A Three-Part Recipe to Save Your Job, Your Brand, Your Business
“Unprecedented.” “Hellacious” “Apocalyptic.” Thesaurus.com asked its fans to describe 2020 in one word. These are 3 of the winners. Many in business would agree, especially with another wave of COVID-19 currently gaining momentum as of this writing.
But there are precedents that can help you figure out how your business can survive the pandemic and avoid apocalyptic outcomes. Marketing in a recession is very similar to something that pharmaceutical marketers deal with in every type of economic environment.
Blockbuster drugs, like Viagra, face revenue declines when they come off of patent protection that are similar to what many businesses are seeing in 2020. In the pharma industry, the situation is even called “the patent cliff.”
By studying what brands like Viagra do to survive—and even thrive—post-patent, you can find a specific recipe that will get you through what truly has been a “hellacious” year.
Step 1: Proactively Make a Reverse ROI Argument
Whether you are a brand marketer reporting to an executive team, a CEO reporting to a board, or an entrepreneur trying to make payroll, be proactive about voicing your financial expectations. Otherwise, it’s too easy for “the powers that be” to make a change amidst the abundant red ink that may be on your 2020 financial results.
It’s time for you to make a reverse-ROI argument. What have you done — and what will you do — to make results less severe than they would be if you did nothing?
Pharmaceutical brands can lose up to 90% of their sales post-patent. You can bet that pharma brand managers make their executive teams well aware of this fact.
In this type of pharma market, presenting a plan that results in losing “only” 80% of sales can be seen as a positive! This is an example of a reverse-ROI argument.
What You Need to Do Now:
Benchmark your performance against others in your market.Find a public company similar to yours that is doing reasonably well, and one that is not. This may take some time, but it may be the most important thing you need to do right now. Supplement this with a Google search that may yield additional and more specific data.
What are the reported revenue drop-offs for these companies? Where do your company’s results fit in this context? Of course, you’ll want to follow this analysis with your plan for how to limit any further decline. Read on for some ideas.
Step 2: Find the New Stakeholder
You can bet that there have been significant changes in your clients’ businesses this year. Their decision criteria will have changed, and in many cases, a new stakeholder may be involved in the decision-making process.
In post-patent pharmaceutical brands, the power often shifts from the prescribing doctor to the pharmacist. Where the patent-protected brand used to be the only choice, now there are likely cheaper alternatives.
The commercial team from the post-patent brand has to figure out how to get the pharmacist to continue to recommend their more expensive solution, at least part of the time (see step 3 below for ideas on this). But step 1 is to get to know the needs, wants, and behaviors of a stakeholder that had very little power prior to patent expiry.
Similarly, if you sell technical products or services, someone like a CFO or buying committee is now scrutinizing every expenditure your customers make. Gone are the days when simply proving technical superiority to the client’s in-house expert was sufficient. Now you have to make an economic argument.
Ironically, COVID is actually having the opposite effect in the medical field. Where we saw the economic decision-makers gaining power in the past decade, right now infectious disease experts are emerging in importance. For the present, sterility and disposability are overtaking economic concerns in this industry. Companies not addressing the needs of the infection-control stakeholders are not winning.
What You Need to Do Now:
Do an influence mapping exercise. Which stakeholder has emerged in your industry as a new power source?
How can you get to know them ASAP? Are there untapped experts in your own company or in your partner network that know this stakeholder’s needs —and can educate you quickly? If allowed in your industry, buy these stakeholders lunch, and do a Vietnam Card Sort type of interview. Someone in your set of competitors will do this better than anyone else — it might as well be you.
Step 3: Re-Consider Which Segments You Find Attractive
Your pre-2020 target market hasn’t disappeared – but it has probably shrunk dramatically. Post-patent pharma brands do get super-focused on segments of patients who still want their brand. And it’s of paramount importance that the brand retains as much of this segment’s business as it can.
But winning with this very small segment isn’t enough for pharma, and it likely isn’t enough for you. Your business survival now likely depends on finding and winning with previously unattractive segments that you left to competitors in the past.
When generic pharmaceutical drugs first surfaced, many name brands refused to compete in the price-based post-patent market. They ceded the territory to generic drug specialty companies. Not any more.
Most pharma companies now employ a host of strategies to stem the post-patent drop-off. Some make their own generics. Some meet price-sensitive segments half-way with something called a branded generic.
Some license the marketing and selling of their new products to other companies. Some reduce the amount of support they provide for price-sensitive segments. Most create entirely new brand names for their lower-priced offerings if they fear diluting the value of their original brand.
The point is that these big pharma companies realize that they have to wade into new territory to survive. And this is where marketing strategy becomes crucial.
What You Need to Do Now:
First, define the characteristics of your remaining, original target market, and build some compelling retention strategies. Second, create a fresh needs-based segmentation of your market. You’ll see several segments emerging that you would have ignored in the old days.
Finally, ask yourself the “2020 questions”:
- Do we have the capabilities to profitably serve some of these segments we used to ignore?
- If not, can we quickly acquire new capabilities that can get us into the game?
- Do we have the capabilities to not just serve these new segments, but do so in a differentiated manner?
- Can we innovate our business model to serve former customers who are now in a very price-sensitive mode?
- Can we create new brands so that we don’t dilute the value of our existing brands with lower-priced or sparser value propositions?
Answering these questions will round out your strategy and help limit the downside. This will also give you a whole new arsenal of “weapons” to utilize further when the recovery takes hold.
The 3 steps outlined above represent the hard work that is in front of all of us if we wish to thrive well into the 2020’s and beyond. We might as well get to it. Follow the advice above and you might, in a few years, add another word to Thesaurus.com’s description of 2020: “Opportunity.”