Exit CRM, Enter Tailored CommunicationsIt's no revelation that how we interact with people depends on what we know about them. Direct marketing practices are increasingly focused on turning vast data aggregates into useful knowledge about individual consumers.
However, innovative method and technologies, proven in the demanding context of pharmaceutical marketing, hold the promise of maximizing investments in customer data beyond conventional expectations.
Tailored communication, an evolved form of customer relationship management that moves beyond basic personalization, makes effective use of these new methods and technologies. Initially embraced by health communications professionals for sophisticated disease management programs, tailored communication integrates databases and media channels to replicate the neural functions associated with communication.
As a result, tailored communication allows for responsive, computer-mediated conversations with patients who need timely and appropriate information about their condition and treatment. When applied to treatment adherence programs in pharmaceutical marketing, it was discovered that effective tailored communication could result in dramatic resell, cross-sell and upsell opportunities, thereby improving brand loyalty and increasing customer retention and extension.
While drug compliance may seem far removed from the concerns of other industries, it's actually a valuable proving ground for advanced CRM practices. Treatment adherence messages are often very complex, and the stakes are high for convincing individuals to change very personal behaviors. The highly personal nature of this information demands that issues of trust, security and privacy - increasingly important in all marketing services - are rigorously addressed. In effect, tailored communication in pharmaceutical marketing has been a pioneer for the next generation of direct marketing.
Lessons from pharmaceutical marketing. Tailored communication has been extremely successful in helping pharmaceutical companies counter the serious financial and health implications caused by noncompliant patients. Studies show that up to 40 percent of patients do not comply with their prescribed treatment. This leads to unfilled prescriptions totaling upwards of $25 billion in 1996, but the indirect costs - reduced quality of life and increased patient morbidity - can be even greater.
Pharmaceutical companies have begun countering these issues by implementing tailored treatment adherence programs. Interaction begins when the patient voluntarily provides initial data through response cards accompanying the prescription, in person, in telephone interviews, or electronically via e-mail or a brand's Web site. This enrollment information is used to form an initial, often comprehensive, picture of the patient. Individual profile points are then used to select appropriate content for the patient - focusing, for instance, on individually relevant compliance tips or promotion of healthier lifestyle habits.
An ongoing dialogue between the patient and company ensues. Subsequent program materials - delivered through direct mail, e-mail or the Web - can include not only education and motivational materials, but also refill reminders specifically designed to address an individual's unique lifestyle issues, coping skills, motivations and barriers to compliance. Tailored letters, postcards or
e-mails timed to the individual's plan of care, physician appointments and follow-ups may also be included. Some programs may even generate notes to prescribing physicians, advising them when their patients need prescriptions renewed or reviewed. Each time the company provides information, the patient has an opportunity to update and augment their data profile, further enriching the conversation that has been built around the product.
Most significantly, this conversation is enabled by technology. While from the patient's point of view the conversation appears personal, even intimate, the pharmaceutical company enjoys the scalability of mass communication channels.
Tailored communication content can be any object - such as text, illustrations, layout elements, multimedia, audio or video - necessary to create the final tailored message. Specialized interactive software connects profile points to content objects, allowing tailored messages to be generated in real time. This process provides a much greater level of sophistication than traditional segmentation or database publishing.
Committed quitters: tailored communications in action. One commercially successful example of tailored communications is SmithKline Beecham Consumer HealthCare's award-winning Committed Quitters program, a personalized smoking cessation education and support program offered free to purchasers of nonprescription Nicorette nicotine gum or NicoDerm CQ patches.
The CQ program was designed to supplement the nicotine replacement products with a complete behavior change curriculum that helps break the psychological addiction. Participants enroll by calling a toll-free number and answering questions about their motives for quitting, barriers to quitting, lifestyle, smoking habits and other health behaviors. Components of this profile become the data that drive the personalized behavior change program.
Research has shown that Committed Quitters participants are 50 percent more likely to quit smoking than nonparticipants. In a 1994 study of Nicorette, researchers found that Nicorette users who also received the CQ program reported a 35.6 percent, 28-day continuous quit rate after six weeks, compared with 23.7 percent for those who received no additional assistance. The study reported observing similar results at 12 weeks.
CQ also facilitates cross-selling opportunities for SmithKline Beecham. For instance, early in the program, at a point when ex-smokers would be most aware of nicotine stains on their teeth, CQ could include a coupon for a leading whitening toothpaste. After a couple of smoke-free weeks, retained smoke odors in carpets, furniture and drapes becomes uncomfortably noticeable, providing a significant opportunity for house cleaning and rug shampooing services. The act of quitting smoking puts consumers in the buying cycle for many products and services not generally associated with smoking.
A new opportunity for brand development. There are other pharmaceutical marketing examples that underline the effectiveness of tailored communication programs. A leading asthma drug, for instance, promoted refills with a traditional coupon redemption program using direct mail. Working with a database of 500,000 individuals, the direct mail campaign yielded a mere 0.7 percent return rate. An innovative brand manager then tried a tailored communication program. Using the same database of 500,000, the new program produced a return rate of 28 percent - far exceeding the brand's expectations.
Tailored communication enhances the likelihood of behavior change, something all marketers strive for, regardless of their product or market. It gives companies the opportunity to learn the motivations and objections of individual customers and helps them develop convincing, truly intimate relationships with each one. Such scalable intimacy represents the true potential of CRM for brand managers and other marketing professionals.
The track record of tailored communication in the pharmaceutical industry suggests that the key to unlocking that promise may be at hand.
David W. Bulger is founder and chief technology officer of MicroMass Communications Inc., Cary, NC.