Transcript Marketing is an organizational function and set of processes for

What You Didn’t Know You Didn’t Know about Marketing
Medical Marketing Association National Conference
June 1, 2006
The Conversion Funnel Re-Visited
Television and Radio Ads
Print Ads
Advertising
Direct Mail
Banners, SEO
Website
Specialist
Consumers
Consideration
Adoption
Awareness
& Upselling Tools
Practice ActivityCompliance
Logs
Device registry
Preference
Purchase
data ( if TitleLoyalty
21 requirement)
Purchase
CRM data from rep attending procedure
Fulfillment Processes
Selling Processes
Customer Service Processes
Management Consulting
Collaborative Brand/Process Optimization
The Conversion Funnel Re-Visited
“Stated” Dimension of Brand
….talk about it
Specialist
Consumers
Consideration
Adoption
Awareness
Practice Activity Logs
Device registry
Preference
Purchase
data ( if TitleLoyalty
21 requirement)
Purchase
CRM data from rep attending procedure
“Experienced” Dimension of Brand
….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?
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•
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
Seeing and Believing: An historical perspective
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
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 endto-end service
Customer-to-Customer Communications
“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
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
Customer-to-Customer Communications
Diffusion 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
Bad word of
mouth within
specialist
community
First-time
purchasers favor
competitor’s
device
Hospital admins
defect to
competitor’s
machine
Specialists sense
increased liability
..frustration
over lost $
Decreased sale of
new units and
disposables
In-office
procedures
decrease
utilization
Customer service
and technical
support is…
..not responsive
Customer Svc
Product
performance is...
..within standard
quality specs
R&D,
Manufacturing
Which is
attributed to
ineffective or
insufficient mktg
Sales team
successfully sells
product to
specialists
Sales
Journal
advertising
creates interest
Marketing
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 orientation
Water to a Fish: Many processes aren’t recognized as plastic,
human constructs…they are articles of faith, invisible &
unquestionable.
Pilot project as teaching tool
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.
Appreciative Inquiry
No lingua franca: Most people in the workplace don’t have a shared
language to document, examine, and refine processes.
Teach process language, it’s common sense
Performance reinforcement: Job performance criteria reinforce
siloed initiatives.
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 orientation
Stirring it up: You will be asking your sponsors to take on the
challenge of working across the organization, put their social
capital at risk.
Senior client sponsorship, feeling process pain
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.
Client lock-in, premium for holistic ROI stewardship
Creating and maintaining the culture: How do you build a company
that has art majors and management consultants working side-byside?
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
creating
communicating
Research &
Clinical &
Biz Dev
Regulatory
Marketing
Practice Activity Logs
Speciali
Adopti
st
on
delivering &
Awareness
Consideration
Preference
Purchase
Loyalty
Purchase
creating
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.
The Pipeline Re-Visited
Research &
Clinical &
Biz Dev
Regulatory
Marketing
?
?
?
Lingua Franca between Marketing and R&D
Technical
Pathway
Feasibility
Commercial Attractiveness
Closing Thoughts for Clients
Expect 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 Agencies
Pay-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?
Attention Scarcity
Practice Activity Logs
Specialist
Consumers
Consideration
Adoption
Awareness
Device registry
Preference
Purchase
data ( if TitleLoyalty
21 requirement)
Purchase
CRM data from rep attending procedure
Attention Surfeit
Backup
Promotional Spending in Pharma
12
1995-2004 Promotional Spending ($bil)
10
Detail
DTC
Events
Journal
8
6
4
2
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
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:
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
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
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
DET
DTC
JAD
PME
<1994
1994-1997 1998-2000
$
0.9 $
1.0 $
1.0
$
$
$
$
6.2 $
6.7 $
7.2
$
0.1 $
0.1 $
0.1
Hi-Level Results of ARPP Study: 100-500MM
– R.O.I. for brands with annual sales between
100MM and 500MM
DET
DTC
JAD
PME
<1994
1994-1997 1998-2000
$
1.2 $
1.6 $
2.1
$
0.1 $
0.2 $
0.2
$
2.3 $
3.1 $
4.2
$
2.0 $
2.7 $
3.6
Hi-Level Results of ARPP Study: 500MM+
– R.O.I. for brands with annual sales greater than
500mm
DET
DTC
JAD
PME
<1994
1994-1997 1998-2000
$
3.1 $
5.9 $ 11.6
$
0.4 $
0.7 $
1.3
$
3.1 $
6.2 $ 12.2
$
3.1 $
6.0 $ 11.7