sales channel strategies

Sales channel strategies: The 10 pitfalls of multichannel marketing

The majority of pharmaceutical companies intend to invest in multichannel marketing (MCM) over the next two years. However, the companies are proceeding differently professionally. During the implementation of MCM typical problems occur again and again.

 

86 percent of pharmaceutical manufacturers intend to invest more in digital offerings over the next two years and thus expand their multichannel marketing (MCM). At the same time, there are very heterogeneous attitudes to the MCM as well as to the optimal mix and possible return in the specialist areas. The companies differ strongly in their willingness to invest.

1.No available strategy

The most fatal pitfall is having no strategy. Often MCM is approached too fast. The scope and design of the MCM are closely related to the core of the commercial model. Successful enterprises give the topic space on top management level and consider it comprehensively in order to derive a sustainable MC strategy. Questions regarding the current and future business model, goals and target groups, positioning of products, the channel mix up, the company structure and the Controlling/KPI system should be addressed and answered.

2. Multichannel as a „saviour in need”

The fact that companies often see MC as a “saviour in need” fits in well with the lack of strategy. This is a fallacy. MC needs time – successful companies have been systematically investing in market and customer understanding for years and have gathered their experience in pilots.

3. Initiate cost saving initiatives

MCM is seen as an approach to save costs. Manufacturers often try to jump on the MCM bandwagon with the primary goal of reducing costs. Because the high setup costs are underestimated and no sufficient budget is set, the failure of the half-hearted initiatives is often pre-programmed.

4. Know-how is underestimated

It is often said: “MC can be covered by marketing”. But MCM needs special knowledge: both in terms of concept and content and in terms of skills, and not only in marketing. New contents must be developed, and channel preferences recognized.  Additionally, legal questions need clarification and an appropriate customer approach requires new skills. Those who are good at personal conversations are far from self-confident with video calls: very few virtual sales reps are being recruited from hundreds of good sales representatives.

5. Use and measurement of channels not coordinated enough

Successful sales marketing depends on the right mix, because different channels only unfold their full effectiveness in combination. The prerequisite for this is that they are networked accordingly, i.e. the content and timing of messages must be coordinated.

6. Arbitrarily approaching Multichannel Marketing

Especially in cases where there is little time to define a strategy, the organisation of the topic is often decided ad hoc. MCM is then simply assigned “somewhere” in an existing department with capacity. As MCM depends on the interconnection and cross-linking of people, an essential driver for success is eliminated right from the beginning. The ideal structure therefore comprises a central department for MCM with close interfaces and regular exchange platforms of the respective business units.

7. Communicate analog contents digitally

If too little time and money is available for the composition of a MCM, already existing content is used in new ways. Often the use of iPads for the sales force team is already celebrated as MCM. But the presentation of classic materials on the iPad is not MCM. This approach only succeeds when new content and actual added value is created, and the sales force is actively integrated into the networked MCM via iPad.

8. Acting out of actionism

Actionism is a common driver of MCM. A large number of initiatives are set up because “the others also do it that way”. In such hurry only Me-Too solutions are possible, without clear goals and meaningful integration into the channel mix, which then do not offer an increase in value.

9. Lack of courage, openness and willingness to take risks

The Big Pharma business model is certainly one of the most professional in comparison to other industries. In fact, there have been serious cuts in sales and marketing, especially in the last ten to fifteen years, but no fundamental disruptions. MCM changes that. With MCM, a company leaves the safe harbour. Here confidence in the own business decisions is necessary. It is supportive if companies have already established a culture of error and learning, so that initial failures and start-up difficulties do not lead too quickly to discouragement.

10. The willingness of the manufacturers is overestimated

The field sales force is still the most popular channel in pharmaceutical sales, and many of the ‘new’ or now increasingly used channels are perceived as ‘disturbing’ in comparison. The market cannot (yet) be completely covered by new channels. A clear indication of this is, for example, the so-called e-permissions. Depending on the target group, 30 percent coverage already means a top value. This percentage also sets the filter for full MCM.

Outlook

Almost every marketing and sales manager will relate one or the other of these ten points as an example in their own company. Be it because it was possible to foresee a pitfall or because oneself came into the situation to learn something new. All ten points are certainly more easily listed than solved – the common ground is that there is no patent solution. There are no quick wins in the MCM, but proven management principles apply: Clean analyses, a clear strategy as well as patience and persistence in implementation pay off. Along the way, a certain tolerance for frustration and perhaps the courage to abandon certain experiments are required.

Contact us

Partner

Christian Zuberer

christian.zuberer@homburg-partner.com
Tel.: +49 621 1582-212

Managing Director & Partner

Dr. Michael Scholl

michael.scholl@homburg-partner.com
Tel.: +49 621 1582-0