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Multi-Channel Management –
how to unlock the potential
Requirements for efficient
Multi-Channel Management
The pharmaceuticals and medical devices industry has been
subject to fundamental changes in the recent years and will
be facing even more pressure in the future. As growth in the
established western markets is stagnating or even declining
due to new regulations, patent expiry, empty product pipelines
and increasing access hurdles, cost reduction and efficiency
increase are on top of today’s agenda. Especially marketing and
sales cost as one of the major expense factors are under review.
The traditional “Share of Voice” model designed for marketing
blockbusters seems to be outdated and companies are forced
to find alternative strategies to efficiently approach the changing
customer landscape. Therefore, Multi-Channel marketing and
the proper management of various channels has come into focus
in many pharmaceutical companies as a means to develop and
establish new ways for customer communication.
Although the process of establishing Multi-Channel Management
in the pharmaceuticals and medical devices industry has already
started some years ago, commercial successes of such initiatives
are still behind expectations. Reason for that is that most
companies so far have equated Multi-Channel Management
with an operational approach to establish online activities such
as websites, customer portals or social media. These activities
have mostly been established in parallel to traditional sales
and marketing channels but have not been integrated into one
common approach, often even leading to increasing sales and
marketing efforts.
Therefore the major question today is how companies can
establish Multi-Channel Management to realize aspired
results? In order to fully exploit the potential of Multi-Channel
Management, it has to be set up based on a clear strategy to
intensify customer interaction through an efficient coordination of
all contact channels across the whole organization. An intelligent
balance between customer needs and individual product
requirements is crucial to enhance ROI through increasing
process efficiency and decreasing marketing and sales costs.
Status quo in Pharmaceuticals
and Medical Devices today
From the industry’s perspective today, several market conditions
in pharmaceuticals and devices market are heavily asking
to prepare for an efficient and comprehensive Multi-Channel
Management:
• Access to physicians is more and more limited
• Importance of alternative information channels is strongly
increasing
• Cost of marketing and sales need to be more stringently
controlled than in the past
• Strong shift from push to pull marketing is ongoing
• Different communication behavior is requested by customers
with changing preferences
• Relevance for margin contribution of the tail-end portfolio is
increasing
Based on an integrated strategic approach, Multi-Channel
Management can increase company value significantly
(Figure 1).
The concluding question for healthcare companies is rather
“how” than “whether” to implement Multi-Channel Management.
However, so far many companies do not have a satisfying
answer at hand (Figure 2).
Potential of integrated Multi-Channel Management
Spread of quality in social media activity
Integrated Multi-Channel Management
Potential
Quantitative Potential
H
H
H
H
• Reduction of sales and marketing costs
• Reduction of sales force
• Balanced and less costly channel mix
• Increased customer self-service
• Sales increase
• Use of pull-strategies
• Need based customer communication
• Efficiency increase
• Integrated approach across all channels
• Organizational alignment
Qualitative Potential
@
Figure 1
• Increased customer satisfaction
• Individualized communication
• Simplified access to information
• Better knowledge on customers
• Integrated approach across departments
• Share information across channels
© CEPTON
Figure 2
© CEPTON
As shown in Figure 3, this “pull-strategy” is particularly promising
in specialty medicine and chronic indications where patient
involvement is high.
Challenges for healthcare
companies
The major challenge of Multi-Channel Management in Pharma
and Medical Devices, as in many other industries, is to integrate
all communication channels across several internal departments
and to tailor this approach according to both product requirements
and customer needs. The ability to respond to changing customer
needs plays an important role, as the communication behavior
of major customer groups such as patients and physicians has
changed tremendously over the last years.
For patients the internet has become a major and reliable source
when searching for health information. Recent studies have
shown that:
• >60% of all patients search the internet for health information
• >70% of patients using the internet say their treatment decision
has been influenced by it
• >80% of chronic patients use the internet to find information
concerning treatment options
• Physicians see more and more patients asking for concrete
treatment options
The potential of such initiatives has been specifically proven by
Merck & Co. during their Gardasil® campaign. They achieved to
increase awareness of connection between HPV and cervical
cancer from 5% to 55% and had almost 120.000 fans on their
Gardasil® Facebook-site. Based on this patient support, Gardasil®
has become one of the best-selling products in many countries
shortly after the launch.
But not only patient behaviour has altered. Also physician’s
communication patterns and needs have run through constant
change during recent years. Using sales representatives as
more or less the only active communication channel towards
physicians is no longer cost efficient nor is it fulfilling customer
expectations. Today, physicians actively ask for e-channels,
allowing them to profit from information whenever they need
it, and higher quality and personalization in existing channels
(Figure 4).
Physician’s expectations regarding channel mix
Internet penetration in key pharma markets1
What physicians want today2 …
100%
But patients increasingly using the internet in return offer a great
opportunity for companies to trigger a “pull” effect for selected
products within their respective portfolios.
90%
80%
77% 78%
83%
80%
69%
70%
63%
60%
52%
High
potential for
influence on
decision
markers via
digital
channels
50%
29%
30%
2010
Inflammatory
Diseases
when seeking information on cancer 49% go to the
Internet first1
10%
0%
68% of the parents had used the internet to
research their child’s illness2
63,5% performed MS-related searches
“understanding the disease” and “treatments” are
most viewed topics4
Diabetes
42% search for diabetes information on the
Internet3
2000
US
Figure 4
1) Oncology times (2010) 2) Stanford university (2005) 3) www.portal.acm.org (2005) 4) Multiple Sclerosis International ( 2010)
5) Central retinal vein occlusion
Figure 3
64%
3
More HCP-spec. product
websites
73%
More HCP-spec.3 disease
websites
79%
More EBM
82%
6
89%
81%
JPN UK GER FR
ES
Fewer reps
52%
90%4
IT Global
1) Internet World Stats, penetration in 2010 (upper green bar) and 2000 (lower gray bar) 2) Touchpoint survey 2010 3) Healthcare
provider specific 4) Previous survey in 2008 5) electronic Continuous Medical Education
6) Evidence based medicine
47% of teens had used the internet to learn about
their illness2
Chronic CNS
Diseases
5
Higher quality reps
20%
Oncology
More eCME
More eSampling
40%
Patient involvement in specialty indications
58%
More Virtual reps
© CEPTON
© CEPTON
Looking at these changes and expectations it becomes obvious
that integration and balancing of different channels in a common
approach is the key differentiator for a successful Multi-Channel
Management in the future. It is now time for companies to define
and execute an integrated strategy to capitalize on the recent
efforts.
Internal organizational alignment will be a key success factor
in effectively operating this new business model. Healthcare
companies have to overcome current organizational silos when
dealing with different channels and customers. Successful MultiChannel Management will require a common contact planning
across channels and departments. Furthermore, all channels
need to be coordinated in a way that they can support each other,
e.g. sales force resources may still be required for collecting
information necessary to individualize online content.
All in all, companies need to define communication needs
by product and decide upon communication channels based
on “push” or “pull” strategies in a systematic but nevertheless
differentiated approach across the portfolio (Figure 5).
Key objectives of this approach are:
• Identification of future communication needs and channels
based on customer preferences and product specifics
• Definition of an efficient channel allocation per product in order
to maximize customer ROI and to reduce sales and service
costs
• Description of organizational changes required (resources and
interfaces) to implement a new Multi-Channel approach
• Building a key differentiator for companies vis-a-vis their
clients
Overview Multi-Channel Strategy approach
1
New wave of integrated Multi-Channel Management
Past
ø
Share of voice & direct channel for cost containment
Push
Choose right
channel based
on:
• Channel affinity
Future
Pull
Physicians
(incl. assoc.)
Figure 6
Social Media
3
Adapt to
product
specifics
4
Define future
channel mix
within budget
5
Align
organization
Develop
roadmap
© CEPTON
eCME / eDetailing
Website
eMail
• Push (initiate)
vs.
Pull (deliver)
TV / old media
• Profitability /
ROI
Other
stakeholders
Mobile Services (SMS, …)
• Objective of
communication
• Nature of
Information
Patients (incl
SH1 groups)
Define
offerings and
channels
framework
2
Direct (Mail / Fax / Outbound calls)
Press / PR
Print / Ads
Concerted
approach
across relevant
&
complementary
channels

Nursing Service / Homecare
Events (Congress / Training / Exhibition / …)
Customer Service / Call Center
Sales Force
1) self-help groups & patient associations
Figure 5
As illustrated above, the definition of a balanced Multi-Channel
Management should follow five phases. After clustering channels
and communication needs for evaluation, product specifications
and budget limitations need to be aligned. Finally offerings can
be allocated to channels and necessary organizational changes
have to be derived.
© CEPTON
CEPTON provides a proven
methodology
In order to support companies when defining a balanced MultiChannel Management, CEPTON Strategies has created a
pragmatic approach combining expertise from many projects in
a well proven project methodology (Figure 6).
Define offerings and channels
framework
As a first step, potential channels and offerings - i.e. different
needs for communication - will be clustered by the project team to
prepare for evaluation. During this first step it will be crucial to be
as precise as possible when describing offerings/communication
needs (e.g. “providing product dosage characteristics to
physicians” or “supporting patient referral to specialists”) as well
as communication channels that should be taken into account
(Figure 7).
If, for instance, the requirement for a given offering is to
“communicate at low cost to a broad target audience”
corresponding channel-criteria might be “cost of communication”
and “breadth of coverage”.
Clustering Offerings and Channels
Offerings / communication needs
Channels
Company/ Product Information
Sales Force
•
•
•
•
Online
Product Characteristics for physicians
Study results for stakeholders
Adverse event reporting for authorities
…
•
•
•
•
Services
•
•
E-Mail
SMS/ MMS
Phone
Disease Management
•
•
•
Based on the defined criteria, all offerings and channels will then
be systematically assessed for their mutual fit (Figure 9).
Messaging
Support practice organization
Support networking and patient referral
Enable patient-doctor communication
…
•
•
•
Improve interaction concerning compliance
Therapy guidelines
…
Inbound Call
Outbound Call
T-Detailing
Matching Offerings and Channels
Print
•
•
AD
...
Cost
• Cost of
communication
Figure7
© CEPTON
In order to identify which channels are appropriate to support
which offering, a next step should be to define a set of criteria
based on the most important communication requirements. Both,
the offerings and the channels have to be profiled along these
criteriaandtobeevaluatedfortheirfit(Figure8).
Profiling Offerings and Channels
Offering …
Reach
• Time to spread
• Time to change
content
Comm. Direction
• Lateral comm.
• Direction
Modality
• Synchronicity
• Interactivity
+1
High
2
Book
0
4
1
Static
Website
3
Product
Training
-1 Low
• Depth/complexity
of message
Technology
Sales
Force
Outbound
Call
• Media complexity
• Technology driven
Experience
Inbound
Call
• Human factor
• Entertaining factor
• Objectiveness
High+1
Future relevance
Social Media
Low
-1
Channel
0
Fit along “Cost of communication”
Figure 9
• Future relevance
• Innovativeness
© CEPTON
The results of this assessment can be consolidated in an
“attractiveness matrix”, indicating for each possible combination
of offering and channel whether it is suitable or not.
In order to identify gaps, current Multi-Channel activities can
then be compared with the strategic framework developed. This
will point out urgently required changes to better align for MultiChannel Management already at this early stage of the project.
Channel 3 – Print AD
Offering 2 – Support practice organization
Channel 2 – Interactive customer portal
Offering 1 – Provide product characteristics for physicians
Channel 1 – Sales force call
Communication related to providing standard information on product
characteristics (i.e. classical label information, like efficacy, safety,
indication, etc., and use information to prescriber physicians
Figure8
Flexibility & speed
Message
complexity
Offering 1 – Product characteristics for physicians
Channel …
Offering 3 – Enable patient-doctor communication
Future relevanceFuture
(low
- high)
relevance
(low - high)
Innovativeness of medium
(low
Innovativeness
of mediu-m high)
(low - high)
Human relationship factor
- high)
Human rela(low
tionship factor
(low - high)
Entertaining factorEntertai
(low
- high)
ning factor
(low - high)
Objectiveness (low
- high)
Objectiveness
(low - high)
Media complexity (simple
Media compl-exicomplex)
ty (simple - complex)
Technology driven (classic
Technology- dritechnology)
ven (classic - technology)
Personalization (standardized
Personaliz-atiopersonalized)
n (standardized - personalized)
Information flow Informati
(push
pull)
on flow-(push
- pull)
Synchronicity (synchronous
- asynchronous)
Synchroni
city (synchronous - asynchronous)
Interactiv-ityhigh)
(low - high)
Interactivity (low
Lateral
(between
customer)
communi
c
ation……
Lateral (between customer) communication…
Direction (outbound --bidinbound)
irectional - inbound)
Direction (outbound - bidirectional
Depth complexity of(simple
message (simple-…
-……
Depth complexity of message
Multip(low
lication factor
(low - high)
Multiplication factor
- high)
Accessibility for target
audience- (lhigh)
ow - high)
Accessibility for target audience
(low
Breadth of coverage- (narrow
- broad)
Breadth of coverage (narrow
broad)
Time to(short
change content-(short
- long)
Time to change content
long)
Time to spread
message-(short
- long)
Time to spread message
(short
long)
Cost of communi
(low - high)
Cost of communication
(lowcati-on high)
• Personalization
• Information flow
(push vs. pull)
Offering 2 – Study results for stakeholders
• Breadth of coverage
• Multiplication factor
• Accessibility
A reasonable amount of clusters is critical to enable the
organization to match offerings and channels. Not more than
15-20 different clusters of offerings and appr. 10-15 clusters
of potential channels have proven to be a pragmatic but
nevertheless differentiating number. According to previous
experiences the granularity of offerings and channels needs to
be selected carefully since they serve as basis for the further
evaluation.
Personalization
…
Fit along “Breadth of coverage”
•
•
•
•
Static Website
Interactive Customer Portal
Social Media
…
Personal visit of sales rep detailing information to physician
FIT
FutuFuture
re relevance (low - high) relevance (low - high)
InnovatInnovativeness
iveness of medium (low - high)
of medium (low - high)
HumanHuman
relationship factor (low - hirelationship
gh)
factor (low - high)
EnteEntertaining
rtaining factor (low - high)
factor (low - high)
ObjeObjectiveness
ctiveness (low - high)
(low - high)
MediMedia
a complexity (simple - compl
ex)
complexity
(simple - complex)
TechnolTechnology
ogy driven (classic - technology) driven (classic - technology)
PersPersonalization
onalization (standardized - personalized)
(standardized - personalized)
InfoInformation
rmation flow (push - pull)
flow (push - pull)
SynchrSynchronicity
onicity (synchronous - asynchronous) (synchronous - asynchronous)
InteInteractivity
ractivity (low - high)
(low - high)
LateLateral
ral (between customer) communi
cation (low - high) customer) communication (low - high)
(between
DireDirection
ction (outbound - bidirectional - inbound)
(outbound - bidirectional - inbound)
DeptDepth
h complexity of messagecomplexity
(simple - complex)
of message (simple - complex)
MultMultiplication
iplication factor (low - high)
factor (low - high)
AccessiAccessibility
bility for target audience (low - high) for target audience (low - high)
BreadtBreadth
h of coverage (narrow - broad)of coverage (narrow - broad)
TimeTime
to change content (to
short - lochange
ng)
content (short - long)
TimeTime
to spread messageto
(short - lspread
ong)
message (short - long)
CostCost
of communicationof
(low - higcommunication
h)
(low - high)
© CEPTON
Adapt to product specifics
After having achieved a general agreement on how to best match
certain channels with defined offerings/communication needs,
the strategic framework needs to be adapted to match productindividual requirements and TA-specifics for each given portfolio.
In order to proceed, product characteristics such as
reimbursement, pricing, target group, patent expiry, etc. need to
be reviewed. Based on these characteristics the team will be able
to adjust the initial framework of the multi-channel strategy to fit
with product needs for the respective brands. Such needs could
be manifold, like “increase compliance”, “combat patent expiry”
or “advertise disease management program”.
Define future channel mix within
budget
The next step will be to integrate identified channel-mix and
product campaign into existing budget planning. Matching the
LRP (long range plan) per product with the suitable offerings and
channels will lead the team to precisely allocate budget to the
different channels for the years to come (Figure 10).
Budget allocation per product
Product specific channel mix
…
Offering 3 – Support practice organization
Offering 2 – Study results for stakeholders
Therefore, implementing a new business model by rolling out a
multichannel approach will unconditionally require organizational
adjustment. Besides the necessary organizational interfaces,
reporting requirements etc., concrete resource planning is a key
task, as one of the major goals of Multi-Channel Management is
to decrease sales and marketing costs with the need to invest
into new activities and offerings in parallel.
Stacking resource requirements for all offerings on top of each
other will allow the team to derive FTE requirements, interfaces
and organizational reporting lines etc. (Figure 11).
Resource and interface requirements
Resource requirements per defined offering
Sales
 FTE requirements
 Sales Force: xy FTE
 Marketing: xy FTE
 Multi-Channel Mgmt.: xy FTE
Offering 1: Support
practice organization
Offering 2: Adverse
Event Reporting
…
Channel Mix and Budget Allocation Product n
Channel Mix and Budget Allocation Product 3
Channel Mix and Budget Allocation Product 2
Channel Mix and Budget Allocation Product 1
 Interface Requirements
 Common resource allocation
 Common contact path planning
 …
Offering 3:
Compliance Interaction
Offering n: …
Fit along “Breadth of coverage”
Offering 1 – Product characteristics for physicians
+1
High
2
0
Channel
1
100%
100%
Sales Force
Social Media
4
3
MultiChannel
Management
15%
Book
Static
Website
5%
Outbound
Call
10%
Inbound
Call
Organizational requirements
Marketing
 Organizational consequences
 Reporting lines
 Alignment
 …
Low
-1
-1 Low
0
High+1
Fit along “Cost of communication”
+
70%
40%
0%
0%
Long Range Plan (LRP)
Figure 11
30%
50%
50%
Sales
Sales
Force
Force
Figure 10
80%
40%
Online
Phone
Phone
© CEPTON
85%
Messa- Print
Print
ging
Based on the strategic approach described above, a roadmap to
lay out deliverables, timelines and responsibilities will ensure a
consistent and pragmatic realization of the venture.
© CEPTON
Having finished this, the team will be proud to present a clear
and balanced Multi-Channel Strategy across the defined product
portfolio, including all customer specific needs. However, the
organization will realize by time that a strong need to change
exists.
Align organization
Today, Marketing & Sales still is often organized by channel
and not fully aligning and integrating activities across the entire
organization leading to loss of efficiency and reporting conflicts.
To summarize, defining a balanced Multi-Channel Strategy
requires companies to “step back” and to answer few but
important questions. Only that will allow replacing opportunistic
and fragmented activities by a well-prepared and thoughtthrough strategy, leading to significantly reduced cost in the near
future. It is a paradigm-shift that companies have to prepare for,
not a short-term fashion.
Important questions to answer
• What communication needs will our customers have?
• How can we identify channel preferences per customer?
• How do product/TA specifics influence our channel selection?
• How can we direct our communication through the most
suitable channels?
• Can we create a “pull-effect” for products instead of pushing?
• What do we need to do to dissolve existing channel silos?
• Which organizational changes do we need to make?
• How can we embed sales force activities into other channels?
• Which customer information will we need to proceed?
About CEPTON
CEPTON is a globally acting strategy consulting firm. Our
company was founded to provide a new consulting approach
and advice to clients who are seeking pragmatic solutions for
their strategic questions. We believe in small teams of senior
executives with many years of experience in strategic issues and
operative management gained hands-on in the industry or major
other consulting firms.
CEPTON relies on the in-depth knowledge of a specific sector of
activity as its mainstay.
It is not generic methods but knowledge matured over the years
in a given national and international industry environment that
will generate success.
Our services are built on partnership with our clients and rely
on the quality of our executives who are time-tested in finding
customized solutions “together with” our clients rather than “for
them”. We offer experts to work as interim managers of our clients‘
companies, if desired, where they take an active responsible part
in driving the implementation in a timely and effective manner.
Munich
Berlin
Paris
New York