Why Pharma companies have to digitalize their sales and marketing operations.
The pharmaceutical industry has been slow to change, but it must. Transformation is complex but the benefits are numerous and approaching its market with an omnichannel digital-first approach is now a must.
The way pharmaceutical buyers purchase has changed and is disconnected from how wholesalers and manufacturers sell
The pharmaceutical industry has been slow to change, and is notoriously resistant to it. It has stuck rigidly to its antiquated sales approach relying heavily on its salesforce in the field to visit healthcare providers (HCPs) in person, shaking hands, and handing out samples and information.
Many actors launched digital initiatives to try to change this, but the wheels of transformation in this industry turn very slowly, and have not followed the pace elsewhere and the digital gap is widening into a chasm.
On the other end, looking at the buyers and prescribers (who sit at the end of the sales journey), they are becoming increasingly disconnected from the distributors and manufacturers. They favor fewer interactions with sales reps, instead, they prefer to rely on online external sources for information, reviews and recommendations. Even if they'd prefer it "the old way", they have way less time for it, as they are more and more challenged in their day-to-day core activities.
Also, increasing healthcare regulations have progressively reduced the face-to-face discussion between Pharma reps and HCPs. And notwithstanding that, HCPs want to arrange their buying activities at any time of the day and from anywhere, and need to dramatically streamline these activities. Digital is, for them, the answer.
The demand for going digital was in place well before the ongoing pandemic and of course, has been accelerated by it.
Pre-pandemic, a B2B eCommerce survey showed that 74% of B2B buyers research the majority of their purchases online before deciding, and this trend surely applies to hospital procurement managers, pharma distributors and wholesaler buyers.
In the aftermath of Covid-19, a report by Bain last September forecasts that restrictions on in-person sales rep access are likely to persist even after a Covid-19 vaccine or treatment is available. It is no surprise that pharma companies are planning (if they haven’t already) to invest in digital channels. And, even if in-person visits do become possible post-Covid, reps will still need digital channels to support them in providing flexibility in how HCPs have become used to interacting with them.
Benefit 1: Embracing digital omnichannel sales enables Pharma companies to attract new customers, penetrate new markets and increase sales performance
Beyond the simple fact of trying to adapt to the way your customers buy, which seems a good enough idea by itself, omnichannel sales strategy has a host of other benefits.
An obvious one lies in the fact that it enables manufacturers and distributors to engage with customers who were previously beyond reach. This is true for most segments, whether we speak about non-prescription drugs, prescription drugs or even the API market (alive pharmaceutical ingredients) with the exception of governmental level type of Pharma (e.g. buying vaccines) where demand is not really impacted by the channels through which they sell.
Digital sales channels carry a unique opportunity to expand, be it expanding into new geographies, or new segments (selling to new types of buyers), and for the long term. It’s an opportunity to reimagine, redefine and revolutionize the customer experience as well as improve sales rep productivity into the future.
Benefit 2: Embracing digital omnichannel sales will improve retention and increase average customer sales
Another direct benefit of engaging into a fully omnichannel sales strategy is to improve retention, and increase average sales with the existing customer base. A 2020 survey of 3,000 HPCs in the US indicates that only 40% of doctors ever engage with a sales rep without any restriction, a 6% drop compared to the previous year.
In a time where competition is tougher than ever, especially with the development of generic drug manufacturers, building a digital relationship with both the direct buyers (be it hospital procurement managers or others) and the prescribers (HPCs) is key to securing and even increasing the average size of business with cross-selling and new product selling.
Benefit 3: Embracing digital omnichannel sales will streamline sales processes, improve operational efficiency and reduce costs
As the Pharma and Healthcare market keeps growing, it is also getting more and more competitive, focusing on managing costs, streamlining operations and delivering true outcomes. Both on the Buy-side and on the Sell-side, Digital Transformation is expected to streamline process efficiency and reduce costs. Not only will it have a direct impact on buyer behavior, as described above, it is equally true for the sell-side.
By digitalizing and automating sales and marketing-related processes, whether in direct relation to the buyer, the relation to the prescriber, or even the relation with the end-consumer, Pharma companies have a unique opportunity to substantially impact their overall sales and marketing operation optimizing them while seriously reducing their costs.
The old way of relying entirely on an army of sales reps for marketing, evangelization, education to impact the level of sales has long been proven as a very high-cost that digital can reduce. But, like in any other industry, how to replace this sales model, and what is the right channel mix remains a very open question.
It seems, like in many other industries, that we're nowhere close to the end of Pharma sales reps as predicted ten years ago by the WSJ , but in a hybrid mode where high-cost sales reps focus on high-value tasks that Digital can not properly replace.
The opportunity of building an experience platform for digitalizing your sales and marketing strategy
While the benefits are great, the needs are not new and the urgency is there, there's no secret that the reason for the industry not to be yet totally ready to leverage the digital opportunity lies in the fact that it's not that simple!
Typically, B2B sales is complex, in Pharma, it's even more complex for many reasons: regulations, privacy, security and a very complex supply chain. At every stage of the supply chain, at every step of the buyer journey, regulation and traceability are important and crucial requirements.
It's also complex by the very nature of its value chain. Unlike simple consumer business, Pharma B2B involves many stakeholders, even more than in regular B2B relationships.
Luckily, digital technology has made great progress in the past few years. In particular, B2B Experience and Commerce technology has evolved and some Digital Experience Platforms (DXPs) are ideal for such challenges compared with the previous traditional all-purpose web software options.
For example, as the pharma industry requires strict adherence to regulations, legal mentions, as well as technical documentation, approval workflows and the ability to set up self-service portals, becomes paramount. Such portals enable pharma companies to share account-specific information with their clients (sales material and background reports about the products as well as order history, invoices, etc.) and deliver content that is relevant for them through personalization.
For buyers, they can self-serve and take specific actions in their buying process such as selecting products, calculating prices, requesting quotes or any other action that would help them in making their purchase.
At Ibexa, we develop a Digital Experience Platform focused on B2B relationships enabling Pharmaceutical companies to digitalize their sales strategies by supporting all channels required for their go-to-market: from managing the relationship with practitioners and HCPs, to providing direct online purchasing and e-commerce options for procurement managers up to engaging directly with the end customers when and if needed, be it for a pre-sales, sales or post-sale interactions.
Contact us if you are interested in exploring how a DXP can support digitalizing of sales and marketing for Pharma and Healthcare.