Are You Under Pressure to Justify Your CRM Spend but Finding it Difficult to Prove?
The promise of customer relationship management (CRM) to the pharmaceutical company was the transition to a customer-centric organization, with increased revenue through the selling of products to a stable and compliant set of customers. The promise to the customers was a seamless marketing experience, from the initial sales message, to placing an order, through to customer service.
Senior executives at virtually every major pharmaceutical company are frustrated. They have seen minimal (provable) return on huge investments in CRM systems. Often the return on these investments has not covered their cost of acquiring the system, nor the opportunity cost of management time and energy, let alone provided an adequate return to shareholders. Consequently, in a period of declining pharmaceutical sector growth, and intense profitability pressures, many companies are facing a key strategic choice: whether or not to continue investing in CRM – and if so, how?
CRM initiatives have the potential to drive significant improvements in profitable growth and justify continued investment. But most pharmaceutical companies must take a dramatically different approach if they want to create true strategic and profitable advantages. Companies unwilling or unable to change their traditional approach are likely to lose (gradually at first and more rapidly in three to five years) their ability to retain their most profitable customers and generate reasonable shareholder returns.
Pharmaceutical companies are outpacing other industries in CRM adoption by two- thirds. These are the current figures:
• 40% pharma companies have CRM roll-outs in progress (compared with 17% non-pharma companies)
• 20% pharma have already completed a CRM implementation
• 74% CRM within pharma apply it to their sales functions
• 68% apply it to their marketing functions
• Only 16% pharma plan to integrate their CRM for sales, customer service & market research -- fitting the way pharma tends to operate in silos
The Gartner Group finds 70% of CRM projects result in losses or no bottom line improvement in company performance. Most large pharma companies have some form of CRM software and system, but more than 50% are disappointed with it (McKinsey 2004) due to minimal return on huge CRM investments – well over $2 billion annually in the US alone. Often the return on these investments has not covered their dollar cost or the opportunity cost of management time and energy, let alone provided an adequate return to shareholders.
Given that 70% of CRM projects result in losses or no improvement, measurement of return is vital. One challenge is knowing what you are meant to be measuring. Another challenge of measurement is that the definition is contingent on the level at which it is practiced in the company. Measurement has focused on areas such as
• Link between satisfaction and business performance (Kamakura et al 2002)
• Link between customer loyalty and profitability (Reinartz and Kumar 2000)
• Customer profitability and heterogeneity (Niraj, Gupta and Narasimham 2001)
• Customer loyalty programmes (Verhoef, 2003)
CRM assists pharma in customer acquisition, customer retention & relationship change management and customer relationship value growth. One strong economic value of CRM is in patient retention but the other areas are also valid applications within pharma. How can you get economic profitability from a system if you have no structured approach to determine what aspects need to change in order to obtain to maximum economic impact?
In order to untangle these interrelated elements, we need a sophisticated CRM analytics. The objective is to disentangle, identify and quantify the relative impact and value of each element of the CRM process on company performance:
- Identify the components of the CRM system currently driving financial performance
- Calculate optimal CRM process and effort allocation and,
- Test results to validate approach.
Benefits of Using CRM Analytics
94.8 analytics provides a solution to these issues that has the highest degree of accuracy found in the market today. 94.8 analytics is a sophisticated system that identifies the components of the CRM system currently (not historically) driving market performance, then calculates optimal focus and tests the results to validate approach. From this you will:
• Identify all CRM factors (software, organizational, people, customer initiation, customer maintenance, customer value growth) really influencing the bottom line
• Identify strengths and weakness related to the company/brand size
• Evaluate which aspects are having the most impact on actual bottom line
• Quantify the impact from each CRM aspect
• Determine the most effective CRM focus
• Give senior management the confidence to support a brand with the right resources
Case studies available upon request.
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• VP Sales and Marketing
• Sales and Marketing Directors
• CRM Strategy Directors
• IT Directors
• Heads of Sales Force Effectiveness
• Sales Operations Managers
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CONTACT US TODAY FOR YOUR FREE CASE STUDIES AND DEMONSTRATION OF 94.8 ANALYTICS IN ACTION WITH REAL PHARMACEUTICAL BRANDS.
Why Invest in these Analytics?
Independent research on our system showed an accuracy of 94.8%
over several years.
Independent research on our system showed an accuracy of 94.8% over several years.
You will be able to:
•Identify all CRM factors (software, organizational, people, customer initiation, customer maintenance, customer value growth) really influencing the bottom line
• Identify strengths and weakness related to the company/brand size
• Evaluate which aspects are having the most impact on actual bottom line
• Quantify the impact from each CRM aspect
• Determine the most effective CRM focus
• Assess which constraints have significantly hampered recent customer value efforts
• Identify alternatives for organizing future customer value initiatives for success
• Identify two to three high profit customer segments on which to experiment with this new approach
• Develop the leadership and organization to pursue at least one to two of these experiments
• Employ the new analytics outlined above to develop insights and ideas for new customer solutions
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TODAY FOR ANY FURTHER INFORMATION ON ANY ASPECT OR TO SCHEDULE A MEETING FOR A DEMONSTRATION.
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