Why CLM won’t save you money, and why you need to do it anyway
Tim Moore and David Kuperstein
Closed Loop Marketing has become widespread in the pharmaceutical industry, but many companies have chosen to implement programs for the wrong reasons. Launching a successful CLM program requires a significant investment to change the commercial model. Leveraging 8 years of CLM experience, David Kuperstein and Tim Moore share real results from companies who have made that bold investment.
Let’s be honest, Closed Loop Marketing is not cheap. Between updating systems and processes, retraining your people, hiring experts and creating digital content, it is easy to get sticker shock. Especially when many companies have sold CLM up the chain as a cost-cutting enterprise which will save millions in unused paper detail aids. While a successful CLM campaign does rein in spending on paper copy, the net sees all of these savings, plus additional budget, put back into the campaign. Let there be no mistake about it: Closed Loop Marketing is an investment. But when done right, CLM ensures that you get a much better bang for your buck.
Closed Loop Marketing is not simply a new tactic or a new channel for reaching your customer, CLM is a new marketing model that requires a different approach, set of capabilities, process and financial investment. CLM fundamentally changes how you provide information to and receive feedback from your customers. It changes a doctor from a target into a partner – one who gives pharma as much, if not more, information than he receives.
Realizing this paradigm shift can be costly. Marketers must re-learn how to market, how to use the data they receive directly from the physician, rather than a POA cycle to drive strategic decision-making. The company’s analytics department will be challenged to do things none of its analysts have ever done before. RC will need to learn how to process flexible content in increasing volumes, given much less time than in the past. Sales reps will need to become masters not only of labeling content, but also on how to deliver that content in different ways using the newest tools. These changes take time and they take money, but ultimately create a leaner, more efficient organization that produces tangible results.
“Dynamic, engaging content and a broad range of assets allow sales representatives to have richer interactions with their customers.”
Through a combined eight years of experience implementing CLM transformations at over a half dozen companies, we have seen what happens when CLM is done right. From our hands-on experience and the existing literature, we have collected metrics that demonstrate many of the clear benefits that CLM can bring. We found six major categories of benefits brought by CLM that have each been observed at multiple organizations. Below is a summary of our findings (Figure 1) and interpretation of the results, which should help you to understand why CLM is so important for the industry.
Figure 1: documented benefits of closed loop marketing
Improved marketing and sales responsiveness
• Companies A and B – Revised and redeployed content within only 1–2 weeks after receiving customer and field feedback through CLM metrics.
• As a result, utilization of the tactics improved from ~20% of calls to >,80% in a 2 week period.
CLM data allows for near-real time customer feedback on marketing assets. This data is drawn from all live field interactions, allowing for a substantial amount of feedback in a very short period of time. Companies can use this data to continuously assess campaign performance and rapidly identify issues. Marketers can then respond to these concerns as soon as they appear in the field and the digital content can be deployed or recalled immediately and inexpensively.
Higher frequency of on-target messaging
• Company A – Focused effort based on CLM data led to >,80% sales force utilization of target messages and majority of time shifted from non-target messages to target messages.
• Company B – 24% more calls spent on on-target messaging.
Marketing and Sales are provided with regular reports on aggregate sales force activity, which allows the company to know exactly what messages are being delivered to the customer. Based on any gaps between delivered and target messages, the organization can adjust training as needed. Furthermore, the analytics track the impact of target messages on customer reactions and buying decisions. In this way the entire organization can see whether target messages produce the desired effect. When Marketing can show Sales that the target messages work better than any others, then the sales force will be more likely to choose them.
“CLM tools let sales representatives customize presentations to individual physicians, both through pre-call planning and during the call.”
More empowered and engaged sales force
• Company C – 56% of reps found the new tool enabled them to have longer calls with the physician compared with paper-based detail aids1.
• Company F – Utilization rose by 300% over the first year as sales reps believed the tablet PC to be a useful, effective sales tool2.
• Company H – CEO claimed iPad allows reps to save 250 hrs and the overall sales force to make +35,000 details per year3.
Dynamic, engaging content and a broad range of assets allow sales representatives to have richer interactions with their customers. CLM tools let sales representatives customize presentations to individual physicians, both through pre-call planning and during the call. In addition, feedback from CLM systems provides sales teams with actionable customer insights and recommended presentations. This approach automates the process of absorbing feedback and evolving the conversation in a personal and relevant manner, which is exactly what has made the best sales representatives so successful.
Expanded customer access
• Company B – CLM data analytics identified key messages and content types correlated with increased access to previously rarely seen customers.
• Company C – 33% of physicians usually unwilling to accept sales visits were more likely to see a CLM equipped rep1.
• Company G – Sales reps reported more face-to-face time with the physician as a result of using the tablet PC1.
Most physicians who previously decided to block sales representatives from their offices did so because they found the interactions uninformative, repetitive and boring. CLM engages these hard-to-see physicians by providing them a personalized, interactive experience. Captivating, relevant digital content draws them in, while the volume and flexibility of assets ensure a wealth of new material at each visit. This has led many closed offices to reopen their doors to the pharma rep.
“The bottom line is that customers have long wanted pharma to pay more attention to their unique interests and needs and to meet them in an efficient manner.”
Improved customer response to sales calls
• Company B – 33% increase in the time / length of the average sales presentation.
• Company C – 65% of physicians rate CLM experience as high quality interactions preferred over traditional detailing1.
• Company D – 75% increase in company reported physician commitment to brand1.
Similarly to the last category, even customers who were still meeting with sales representatives regularly view the CLM experience as a significant improvement. Sales representatives are better equipped to respond to customer requests. New content can be deployed more frequently, alleviating the common customer frustration with stale messages. In addition, customized content can be deployed for different segments and individuals to provide more personally relevant messages, such as real time, dynamically-populated managed-care data.
Demonstrable impact on brand sales
• Company A – 9%-30+% increase in call effectiveness (measured as the change in NRx impacted by a sales call).
• Company B – ~20% overall increase in NRx.
• Company E – 10% increase in total Rx and 50% increase for new Rx for physicians engaged in CLM on convention floor4.
Notwithstanding all of the other benefits, sales impact is what makes or breaks CLM within an organization. Any good investment needs to provide sufficient return and pharma continues to look for proof that CLM is a good investment. Based on our experience, mature CLM organizations have been able to track real and significant sales improvements as a result of creating more value for the customer.
The bottom line is that customers have long wanted pharma to pay more attention to their unique interests and needs and to meet them in an efficient manner. The same can be said for sales representatives who have felt that the materials published by Marketing do not reflect their insights and experience from the field. Closed Loop Marketing answers these challenges by shifting the model from push to pull, from a commercial to a conversation. Organizations that have had the courage to invest are already reaping the benefits. If you’re not one of them, your window of opportunity is closing fast.
1. Steven Niles, “Feedback loop” PharmaLive, Jun 2007
2. “Loop of Faith,” Sales Force Report, MM&,M Online, Nov 2008
3. “Novartis CEO: iPad saves time, keeps reps honest” FiercePharma, 2011
4. John Ruane, “Two Views from Inside the Exhibition Booth,” Pharmaceutical Executive, September 3, 2009
On 28th September at 1pm (GMT) we will be hosting a tweet chat on CLM. The content of which will be used for a follow-up article to be published on pharmaphorum in November. Please join in – #pharmaphorum.
About the authors:
Tim Moore is a Principal in the Capgemini Consulting Life Science practice. He is the co-lead for the Life Sciences Marketing &, Sales Digital Transformation Practice. Tim has led strategy development and implementation for CLM programs with several pharmaceutical companies in the US and Europe and helped launch CLM for more than 40 pharma brands worldwide. Prior to joining Capgemini Consulting, Tim spent 20 years working in the Pharma industry. In his last Pharma role he served as the lead of a more than 100-member Closed Loop Multi Channel Marketing transformation program that fundamentally changed the way a leading Pharma engages its customers. Tim can be contacted at firstname.lastname@example.org.
David Kuperstein is a Senior Consultant in the Capgemini Consulting Life Sciences practice. His experience ranges from strategic marketing to sales force alignment and training, with a focus on new commercial models. David has spent over 3 years working on Closed Loop Marketing (CLM) at a number of pharmaceutical companies. He has co-authored multiple CLM white papers and presented on the topic at industry conferences.
What are the benefits of closed loop marketing in pharma?