What You Didn’t Know You Didn’t Know about MarketingMedical Marketing Association National ConferenceJune 1, 2006

The Conversion Funnel Re-Visited

Adoption Device registry data ( if Title 21 requirement)CRM data from rep attending procedure

Specialist Practice Activity Logs

PurchaseAwarenessConsumers Consideration Preference Purchase Loyalty

Print Ads

Television and Radio Ads

Website

Direct Mail

Banners, SEO

Compliance & Upselling Tools

Customer Service Processes

Selling Processes

Fulfillment Processes

Management Consulting

Advertising

Collaborative Brand/Process Optimization

The Conversion Funnel Re-Visited

Adoption Device registry data ( if Title 21 requirement)CRM data from rep attending procedure

Specialist Practice Activity Logs

PurchaseAwarenessConsumers Consideration Preference Purchase Loyalty

“Experienced” Dimension of Brand

“Stated” Dimension of Brand….talk about it

….be about it.

Three Questions we will explore together

1. How did the experienced dimension of a brand gain in importance vis-à-vis the stated dimension as a means of creating customer equity?

2. What is the role of the marketing function in improving the experienced dimension of a brand?

• Service attributes • Product attributes

3. What are the challenges and rewards of creating measurable, effective, brand-right processes and workforce skills?

• For advertising agencies• Internally for clients

The Ebbinghaus Curve

Guiding Idea of Mass Marketing: Awareness and preference can be created by continuous reminders through a mix of media.

The New Reality : Ebbinghaus no longer works

Consumers are like roaches. We spray them with marketing, and for a time it works. Then, inevitably, they develop an immunity, a resistance.

Jonathan Bond & Richard Kirshenbaum, Under the Radar—Talking to Today’s Cynical Consumers

Traditional marketing and branding strategies haven't helped most big corporations either. If you look at the top 50 of the Fortune 500 in 1989, you'll see that 10 years later, 39 had dropped from the Fortune 50. These are the companies that spend the most money advertising and promoting their brands.

Regis McKenna

Seeing and Believing: An historical perspective

Many of the nobles and senators, although of a great age, mounted more than once to the top of the highest church tower in Venice, in order to see sails and shipping that were so far off that, without my spy-glass, it was two hours before they were seen steering full sail into the harbor; for the effect of my instrument is such that it makes an object 50 miles off appear as large as if it were only five.

From a Letter to Landucci, August 29, 1609

Unlike spectacles or magnifying lenses, the optic tube offered not just a distortion of what was already there, but more. It revealed evidence that was different from what the naked eye could see, evidence that wasn't otherwise there." How the Telescope Opened Our Eyes and Minds to the Heavens- Richard Panek

Seeing and Believing: An historical perspective

It is now not simply a case of one body revolving around another body … as the Copernican doctrine teaches

From The Starry Messenger, 1610

Seeing and Believing: An historical perspective

Customer-centric view

Where’s My Stuff?

Evidence #1 : Amazon makes self-service order tracking available via the web, teaching consumers that:

– They have the right to witness the internal processes of the companies with whom they do business

– There are companies that make themselves accountable for end-to-end service

Customer-to-Customer Communications

Evidence #2. Consumers realize that they are not isolated, they can easily share their experience as consumers with one another:

– Zero distribution costs, ease of publishing on the web makes everyone a potential critic or advocate

– The power of word of mouth is amplified beyond local communities and social networks

“I’m not going to apologize for being impolite. Why should I?”

A recording of this comment by a Toshiba call center representative was posted on a website by frustrated

Japanese customer. The website received over 7 million visits

Customer-to-Customer CommunicationsDiffusion of brand experiences has sped up even more in the last 3 years due to the blog explosion....

Customer Expectations

• Transparency into internal processes• Coordination of cross-divisional offerings• Resonance between advertising promises

and operational fulfillment• Recognition and return of value for the

attention they have granted the company

In this context, what is marketing’s function?

Marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

AMA, updated in 2004•Core operating principle, not a department•Creating and delivering, not just communicating, value•Lifetime relationship

Litmus Test #1 – Client Perspective

Journal advertising

creates interest

Sales team successfully

sells product to specialists

Product performance

is...

Customer service and technical

support is…

Specialists sense increased

liability

Bad word of mouth within

specialist community

In-office procedures decrease utilization

Hospital admins defect to

competitor’s machine

First-time purchasers

favor competitor’s

device

Decreased sale of new units and

disposables

Which is attributed to ineffective or insufficient

mktg

MarketingSales

R&D, Manufacturing

Customer Svc ..within

standard quality specs

..not responsive

..frustration over lost $

Traditional hierarchies thwart process alignment

Most organizations are based on departmental silos that focus on vertical accountability, not cross-functional process ownership

Customer value is created laterally

Owning the customer experience requires intense and ongoing cross-functional collaboration

..and the ability to measure performance at key points in process flows

Client challenges to adopting process orientationWater to a Fish: Many processes aren’t recognized as plastic, human constructs…they are articles of faith, invisible & unquestionable.

Defensive mechanisms: Process change requires candid and often uncomfortable conversations about job expertise, areas of overlapping responsibilities, and personal accountability. Managers and performers become skilled at going through the motions of collaboration with a shared pact to stop short when personal defenses are triggered.

No lingua franca: Most people in the workplace don’t have a shared language to document, examine, and refine processes.

Performance reinforcement: Job performance criteria reinforce siloed initiatives.

Pilot project as teaching tool

Appreciative Inquiry

Teach process language, it’s common sense

Build lifeboat evaluation models

Lingua Franca

There is a language for collaboratively designing process. Like the blueprint for a house, a good process blueprint has layered levels of detail, so it can be understood by lay people and experts alike

Architectural Rendering

Floor plan

Section Detail

Lingua Franca

Hi-level process model

Task Diagrams Universal Modeling Language

Agency challenges to adopting process orientationStirring it up: You will be asking your sponsors to take on the challenge of working across the organization, put their social capital at risk.

Delayed gratification: If you act in good faith and look for root causes, you may be delaying the fun, known work of making ads while you take on the difficult, open-ended work of analyzing and improving customer touch points.

Creating and maintaining the culture: How do you build a company that has art majors and management consultants working side-by-side?

Senior client sponsorship, feeling process pain

Client lock-in, premium for holistic ROI stewardship

TBD– both risk and competitive opportunity

Poster Child of Stated Brands : The Sock Puppet

Everyone talks about how much money the company spent on advertising, but what about the free publicity? The puppet got on talk shows. It was even in the Macy's Thanksgiving Day Parade, and Al Roker was quoting the commercials. After the company went bankrupt, the puppet was its most valuable asset and became the only ad character in history to be sold to another company. The reason it stands for dotcom excess is that it was so successful. Rob Smiley– co-creative director of TBWA/Chiat/Day, San Francisco.

Pipeline

Adoption

Specialist

Practice Activity Logs

PurchaseAwareness Consideration Preference Purchase LoyaltyResearch &Biz Dev

Clinical &Regulatory

Marketing

Marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

communicating

delivering & creating

creating

The Pipeline Re-Visited

Research &Biz Dev

MarketingClinical &Regulatory

??

?

Technical PathwayFeasibility

Commercial Attractiveness

Lingua Franca between Marketing and R&D

Closing Thoughts for ClientsExpect Learned Helplessness: You will hear “there’s no way we can change things around here, there’s too much politics/turf war/history, etc.”

Start small and get a win: Low risk, high impact project with stakeholders that already work well together.

Fight to get measurement built in from the start: You can’t improve what you can’t measure

Find the language that creates common ground:

Closing Thoughts for AgenciesPay-for-performance mindset is here to stay: savvy clients are going to be looking for harder metrics than “awareness” and “brand recall” to judge ROI

“Holistic brand stewardship” creates opportunity to:• work across the organization, increase account longevity• increase number of billable services• radically differentiate offering

Get started: Throw some process people into the mix with your creatives and account team and see what they come up with. At one point putting the copy writer and artist in the same room was a radical innovation….why not try it?

Why not fish where the fish are?

Adoption Device registry data ( if Title 21 requirement)CRM data from rep attending procedure

Specialist Practice Activity Logs

PurchaseAwarenessConsumers Consideration Preference Purchase Loyalty

Attention Surfeit

Attention Scarcity

Backup

Promotional Spending in Pharma

1995-2004 Promotional Spending ($bil)

0

2

4

6

8

10

12

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Detail DTC

Events Journal

Lessons on ROI from the AARP Study

– One place to look for comparative ROI is the ARPP (Analysis of ROI for Pharmaceutical Promotion) study of 2002 conducted by Dick Wittink of Yale.

– Methodology of ARPP study• Evaluated 392 branded drugs with revenues of $25MM

or more for the time period 1995-2000• Used data from Scott-Levin to track impact of DTC,

Detailing, and Events spending on number prescriptions and prescription sales.

• Data from PERQ/HCI to track effectiveness of journal advertising

• Using regression analysis, calculated the average relative ROI for these promotional tools:

Detailing (DET) Direct to Consumer (DTC) Advertising in Professional Journals (JAD) Conferences and other Events (PME)

Hi-Level Results of ARPP Study: 25-100MM

– R.O.I. for brands with annual sales between 25MM and 100MM

<1994 1994-1997 1998-2000DET 0.9$ 1.0$ 1.0$ DTC -$ -$ -$ JAD 6.2$ 6.7$ 7.2$ PME 0.1$ 0.1$ 0.1$

<1994 1994-1997 1998-2000DET 1.2$ 1.6$ 2.1$ DTC 0.1$ 0.2$ 0.2$ JAD 2.3$ 3.1$ 4.2$ PME 2.0$ 2.7$ 3.6$

Hi-Level Results of ARPP Study: 100-500MM

– R.O.I. for brands with annual sales between 100MM and 500MM

<1994 1994-1997 1998-2000DET 3.1$ 5.9$ 11.6$ DTC 0.4$ 0.7$ 1.3$ JAD 3.1$ 6.2$ 12.2$ PME 3.1$ 6.0$ 11.7$

Hi-Level Results of ARPP Study: 500MM+

– R.O.I. for brands with annual sales greater than 500mm