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Customer Experience in Pharma is About Winning the Hearts of Customers

This post was originally published on eye for pharma by Deirdre Coleman on May 1st:

In the new value-based health economy, pharma companies must understand the characteristics of next-generation consumers, who want to take increasing control of their own treatment, to become co-pilots rather than passengers in drug purchase and usage decisions.

Credit: Starbucks.com

Credit: Starbucks.com

“To build an enduring, sustainable, long-term business and consumer brand, it’s not about fancy marketing, it’s about establishing a very powerful and an unusual emotional relationship with the customer” – Howard Shultz, Starbucks

The next generation of consumers is reshaping the pharmaceutical industry much as they have transformed other industry sectors. Customers want their preferences and behaviors understood and acted upon, constantly demanding more and actively communicating dissatisfaction if their needs aren’t met. As consumers take on more risk and responsibility in their healthcare, they’re migrating from a passive recipient to a joint participant in drug purchase and usage decisions. They have edged ahead in terms of their demands and expectations and traditional pharma marketing efforts are ill-equipped to address their needs and values. In the future, medication will increasingly be designed to appeal to a particular segment’s preferences, rather than everyone’s symptoms. How can you encourage people to have as great an affinity for their favorite brand of medication as they do for their favorite brand of car? What can you do—beyond the pill itself—to encourage people to pick your brand?

Exceeding Expectations

According to best-selling author, keynote speaker and customer experience architect, Stan Phelps, putting the emphasis on customer engagement and lifetime value rather than acquisition is key to future commercial growth. “I founded 9 Inch marketing in 2009 and our philosophy is focused on the value of customer experience as a competitive differentiator and the importance of employee engagement in building a strong corporate culture. For far too long, the overwhelming majority of marketing has fixated on the eyes and ears of the prospect. Not enough has been focused on creating experiences for current customers that drive referrals and create advocates. Great customer experience is about being so remarkable that people can’t help but talk about you; that if you absolutely delight someone – they will not only come back, but they’ll bring their friends. To me, you are never meeting consumers’ expectations you are either exceeding them or you are disappointing them. In a world where 60-80% of customers describe their customer satisfaction as satisfied or very satisfied before going on to defect to other brands, ‘meeting expectations’ is no longer an option. Behavioral psychologists have long argued that only 30% of human decisions and behaviors are actually driven by rational considerations. This means that more than 70% of consumer loyalty and spending decisions are based on emotional factors. Three primary drivers of engagement are personalization, relevancy and superior customer experience.”

Insight Cultivates Connection

Pharmaceutical companies can go beyond the one-way mirror in analyzing consumers, delving into their behavior and motivations. Patients are benchmarketing their healthcare experiences against their experiences with Amazon, Starbucks and JetBlue. Pharma companies will need to face the reality that the bar is set very high in terms of peoples’ expectations of personalisation, convenience and service”.

Many pharmaceutical and life sciences companies have relied on traditional techniques of using demographics such as gender, insurance status, age, and health condition to segment the types of patients best suited for their products. But too often that approach to customer segmentation misses individual attitudes and behaviors, resulting in an incomplete picture of the consumer. “Pharmaceutical companies can go beyond the one-way mirror in analyzing consumers, delving into their behavior and motivations. Patients are benchmarketing their healthcare experiences against their experiences with Amazon, Starbucks and JetBlue. Pharma companies will need to face the reality that the bar is set very high in terms of peoples’ expectations of personalisation, convenience and service. Patients live in a world where they can do everything (banking, shopping) over the phone, where they get pinged on their mobile when their order is ready. That’s elevating the bar for the entire healthcare industry. Patients don’t always act rationally and they may not make their healthcare decisions based on best outcomes – take for example Cleveland clinic. The chief factor determining people’s selection of a hospital was patients’experience (41%), followed by physician’s decision (21%), reputation (20%) and location (18%). Patients are making decisions everyday to change healthcare providers and facilities based on the information they hear from friends, family, online and in their community.  Very quickly, a hospital or practice can become “known” for providing a certain level of patient experience, either good or bad. Consumers want their medication experience to be personalized and meaningful. If theirexpectations are met, they’re more likely to follow the proper course of treatment for longer. Whether a consumer is starting a new therapy, managing a chronic condition, or juggling multiple treatments, evaluating their needs throughout the patient journey is critical to delivering experiences that resonate with the patient”, remarks Phelps.

Customer Experience: 5 Things that Lead to an Exceptional Customer Experience

Companies don’t emotionally engage with their customers – people do. Marketing needs to become more about employees and customers and how to connect more and less about quarterly reporting and campaigns. Companies that have engaged employees grow up to three times faster than others with a company with less engaged employees.”

1)     Employees First

“I would argue that putting the employees first, customers second and shareholders last is a winning formula for any organization looking to succeed. Employee engagement is the emotional commitment an employee has to the organization and its goals, resulting in the use of discretionary effort. Satisfied employees lead to satisfied customers. Because satisfied employees care more, they are more productive, give better service, and even stay in their jobs longer. All of that leads to happier customers, who buy more and refer more often, which drives sales and profits higher, finally resulting in an increase in stock price. Companies don’t emotionally engage with their customers – people do. Marketing needs to become more about employees and customers and how to connect more and less about quarterly reporting and campaigns. Companies that have engaged employees grow up to three times faster than others with a company with less engaged employees. Employee engagement can be a competitive differentiator. Becoming a best place to work soon attracts the best customers.”

2)    Driving Loyalty & Retention

“Traditional marketing is all about building awareness for products and brands. The emphasis is on getting new customers, and very little attention is paid to retaining existing customers. The way to accomplish “more” is through added-value. It works by giving customers unexpected extras. Those extras improve the brand, drive loyalty, and promote referrals. Referrals are key. Referred customers are four times more valuable than customers acquired by other means. Why? A referred customer spends twice the amount of money and refers twice the number of customers than non-referred customers do. Unless you spend a lot of time in Louisiana, you likely haven’t heard the term ‘lagniappe.’ But this Creole aphorism has the power to transform your business. Defined as “the gift” or “to give more,” lagniappe represents the potential to turn customers into your largest sales force by exceeding expectations. According Gartner research, decreasing customer churn by just five percent can increase profits by 25 percent to 125 percent. The reason is that it’s expensive to get new customers—it’s much easier and more sustainable to keep your current customers happy and sell them more products or services.”

3)    Outside-In Approach

“Really think about what’s important to the customers, and how you can make those things great in terms of delivery. Whether stretching beyond the bounds of segmentation and demographics or increasing the focus on behavioral insights, the industry must find a way to tap into its customers’ nuanced lives to offer an enhanced personalized experience. Patients want personalized care and real-time feedback. They want to be treated as active participants in their care and treatment and they are demanding convenient, cost-effective solutions.”

4)    Give Little Unexpected Extras (G.L.U.E.)

what's your purple goldfish“Shifting your focus away from awareness and acquisition towards the customer experience and retention is a mindset change that pays dividends. My book, What’s Your Purple Goldfish is based on the Purple Goldfish Project, a crowd sourcing effort that collected over 1,001 examples of signature added value. if you are not willing to differentiate yourself by creating valuable experiences or little touches that do ‘above and beyond’ for your customer, you will languish in the sea of sameness. Creating small unexpected extras can go a long way to increasing retention, promoting loyalty and generating positive word of mouth.”

5)    Handling Mistakes

“Mistakes are part of doing business. How you handle the fumble determines whether or not you will recover the ball (or business). Showing a little empathy and a willingness to go the distance can make all the difference.  Johnson and Johnson’s handling of the Tylenol tampering crisis is an example of how to get it right. The company immediately alerted consumers across the nation, via the media, not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined. Johnson & Johnson, along with stopping the production and advertising of Tylenol, recalled all Tylenol capsules from the market. The recall included over 30 million bottles of Tylenol, with a retail value of more than 100 million dollars. They offered to exchange all Tylenol capsules that had already been purchased. It was estimated that millions of bottles of Tylenol capsules were in consumers homes at the time. Although this proposition cost Johnson & Johnson millions more dollars, and there may not have been a single drop of cyanide in any of the capsules they replaced, the company made this choice on their own initiative in order to preserve their reputation. Their ethical approach and their commitment in putting humans above profits made a heroic event out of a catastrophic event.”

Empowered patients are wanting – and taking – more control. The focus on customers’ experiences will require seamless collaboration between healthcare providers, pharmacists, insurers and pharmaceutical companies and a choice of treatment options. Customers are reacting with increasingly high expectations of the industry shaped by experiences in other sectors.The pharmaceutical industry’s challenge is to create similarly meaningful experiences across the patient journey. The advent of social media and real-time interactive feedback via the Internet allows every customer to build and expect a relationship with your business, rather than just touchpoints. Engagement and an emotional connection will make a customer relationship the driving force for loyalty and differentiation. Is it time to get emotional?

Today’s Lagniappe (a little something extra thrown in for good measure) – Empathy in healthcare is key. Seeing things through your patients eyes and being aware of their thoughts and feelings. This is a MUST SEE video by the Cleveland Clinic. “If you could stand in someone else’s shoes . . . hear what they hear. See what they see. Feel what they feel. Would you treat them differently?”