| By Chuck Schaeffer
CRM Software For Pharma, Biotech, Cosmetics and Medical Device Companies
My experience in deploying CRM and social CRM solutions for life sciences companies leaves me with two initial take-aways other life science CRM adopters should consider. First, CRM for Life Sciences is a combination of industry specific CRM strategy and enabling CRM software designed for the unique challenges and objectives of pharma, biotech, cosmetic and medical device companies. Attempting to reapply a horizontal CRM strategy to a life sciences company will likely incur challenges and limited payback. Within a life sciences context Customer Relationship Management facilitates customer interactions across clinical, safety, support, sales and marketing operations—and each of these processes is unique for this industry.
Second, while there's a tendency to lump life sciences into the broader healthcare industry, I think this is an over simplification as the top business objectives and the regulatory constraints are different enough that the two industries generally take varying tacts when designing their CRM strategies. Recognizing the unique goals and constraints of the life sciences industry can save time and accelerate results when creating a customer-focused business strategy.
Life Sciences Business Challenges
In addition to increased competition, decreased margins and more fragmented customer communication channels, life sciences companies face several unique challenges.
- Market access strategies, such as expanding beyond existing geographic and industry sector boundaries to deliver an increased product portfolio to more patient groups and customers in more markets.
- Regulatory (FDA) reform and compliance, including life sciences compliance with sampling, aggregate spend and transparency disclosure requirements such as the Sunshine Act expense disclosure.
- Special regulatory consideration with regard to marketing and promotional materials. Customer communications management, compliance and audit controls (being able to approve and trace every promotional material delivered to any client based on regulatory agency request or filed complaint) are essential.
- Challenged access and less available time with customers such as physicians. The combined effect of regulatory reform such as the Physician Payment Sunshine Act, state-level aggregate spend regulations, and gift ban laws combined with 32 million newly insured patients entering the U.S. healthcare system is creating a big change in the primary care physician-to-patient ratio from the current 1:1,500 to 1:8,000, leaving even less time for physicians to meet with pharma and medical device sales reps.
- Generic competition shows no signs of abating. Similarly, off-patent medications are accelerating, resulting in widespread cost-cutting and margin pressures from a payer-led market.
- Healthcare reform, and its manifestations in areas such as managed care and fixed reimbursements, create artificial cost thresholds and revenue constraints.
- The decline in blockbuster drugs and patent cliffs are delivering abrupt revenue impact to many biotech and pharma companies.
Each of these are strategic challenges which impact revenue generation, cost containment, market growth, customer management and regulatory compliance — all areas where Customer Relationship Management strategy, processes and technology can come together to deliver strategic responses.
Life Sciences CRM as the Solution
CRM is a business strategy aimed as understanding, anticipating and responding to your customers, in a way that grows relationships and satisfies mutual objectives. When supported with repeatable processes and technology automation, CRM directly enables market access, customer acquisition and related strategies that impact revenues and company growth, while also delivering information for both business intelligence and regulatory compliance.
What I personally find most interesting about CRM in the life sciences industry is the opportunity to apply creative combinations of strategy, people and technology to achieve customer and revenue objectives that both outperform competitors and meet the company’s most strategic goals.
Here’s a few specific examples of how CRM can add value to life sciences companies.
- Market Realignment. The ability to realign markets, whether by territory, product, customer segmentation or even as a response to new regulations, is a near constant demand in the life sciences industry. And this doesn’t mean just reassigning sales people based on newly defined territories, but being smarter than that and aligning the many types of customers (HCPs, physicians, hospitals, clinics, etc.) to the marketing and sales people and processes that best deliver the right information and engagement to the right customer segment at the right time. While this need is well understood and the concept is simple, the execution is more complex. For my most recent situations, I used Microsoft Dynamics CRM software to create market model hierarchies and templates which allow on-the-fly realignment that directly maps to the overarching revenue, customer acquisition and customer retention strategies.
- Account Planning. Business development in the life sciences industry demands that sales pros manage a high number of short meetings and be equipped with the most salient information for every meeting. KAM (key account management) must also easily decipher complex relationships, such as the relationships between doctors and hospitals or payers and even the relationships that physicians or HCPs hold as KOLs (Key Opinion Leaders).
- Mobility. Leading life sciences companies have adopted a mobile-first approach. Delivering anytime/anywhere customer information to field sales staff is essential for those staff to maximize their limited time in customer visits. For example, increased physician demands and cost containment pressures from multiple sources can now limit physician visits to as little as a minute in duration. Laptops have given way to tablets (almost exclusively iPads) which also empower field sales staff to deliver high impact rich media presentations during their short visits, and advance the agenda from selling to education. Other key mobile CRM functions include call/visit recording, device management tracking of demo or sample units, next step automation, online and offline order management and digital signature capture.
- Social CRM. Forward thinking life sciences leaders have an opportunity to change the communication from a one-way monologue whereby (marketing) messages are broadcast to recipients in mass, to a dialogue, whereby they actually engage customers and community members. In fact, more often than not, patients and community members at large are no longer interested in what they view as being on the receiving end of marketing or advertising propaganda and have taken to their own social networks to engage and inform each other about their issues and their providers. Creating a social strategy, enabled by social CRM, is a great approach to engaging customers in social channels for business development and customer retention purposes. Social CRM also provides the tools and automation to pinpoint and engage influencers and KOLs in life sciences and healthcare industry niches and even the payer communities.
- Nurture Marketing. The growth of more specialized and personalized medicines requires tighter customer segmentation in order to deliver messaging that resonates and is acted upon. Life sciences companies have a great opportunity to segment customers and constituents by very specific topics and then deliver nurture campaigns which periodically relay highly relevant and personalized information that recipients actually find interesting. Nurture campaigns position the sender as a thought leader, keep the sender top of mind and can even score the readers responses to the content — to know exactly when to follow-up with a phone call.
Where CRM Software Fails to Deliver ROI
CRM software is the underlying platform to achieve each of the previously discussed examples. Unfortunately, there are two critical mistakes that many life sciences companies make when implementing CRM software. First, they implement the software without an accompanying CRM strategy. Software automates a strategy; it doesn’t replace it. And in the absence of strategy, CRM software really just automates fragmented processes that may deliver piecemeal or departmental benefits, but will most certainly fail to support the company’s primary drivers and earn a reasonable return on the software investment.
Second, too many CRM software adopters view a CRM software go-live as the destination event. No doubt about, CRM software can bring transaction management and repeatable processes to key life sciences business processes such as physician and healthcare practitioner (HCP) account and call management, complex HCP and physician activities, sales planning and forecasting, and closed-loop service and support. But in reality, automating these activities for consistency and efficiency aids management, but doesn’t grow your customer relationships, and consequently your business. Fortunately, CRM software is an ideal platform to then add mobile CRM so that field sales can more effectively engage customers when face to face, add Social CRM to better engage more customer types in social channels, add marketing automation and nurture customers through intelligent communication campaigns or a host of other techniques which more directly engage customers, and actually grow customer acquisitions, customer value and top line revenues.
CRM software can deliver several tactical benefits, but often by itself is no panacea. However, when thoughtfully combined with CRM strategy, and possibly even a social strategy, it becomes a powerful tool to aid the company’s top objectives such as increasing customer acquisitions, growing customer share and retaining customers longer.
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Forward thinking life sciences leaders have an opportunity to apply social CRM to change the customer communication from a one-way monologue whereby (marketing) messages are broadcast to recipients in mass, to a dialogue, whereby they actually engage customers and community members for mutual benefits.