EphMRA 2014 Pharmaceutical Market Research Conference Session 16 Moving from product centric to customer centric A healthcare case study in the healthcare arena Asif Javed, Optimal Strategix Group & Joe Schneider, BD EphMRA 2014 Pharmaceutical Market Research Conference Session 16 Chair: Thomas Hein EphMRA President Moving From Product Centric to Customer Centric Customer Centricity “Customer centricity is a strategy to fundamentally align a company’s products and services with the wants and needs of its most valuable customers. That strategy has a specific aim: more profits for the long term.” Professor Pete Fader Wharton Business School and OSG Advisory Board Not All Customers Deserve Your Best Efforts Moving From Being Focused on Products to Becoming Customer Centric Situation: BD, Fortune 500 Global Medical Technology Company • Faced with increasingly competitive market conditions • Finding it difficult to differentiate their brands and meet the differing needs of their customers • Slowdown in growth of core products and slow adoption of new products coupled with industry trends and pressures, resulted in further intensified competition and lower margins • Products were developed as sporadic response, resulting in only limited success • Complex Customer – hospital C-suite or procurement has different needs than individual HCP Decision was made to fundamentally develop and organize around a single fact base on customer needs and outcomes BD Issues Similar to Healthcare Market Challenges INCREASED COMPETITION ACCELERATING PATIENT FOCUS CHANGING VALUE CHAIN • Too many brands • Increased information • “Fixed Reimbursements” • Less costly competitors • Personalized Interventions • New, emerging competitors • Smart Devices (information & treatment compliance) • New influencers and decision makers • Global landscape • Increase of data without increase in insights IMPLICATIONS FOR LIFE SCIENCES FIRMS • New Basis of Value • Differentiation, Positioning, and Customer Insights are keys to growth • Analytics and insights become foundational to growth • Customer Centricity now vital Customer Centricity Requires a Specific Fact Base of Customer Understanding the “WHO” the “WHAT” + the “WHY” + The Key to Growth is a Differentiated Brand and Experience that Defines Clear Value LONG TERM GROWTH ADVANCEMENT TO SOCIETY MARKET RELEVANCE FUTURE THINKING Segmentation is a Key Enabler of Becoming an Effective Customer Centric Organization                                          All Customers are the Same Customers Have Similar Decision Making Constructs that Allow us to Efficiently be Customer Centric Each Customer Is Unique; How can We be Effective? Customer Segmentation – An Illustration DEMOGRAPHIC BEHAVIORAL OUTCOMES BASED • Use Competitor needles • Inject BID • Use one needle a day • Buys one month at a time • Seeks Innovation to help with dexterity issues • • • • Age Income Education Gender • • • • Use Competitor needles Inject BID Use one needle a day Buys one month at a time • Use Client needles • Injects insulin QD • Buys 100 Units a time • Focus on improving their disease • Use Client needles • Injects insulin QD • Buys 100 Units a time • Use Client needles • Injects Insulin QD • Buys 100 Units a time • Focused on reducing out of pay costs Developing the Dimension to Test Followed a Robust and Structured Process that Engaged Key Stakeholders 1 2 Critical Inputs and Analysis Secondary & Industry Research 3 1 1. 2. 3. 4. 2 ------------------------------------- 5. 6. 7. 8. ------------------------------------- 4 Internal Interviews Customer Qualitative Interviews Benefit Groups & Statements Growth Hypothesis & Priorities 3 n Customer Attitude Statements 1. 2. 3. 4. ------------------------------------- 5. 6. 7. 8. ------------------------------------- Hypothesis were Evaluated By the Needs/Outcomes They Could Deliver in a Trade-off Exercise • FOCUS: Which benefits are most important for each segment in driving purchase decisions? • Benefit trade-off exercise more accurately uncovered the choice model of each segment OSG’S FUTURE RESPONSE SEGMENTATION PATIENT CONSIDERATION CATEGORY ATTITUDES BENEFITS MOST IMPORTANT TO EACH SEGMENT CURRENT BEHAVIOR EXISTING PERCEPTIONS BENEFIT TRADEOFF EXERCISE Reduction in the area of skin affected by psoriasis Treatment does not require injections BARRIERS TO TREATMENT FUTURE BEHAVIOR Technical Research Challenge • Technical Challenge: Small universe sizes and a very large number of benefits to trade-off • Proprietary adaptive approach ASEMAPSM utilized • Providing: – Solid data at individual respondent level – Understanding more of decision making process (emotional and functional) – Ability to handle larger number of attributes (decision elements) – Use smaller sample sizes – Simple and fun choice tasks – Greater differentiation Respondents Were Segmented Based Upon the Key Benefits That Drive Preference *Ranked by importance to Segment 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Benefit Enable a patient-centered care approach Improve patient infection prevention Increase data accuracy Increase automation Enable the right distribution solutions Shorten recovery / hospitalization times Enable preventative treatment / diagnosis Enable faster, more accurate diagnosis Enable supply chain optimization Provide more Point of Care solutions Improve patient infection prevention Facilitate work flow optimization Improve consistency of care Increase automation Provide lower cost solutions Conduct employee product utilization training Collect relevant data from more touch points Increase workforce productivity Enable greater throughput Orient on medical condition management Advance Remote/ Continuous monitoring Enable home care treatment Offer electronic ordering and VMI Improve data mining and reporting Early detection screening (e.g. MRSA) Comply with “meaningful use” guidelines Provide performance guarantees Deliver comparative effectiveness research Provide integrated solutions Facilitate Integrated care Enable long term care sites Provide performance guarantees Employ sustainable practices Lower maintenance and service costs Provide lower cost solutions Optimize TCO/ Total Cost in Use Reduce waste (landfill impact, etc.) Provide best practices training Provide Health Technology Assessment (HTA) Reduce medical errors Reduce HAIs Provide best practices around product usage Optimize material consumption Provide single point of contact Provide strong industry knowledge/ expertise Enable the right distribution solutions Develop safety-engineered products Provide ongoing staff education Conduct business in a socially responsible way Help design/ monitor customer on-site trials 1 2 3 4 5 6 7 8 9 10 Segment 1 Segment 2 Segment 3 Segment 4 912 902 852 684 684 639 572 513 513 479 429 385 385 359 322 289 289 270 241 216 216 202 181 162 162 152 136 122 122 114 102 91 91 85 76 68 68 64 57 51 51 48 43 39 39 36 32 29 27 24 791 254 249 727 191 187 925 545 143 140 694 409 107 105 520 307 80 79 390 230 60 59 293 172 45 44 220 129 34 33 165 97 25 25 123 73 19 19 93 55 14 14 69 41 11 11 52 31 8 39 453 380 750 340 285 563 363 255 214 422 272 191 160 316 204 143 120 237 153 107 90 178 115 81 68 133 86 60 51 100 65 45 38 75 48 34 29 56 36 26 21 42 27 19 16 32 20 14 24 15 698 721 564 324 541 423 668 243 406 317 501 182 304 238 325 326 228 178 244 245 171 134 183 183 128 325 327 138 326 244 245 103 245 183 184 77 183 327 138 58 328 245 103 44 246 184 78 33 138 326 Benefit * Enable a patient-centered care approach Improve patient infection prevention Increase data accuracy Increase automation Enable the right distribution solutions Shorten recovery / hospitalization times Enable preventative treatment / diagnosis Enable faster, more accurate diagnosis Enable supply chain optimization Provide more Point of Care solutions Segment 1 912 902 852 684 684 639 572 513 513 479 Segment 5 772 653 222 579 490 167 587 434 367 125 440 326 275 94 330 244 207 70 248 183 155 53 Ranked 186 137 116 40 139 103 87 30 104 77 65 22 78 58 49 17 59 43 37 13 44 33 28 9 33 24 7 25 Illustrative Segment 6 453 380 750 340 285 563 363 255 214 422 272 191 160 316 204 143 120 237 153 107 90 178 115 81 68 133 86 60 51 100 65 45 38 75 48 34 29 56 36 26 21 42 27 19 16 32 20 14 24 15 Segment 2 Segment 3 791 254 249 727 191 187 925 545 143 140 453 380 750 340 285 563 363 255 214 422 RESULT: Segments That Were Distinct, Identifiable, Actionable 1 2 3 4 5 6 7 8 9 10 Benefit Enable a patient-centered care approach Improve patient infection prevention Increase data accuracy Increase automation Enable the right distribution solutions Shorten recovery / hospitalization times Enable preventative treatment / diagnosis Enable faster, more accurate diagnosis Enable supply chain optimization Provide more Point of Care solutions Segments were also profiled with: • Behaviors • Attitudes • Brand Perceptions • Customer Characteristics impact on Brand Choice Segment 1 Segment 2 Segment 3 912 902 852 684 684 639 572 513 513 479 791 254 249 727 191 187 925 545 143 140 453 380 750 340 285 563 363 255 214 422 Fact Based Process For Identifying Target Segments ILLUSTRATIVE CUSTOMER TARGET SEGMENTS US BLUE HCP SEGMENT Primary US ORANGE HCP SEGMENT Secondary US BLUE HCP SEGMENT US YELLOW HCP SEGMENT US PURPLE HCP SEGMENT US ORANGE HCP SEGMENT Product Portfolio Financial Attractiveness Organizational Capabilities TARGETING CRITERIA/FILTERS Targeting Frameworks and Tools to Identify The Segment Where Stakeholders Belong An iPad based or excel based customer classification tool allowed sales representatives to: • Focus on insightful questions • Identify the segment of the stakeholder real time • Capture and track stakeholder characteristics • Link to segment focused sales aids • Integrated into CRM system Impact • The OSG engagement changed the strategic direction at BD • It continues to impact “Cross Functional/Cross BU” activities and has impacted the core functions of the organization, Sales, Marketing, and R&D SALES: 1. Aligned 4 BU sales organizations to align and agree on one single CRM System, one Sales Training approach and one unified Sales Process. 2. Streamlined sales activities to target key segments and improved sales calls and prospects – Enabled the sales organization to quickly screen and identify the validity of sales opportunities, by knowing what “Customer Segment” owns the opportunity and the likelihood of them moving the opportunity forward – Enabled the sales team to improve the velocity of opportunities in the sales funnel – Decreased cost to serve Impact MARKETING: 1. Marketing and messaging were targeted to the key segments across all products and solutions – Entire product portfolio messaging was realigned to be directed at the key target segments 2. Elevated the relevance of the marketing function as a key enabler of success to the business, and key partner to the sales teams R&D: 1. Entire R&D portfolio was aligned to needs of key customer segments – Multiple investments were reallocated to more profitable segments 2. Implemented as a first screen to understand how to assess the potential of new technology – Fast first screen to understand how much of the market the technology may appeal to – New product development more structured and moving through faster Key Learnings • Gain team alignment – over communicate and gain input from the cross functional team whenever you can, get R & D and HEOR to be part of the marketing team • Create alignment through extensive team alignment workshops and interviews • Think about the end in mind and implementation • Utilize technology to take findings further • Don’t let methodology limitations drive your project – look for new and creative solutions, don’t be shy about seeking help from academia • Marketing insights can be key to transforming organizations for the better – all of you can make a huge difference • Be strategic and think big EphMRA 2014 Pharmaceutical Market Research Conference Session 16 Moving from product centric to customer centric A healthcare case study in the healthcare arena Asif Javed, Optimal Strategix Group & Joe Schneider, BD