What You Didn’t Know You Didn’t Know about Marketing Medical Marketing Association National Conference June 1, 2006

1. What You Didn’t Know You Didn’t Know about Marketing Medical Marketing Association National Conference June 1, 2006

2. Television and Radio Ads Print Ads Advertising Direct Mail Banners, SEO Website Compliance & Upselling Tools Fulfillment Processes Selling Processes Customer Service Processes Management Consulting The Conversion Funnel Re-Visited Specialist Practice Activity Logs Adoption Consumers Awareness Consideration Device registry data ( if Title 21 requirement) CRM data from rep attending procedure Preference Purchase Loyalty Purchase Collaborative Brand/Process Optimization

3. The Conversion Funnel Re-Visited “Stated” Dimension of Brand ….talk about it Specialist Practice Activity Logs Adoption Consumers Awareness Consideration Device registry data ( if Title 21 requirement) CRM data from rep attending procedure Preference Purchase Loyalty Purchase “Experienced” Dimension of Brand ….be about it.

4. Three Questions we will explore together • How did the experienced dimension of a brand gain in importance vis-à-vis the stated dimension as a means of creating customer equity? • What is the role of the marketing function in improving the experienced dimension of a brand? • Service attributes • Product attributes • What are the challenges and rewards of creating measurable, effective, brand-right processes and workforce skills? • For advertising agencies • Internally for clients

5. The Ebbinghaus Curve Guiding Idea of Mass Marketing: Awareness and preference can be created by continuous reminders through a mix of media.

6. The New Reality : Ebbinghaus no longer works Consumers are like roaches. We spray them with marketing, and for a time it works. Then, inevitably, they develop an immunity, a resistance. Jonathan Bond & Richard Kirshenbaum, Under the Radar—Talking to Today’s Cynical Consumers Traditional marketing and branding strategies haven't helped most big corporations either. If you look at the top 50 of the Fortune 500 in 1989, you'll see that 10 years later, 39 had dropped from the Fortune 50. These are the companies that spend the most money advertising and promoting their brands. Regis McKenna

7. Seeing and Believing: An historical perspective Many of the nobles and senators, although of a great age, mounted more than once to the top of the highest church tower in Venice, in order to see sails and shipping that were so far off that, without my spy-glass, it was two hours before they were seen steering full sail into the harbor; for the effect of my instrument is such that it makes an object 50 miles off appear as large as if it were only five. From a Letter to Landucci, August 29, 1609

8. Seeing and Believing: An historical perspective Unlike spectacles or magnifying lenses, the optic tube offered not just a distortion of what was already there, but more. It revealed evidence that was different from what the naked eye could see, evidence that wasn't otherwise there." How the Telescope Opened Our Eyes and Minds to the Heavens- Richard Panek

9. Seeing and Believing: An historical perspective It is now not simply a case of one body revolving around another body … as the Copernican doctrine teaches From The Starry Messenger, 1610

10. Customer-centric view

11. Where’s My Stuff? Evidence #1 : Amazon makes self-service order tracking available via the web, teaching consumers that: • They have the right to witness the internal processes of the companies with whom they do business • There are companies that make themselves accountable for end-to-end service

12. Customer-to-Customer Communications Evidence #2. Consumers realize that they are not isolated, they can easily share their experience as consumers with one another: • Zero distribution costs, ease of publishing on the web makes everyone a potential critic or advocate • The power of word of mouth is amplified beyond local communities and social networks “I’m not going to apologize for being impolite. Why should I?” A recording of this comment by a Toshiba call center representative was posted on a website by frustrated Japanese customer. The website received over 7 million visits

13. Customer-to-Customer Communications Diffusion of brand experiences has sped up even more in the last 3 years due to the blog explosion....

14. Customer Expectations • Transparency into internal processes • Coordination of cross-divisional offerings • Resonance between advertising promises and operational fulfillment • Recognition and return of value for the attention they have granted the company

15. In this context, what is marketing’s function? Marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. AMA, updated in 2004 • Core operating principle, not a department • Creating and delivering, not just communicating, value • Lifetime relationship

16. Customer service and technical support is… Hospital admins defect to competitor’s machine Sales team successfully sells product to specialists Bad word of mouth within specialist community In-office procedures decrease utilization First-time purchasers favor competitor’s device Specialists sense increased liability Journal advertising creates interest Which is attributed to ineffective or insufficient mktg Product performance is... Decreased sale of new units and disposables Customer Svc R&D, Manufacturing Sales Marketing Litmus Test #1 – Client Perspective ..frustration over lost $ ..not responsive ..within standard quality specs

17. Traditional hierarchies thwart process alignment Most organizations are based on departmental silos that focus on vertical accountability, not cross-functional process ownership

18. Customer value is created laterally Owning the customer experience requires intense and ongoing cross-functional collaboration ..and the ability to measure performance at key points in process flows

19. Client challenges to adopting process orientation Water to a Fish: Many processes aren’t recognized as plastic, human constructs…they are articles of faith, invisible & unquestionable. Defensive mechanisms: Process change requires candid and often uncomfortable conversations about job expertise, areas of overlapping responsibilities, and personal accountability. Managers and performers become skilled at going through the motions of collaboration with a shared pact to stop short when personal defenses are triggered. No lingua franca: Most people in the workplace don’t have a shared language to document, examine, and refine processes. Performance reinforcement: Job performance criteria reinforce siloed initiatives. Pilot project as teaching tool Appreciative Inquiry Teach process language, it’s common sense Build lifeboat evaluation models

20. Lingua Franca There is a language for collaboratively designing process. Like the blueprint for a house, a good process blueprint has layered levels of detail, so it can be understood by lay people and experts alike ArchitecturalRendering Floor plan Section Detail

21. Task Diagrams Universal Modeling Language Lingua Franca Hi-level process model

22. Agency challenges to adopting process orientation Stirring it up: You will be asking your sponsors to take on the challenge of working across the organization, put their social capital at risk. Delayed gratification: If you act in good faith and look for root causes, you may be delaying the fun, known work of making ads while you take on the difficult, open-ended work of analyzing and improving customer touch points. Creating and maintaining the culture: How do you build a company that has art majors and management consultants working side-by-side? Senior client sponsorship, feeling process pain Client lock-in, premium for holistic ROI stewardship TBD– both risk and competitive opportunity

23. Poster Child of Stated Brands : The Sock Puppet Everyone talks about how much money the company spent on advertising, but what about the free publicity? The puppet got on talk shows. It was even in the Macy's Thanksgiving Day Parade, and Al Roker was quoting the commercials. After the company went bankrupt, the puppet was its most valuable asset and became the only ad character in history to be sold to another company. The reason it stands for dotcom excess is that it was so successful. Rob Smiley– co-creative director of TBWA/Chiat/Day, San Francisco.

24. communicating Research & Biz Dev Clinical & Regulatory Marketing delivering & creating Pipeline Marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. creating Specialist Practice Activity Logs Adoption Awareness Consideration Preference Purchase Loyalty Purchase

25. The Pipeline Re-Visited Research & Biz Dev Clinical & Regulatory Marketing ? ? ?

26. Lingua Franca between Marketing and R&D Technical Pathway Feasibility Commercial Attractiveness

27. Closing Thoughts for Clients Expect Learned Helplessness: You will hear “there’s no way we can change things around here, there’s too much politics/turf war/history, etc.” Start small and get a win: Low risk, high impact project with stakeholders that already work well together. Fight to get measurement built in from the start: You can’t improve what you can’t measure Find the language that creates common ground:

28. Closing Thoughts for Agencies Pay-for-performance mindset is here to stay: savvy clients are going to be looking for harder metrics than “awareness” and “brand recall” to judge ROI “Holistic brand stewardship” creates opportunity to: • work across the organization, increase account longevity • increase number of billable services • radically differentiate offering Get started: Throw some process people into the mix with your creatives and account team and see what they come up with. At one point putting the copy writer and artist in the same room was a radical innovation….why not try it?

29. Attention Surfeit Why not fish where the fish are? Attention Scarcity Specialist Practice Activity Logs Adoption Consumers Awareness Consideration Device registry data ( if Title 21 requirement) CRM data from rep attending procedure Preference Purchase Loyalty Purchase

30. Backup

31. Promotional Spending in Pharma

32. Lessons on ROI from the AARP Study • One place to look for comparative ROI is the ARPP (Analysis of ROI for Pharmaceutical Promotion) study of 2002 conducted by Dick Wittink of Yale. • Methodology of ARPP study • Evaluated 392 branded drugs with revenues of $25MM or more for the time period 1995-2000 • Used data from Scott-Levin to track impact of DTC, Detailing, and Events spending on number prescriptions and prescription sales. • Data from PERQ/HCI to track effectiveness of journal advertising • Using regression analysis, calculated the average relative ROI for these promotional tools: • Detailing (DET) • Direct to Consumer (DTC) • Advertising in Professional Journals (JAD) • Conferences and other Events (PME)

33. Hi-Level Results of ARPP Study: 25-100MM • R.O.I. for brands with annual sales between 25MM and 100MM

34. Hi-Level Results of ARPP Study: 100-500MM • R.O.I. for brands with annual sales between 100MM and 500MM

35. Hi-Level Results of ARPP Study: 500MM+ • R.O.I. for brands with annual sales greater than 500mm