. The use of direct to consumer is very successful in giving the customer the call to action. Targeting the right customer and building an equity to serve the customer with what they want in the way they want is vital to us.”
Meanwhile, Sky is recruiting 1,000 new staff to help it boost Sky HD subscriber numbers and promote its reduced cost Sky Plus HD box to both existing customers and prospective ones.
So if direct selling and cold calling is working in other sectors, does that mean the report is wrong to challenge its use in pharmaceuticals?
Angela Federici, senior vice-president of Millward Brown’s healthcare division, says the debate needs to be not about whether direct-to-consumer works but why there is not enough focus on building “unique brand positioning and differentiation” internally at companies.
For the pharmaceutical industry, combining Witty’s long-term aims of better research, communication and brand-building with the more familiar direct techniques is likely to become the most effective way to market drugs.
Why the direct response model isn’t broken
Mark Rabe, vice-president and managing director of sales at Yahoo! UK & Ireland, writes: “The main benefit of direct response advertising is the return on investment it offers advertisers. By targeting your ads to the right audiences, you stand a better chance of generating a response, and eventually completing a sale.
“When brands use a form of direct response ad, they are effectively having a one-to-one conversation with a consumer, who is seeking that information in the first place. An ad that uses the right tone of voice and is tailored to display the details a consumer wants to know, is more likely to spark interest than a more generic ad.
“Brands that look to cover all their bases and optimise advanced audience targeting and performance technologies will succeed at this best. This applies to advertisers in any sector – the key component of any campaign should be relevance and campaign efficiency.
“Walkers recently used Yahoo! to promote its ‘Do us a flavour campaign’. Working with media agency OMD, we were able to highlight the campaign across Yahoo! and the Yahoo! Network, which reaches 30.8 million unique users each month. This includes running dedicated display ads which call on users to watch campaign videos on a dedicated video channel.
“The campaign illustrates how major brands and marketing services can work in partnership. Yahoo!’s promotion on-pack is an innovative and measurable way to get consumers to visit the Yahoo! video channel, giving us insight into customer behaviour and extending the reach of the campaign.
“Going direct to consumers like this, and targeting campaign messages helps to produce results. DTC campaigns can offer brands flexibility, if used in the right way. Advertisers have the ability to design campaigns around the medium and location where it will eventually be displayed, and adjust creatives and budgets accordingly to achieve their campaign goals.
“Using any medium in the right way will achieve these goals, and provide a return on investment.
“Perhaps the core benefit of DTC is the insight advertisers can get. Good agencies will offer their clients accurate data insights into the effectiveness of the campaigns, allowing them to change tack if it is not working for them.”