Customer Relationship Management (CRM) is something every company wants to master, especially in the Life Sciences industry. And considering that relationships between customers and vendors are changing (sales representatives are competing in increasingly saturated markets and prescribing decision-making is becoming more complex), two main strategies are emerging today:
- Do more with less. Become more focused and productive with the same number of sales reps who will be supported by technology and complemented by new channels.
- Differentiate through customer experience. Put more emphasis on sustainable relationships through better, personalized customer service and interaction.
That means the role of Customer Relations Management (CRM) is now more important than ever. And although many early initiatives of CRM fell short of their expectations (i.e., improving operational marketing and sales, and customer service effectiveness through Sales Force Automation and other, mostly IT-driven tactical initiatives), a majority of industry executives say theyll maintain or increase investment in CRM over the next five years. The next step will be to not only to employ the CRM systems, but also to put them to good use, processing data into information to create actionable knowledge that sales representatives can utilize to enhance their relationship with physicians.
In this report, a joint Cap Gemini Ernst & Young/INSEAD team conducted interviews on CRM, meeting 60 senior executives from 28 top Life Sciences companies worldwide. They explain that the ultimate goal of unlocking new value in customer relationships is the ability to sustain a rich, fast, coordinated dialog with many diverse customers, also known as collaborative CRM, a goal only a few companies have reached. The authors examined the impact of CRM on channels, analytics, IT and organizational architecture.
They study revealed that sale forces will remain the same or decrease in size in the coming years. Simultaneously, cost-efficient e-channels will grow, increasing the speed of customer interaction as well as feed back customer data for segmentation models to complement the work of the sales force.
They also discovered that companies are rediscovering analytics, seeking ways to integrate market and customer profiles into daily marketing and sales practices. Future segmentation models will be based on attitudes, values and needs, and they will describe, or even predict, consumer behavior at the micro-segment level. And the focus of investment in CRM IT by 2007 will be on extracting the benefits from existing applications and building analytical capability.
As a frame of their in-depth findings, they explain that Life Sciences companies need to focus on the following three areas:
- To realize the benefits from current operational CRM initiatives through training, appropriate use, and acceptance of the CRM systems, as well as overall integration.
- To differentiate by using analytical CRM, utilizing new channels to get behavioral data from physicians to better understand their needs and learning how to use analytics to turn data into insights and finally into actionable strategies.
- To move to collaborative CRM (or the coordinated use of CRM) across all product and customer segments for physicians, patients and payers.
The report concludes by stressing that the Life Sciences industry is already in deep with CRM. As competition intensifies, companies are beginning to realize that CRM is no longer an option its critical for growth. And wherever a company stands on the CRM path, it needs to act fast to reach its customers. When it comes to CRM, doing nothing is the biggest mistake left to make.
Access the full text of the report to find out more about the specific challenges and implications concerning the impact of CRM on channels, analytics, IT and organizational architecture.
INSEAD, Cap Gemini Ernst & Young, May 2002