Wednesday, July 11, 2012

Marketing Drivers Are Changing, How About Your Metrics?




Good planning focuses resources on the key elements that drive product choice. If sales are dependent on patient requests, then we like to say Brand X is a patient-driven brand.

We can measure patient requests for a brand.

Then we drill down a little deeper and consider: What is getting in the way of patient requests? Is it:
  • awareness of the condition?
  • awareness of a potential solution? 

We can measure awareness issues.

But because we don’t know how to measure the effect of the family and friends phenomenon, often called word of mouth marketing (WOMM), we tend to ignore it. WOMM is, however, quickly becoming an important source of information for patients who will ask their doctor for a drug by name.

Patients are increasingly:
  • looking for,
  • relying on, and
  • trusting

commentary about medicines that they get from their friends and family. So how a patient feels about—and what they say about—your brand and company can be a real sales driver.

Consider these three facts:

But don’t worry, we can measure that too.

The Net Promoter Score (NPS) measures the sentiment people have about a brand in one, single number that correlates to sales and profit growth. Marketing masters General Electric and American Express use NPS to help measure the quality of their relationships with their customers. NPS relies on one question:

“Would you recommend this brand to a friend/family?”

For a more complete overview, the 2008 Harvard Business Review article, How the Net Promoter Score (NPS) Can Drive Growth by Fred Reichheld does a great job.

The economic benefit of a high NPS score is derived from what Reichheld calls the Loyalty Effect. Basically, patient brand-promoters are more likely to:
  • use more of the product for a longer period of time
  • cost less per person to serve
  • say positive things about your brand

An NPS might have been helpful to Sanofi-Aventis in determining the effect on sales of the highly publicized Taxotere issue, where a woman flooded the media about the product’s side effects. If Sanofi-Aventis had understood the impact of the woman’s complaints, their marketing department may have considered investing in monitoring and responding to patient comments online.

Conversely, if we understood how one positive interaction with a nurse educator impacted NPS, we might invest more in nurse educators and less in direct-to-consumer advertising. It’s about matching investments to business drivers.

If NPS has captured your imagination, consider putting one of the courses offered by Satmetrix  on your 2013 agenda. You should know that using NPS correctly is a significant undertaking. Instead, you may want to start smaller by adding the NPS question to an ongoing tracker, or conducting a quick online study.

With customer commentary and relationships controlling business more than ever before, doesn’t it make sense to start measuring the impact that customer word-of-mouth communication has on your business? Maybe even plan for a few customer-care initiatives in 2013 (see our next Thought Starters post)?

Thanks for letting us share.
Dorothy


Next Wednesday’s post introduces Compassion MarketingTM—how a deeper understanding of your target can lead to significant benefits.

To read previous 2013 Planning Thought Starters posts about:



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