Various industries and particularly those dealing in consumer white goods or e-retailing work hard to not just create but expand set of loyal customers. They understand lifetime value of the customers as some of these purchase habits are passed down to the next generation which enhances the scope immensely
Similarly, this concept is extremely critical in pharma industry, though the intensity and scale of implementation is not as high as for the consumer goods
The concept of CRM is often misunderstood and loosely used by many in the pharma sector. The sole purpose of CRM is considered to be obliging customers and thus influencing them to prescribe your products. However, if one looks at the CRM holistically, there is the lot more than just obliging to get support. If you google for the meaning of CRM, following is the explanation given
Customer relationship management (CRM) is a term that refers to practices, strategies, and technologies that companies use to manage and analyse customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. CRM systems are designed to compile information on customers across different channels — or points of contact between the customer and the company — which could include the company’s website, telephone, live chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers’ personal information, purchase history, buying preferences and concerns.
There are very few operating companies who work to develop customer in a holistic manner as described above
I always make it a point to draw the attention of new recruits on significance and value of each Doctor on their visiting list. It is because the core business even today as in the past is highly dependent upon the prescribers and the prescriptions written by the Doctors. Both prescribers and prescriptions remain at the fulcrum of the entire momentum in business
The question which I pose to all my new recruits is
WHAT IS THE LIFETIME VALUE OF THE CUSTOMER (Doctor) FOR THE COMPANY WHICH YOU REPRESENT?
After a long pause, I get a response which shows clutter in the thought process. It is not possible to assign a lifetime value of Doctor to a pharmaceutical company but there is no denying that the value is worth making efforts to retain and develop customers we meet
Given below is just a hypothetical value of the business which a Doctor can generate in his lifetime for a pharma company with the assumption of 30 years of practice. This is put in a very simplistic way as there are many ways to arrive at the LTV of a customer. The idea here is to drive home the likely gain or loss of business by virtue of retaining or losing the customer. For the sake of convenience, I have divided Doctors into 3 categories giving 20k / 10k and 5 k of the business per month and predicted the lifetime value for each of the Doctors belonging to these 3 categories
However, if you consider the following in addition to the above-mentioned table depicting lifetime value of a Doctor this value will increase manifold
• In chronic management of the disease, the patient continues buying the medicine prescribed for years together and is normally taken for a lifetime with some variations in dosages
• There is an annual price increase of close to 7 to 10% for most of the products which add to the value
• There are specialist and renowned Doctors who would influence GPs and RMPs to take up the medicine prescribed by them which further adds to the sales
• Over a period of time with increase in patient population, the same doctor gets opportunity to prescribe more with each passing year
• Also, a loyal customer would pick up additional products of the company over a period of time which will further add to the value of business
All the above will have compounding and multiplying effect over and above the business indicated in the table. I leave it your imagination to arrive at likely value of the business from each of the Doctors
I am sure all of us are keen to retain and develop these customers. There are a few measures and activities which can be executed with discipline to achieve desired results in this context
We scrutinise the doctor’s visiting list every year and issue necessary instructions to the field for revamping/retaining and classifying customers into core or important / targeting through product prospect matching etc
However, this may not be enough to achieve the objective of retaining and developing customers. we necessarily have to ask if there is an adequate back up to support the cause.
The development of big data management and interpretation in INDIA as in WEST would further strengthen the process of building a business.
It is obvious that entire organization across function will have to work like a well-orchestrated symphony to service customer and exploit the full potential. In order to get 100% commitment from all, it is critical to instil the concept of LIFETIME VALUE of the customer across organisation
The points mentioned above are not difficult to execute and many of these do not cost much. The endeavour is to improve the status of each customer from non-prescriber to occasional prescriber and convert occasional prescribers to regular and loyal prescribers
There are some pharma companies in the industry who even today enjoy extremely high per capita and prescriber base in spite of stiff competition from where the learnings can be drawn for improvement.
