Customer focus is the key to sales
Although many pharma companies acknowledge the need to move to more customer-centric approaches, few have been able to manage this shift. Shire Japan’s Yutaka Okada explains why understanding the customer is vital to both the primary care and specialty care markets.
Pharma in Japan needs to better understand the customer regardless of whether the company has a primary or specialty care focus; however, there is even more focus on the customer in the specialty sector. That’s the message that Yutaka Okada will be delivering at the Sales Excellence Japan 2014 event on 14-15 October 2014.
Okada is Head of the Internal Medicine and Rare Disease Business Units at Shire Japan KK, a subsidiary of the specialty biopharmaceuticals company, Shire plc. A veteran of the primary care market, Okada is spearheading the launch of two new products for Shire in Japan this year. In Japan, there is a mix of pharma players, with some of the primary care giants having sales forces exceeding 2,000 reps. In contrast, specialty pharma sales forces may only number a hundred reps or less. At the same time, there are several key trends affecting pharma sales in Japan, including the changing relationship with doctors, compliance issues, and the challenge around differentiating individual products. “The general trend is forcing pharma companies to be more customer-focused,” Okada explains.
As a consequence, better understanding of the customer is increasingly the key to sales in the move away from an entirely product-centric approach. But who exactly is the customer? According to Okada, it depends on the therapeutic area and target patient: sometimes the focus is more on the doctor; sometimes it is more on the patient as well as the doctor; in certain areas such as paediatrics, the caregiver (parent) can also be important. Asked why pharma companies need to know their customers, Okada replies: “It’s largely because we need to be responsible about how we educate on disease and treatment. To do this we need to understand customers’ current behaviors as well as the motivation driving this behavior. Knowing our customers allows us to better tailor or individualize our approach to each one.”
On top of this, several trends are encouraging pharma companies to be more customer-focused.
1. The changing environments surrounding pharma, including more compliance regulation, call restrictions and requirements for appointments, and doctors having more access to information. The consequence is that there is increasing selectivity between MRs (medical reps) by doctors depending on the value each individual rep provides. “As a result, traditional approaches to customers, which are product-centered, are not working as well as before.
2. Especially in the primary care market, doctors are treating relatively common diseases with fewer unmet medical needs. Pharma is selling relatively simple products via thousands of MRs who deliver product messages with a high call frequency. Thus, doctors have a high awareness of brands and the messages, but are tired of the relentless product-focus and see fewer differences between brands. As a result, sales forces need to be more customer-focused than before: interaction between doctors and MRs enables pharma to understand customer thoughts and needs and this interaction is growing more important to enhance the level of differentiation that drives new prescriptions.
3. In contrast, in the specialty care market, doctors are treating rare or specific diseases with more unmet medical needs. Pharma is selling relatively complex products with a much smaller numbers of MRs who provide detailed information on a disease as well as medications to a limited number of specialists with fewer call-frequency Implications. Okada suggests that this sector therefore needs to be even more customer-focused than the primary care sector. The more complex nature of the diseases and products requires a more tailored approach depending on the doctor’s treatment policy or an individual patient’s condition.
“Pharma needs to better understand the customer regardless of whether we are dealing with primary care or specialty care,” Okada emphasizes.
Moving towards a customer-centered approach has a number of important implications, according to Okada. Among the potential issues are:
1. A disconnect between the philosophy and the marketing and sales tactics, whereby tactics still focus on the product and may not match the customer-focused approach. In order to counteract this, he suggests conducting cross-functional workshops among marketing and sales, medical, and other functions within the company to discuss customer insights. He also suggests pursuing key customer insights in brand planning and consistently reflecting this in marketing and sales tactics.
2. MRs may have the wrong mindset when it comes to customer-focus, especially if they have the misunderstanding that a customer-centered approach is free from brand promotion. To counteract this, reps must be educated to conduct brand promotion based on positioning –including differentiation –even when adopting a customer-focused approach, regardless of whether the market is primary care or specialty care.
3. Inappropriate KPI-setting focuses too much on call frequency. Sales managers should be aiming for KPIs that balance both the quantity and quality of MR activities. For instance, doctors could evaluate MRs in terms of the quality of their understanding of specific therapeutic areas.
4. MRs may lack the capability to understand and respond to customer needs. Okada suggests providing MRs with training to improve their communication skills – such as asking effective questions for two-way communication – as well as training to improve their knowledge around a disease using methodologies such as providing the opportunity to listen to actual patient stories and conducting role-plays with real doctors.
In terms of insight, Okada draws on the analogy of an iceberg to illustrate the importance of customer insight: above the water is the area about which we have lots of facts and data; but the much bigger area underneath the water is where something behind facts and data lies. “We have to think a lot about the invisible area,” he declares.
Okada suggests several ways in which customer insight can effectively be incorporated into the development of sales and marketing strategy and daily field force activities. He stresses the need to educate sales people as well as marketing about customer insight, how to obtain it and when to apply it to tactics. Especially in the rare disease area, gaining insight through the MRs closest to customers is very important since primary and secondary data is very limited and not easily accessed. Discussion between sales and marketing drives understanding of customer insight.
“Good insight is driving communication with customers as well as product differentiation.” He highlights best practice on field force activity from Shire Japan that includes conducting territory plan challenge sessions for MRs to present and discuss their plan by key account and doctor, based on deep understanding of customers with the HQ medico-marketing team.
At the same time, the regional approach is also becoming more important in focusing more on customers, according to Okada, “because we have to deliver necessary information to doctors or patients through a good understanding of the patient journey in a particular medical region.”
In conclusion, Okada suggests that vision – of how to help and serve customers as well as pursuing business – is vital. “Each rep’s vision needs to be consistent, but not identical.”
For more information on Yutaka Okada's presentation at Sales Excellence Japan. At Sales Excellence Japan 2014 (October 14-15, Hilton Tokyo), top experts from AbbVie, Novartis Animal Health and Bayer will be joining Shire to discuss improving customer insight and sales strategies.
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