By Charles Firneno
May 12, 2005 | A few years back, a pharmaceutical sales force war raged, as drug companies competed for physician time by saturating the market with sales reps. The customer relationship management (CRM) message away from brand and towards the “customer” resonated with many executives. Accordingly, sales force automation (SFA)/CRM system installations grew, with vendors like Siebel and Dendrite grabbing most of the new business.
Today, with the likes of Pfizer announcing they are restructuring their sales force for the post-saturation model, that war is over. In theory, these conditions should bode well for CRM analytics, which purports to deliver higher returns for fewer sales dollars. Most generic CRM analytics solutions, however, are not suited to the unique “customer” environment drug companies confront, nor do they maximize vital third-party content on which drug companies depend. Solving these problems will determine the winners in the CRM analytics pharma sector.
Inside a pharma company, the term “customer” can refer to patients or doctors, payers or partners. And within each of these groups, the simple question of identification is compounded and permutated. A doctor, for instance, is identified by multiple addresses, license numbers, authorization codes, and payer/network associations. In theory, a drug company CRM system would integrate physician data for the SFA function, but also for development (principal investigators), human resources (sales organization and performance), marketing (programs, research, and analytics), regulatory (sample), and the customer managers (payers). This is rarely the case. Most drug company physician CRM systems link only two or three of these functions.
One would also assume that CRM analytics always begins, or at least resides, within a CRM system, but many drug companies use the customer management modules of their SFA systems as a physician Business Data Warehouse (BW) platform. Because SFA systems are oriented around the sales rep in the field, using a focused SFA system as a platform for analytics can waste time and resources. Also, many of the largest pharma still do not have a single identifier for each physician “customer.”
Whatever the BW database, in order to properly capture, cleanse, and validate physician identity information, drug companies commonly use a proprietary database in addition to their in-house master list. Because of the complexity of this process, some vendors consider this kind of basic CRM housekeeping “analytic”. Some basic CRM packages can be configured to perform lower analytic functions such as reach and frequency and POA cycle analysis within the BW.
Content is Critical
To perform analytics, a drug company begins by combining its own master list data, an outside proprietary physician list, with an AMA-type list, where available. “Activity” data captured at the pharmacy, billing, and provider levels are added to the physician identity data. Custom analytic cubes, sometimes using Online Analytic Processors (OLAP) interfaces, are then designed to establish query and reporting parameters. Portals are often also added to deliver content to users both within and outside the enterprise-sometimes even back to physicians. Because they understand both content and technology, hybrid vendors like Dendrite International that offer content, software, and services have an advantage over pure play vendors in the pharmaceutical space.
The mixing of content with technology extends beyond the creation of master lists and into higher analytic functions. So-called RX companies specialize in delivering either higher analytics functionality or identity and activity data, or both. Typical solutions include script data derived from the pharmacy level or the transaction clearinghouse and content linked to customer data.
Although new CRM/SFA implementations have contracted to only a handful per year, growth rates and margins at companies that provide high-value analytics have been very healthy. Some of the large horizontal vendors are currently building the customer identity foundations for large-scale analytics at the top five pharma companies. The next step will require ambidextrous vendors to develop solutions that fit both the customer needs and the available content.
Charles Firneno is a research manager with Life Science Insights. Email: email@example.com.