Oracle R17 and Pharma’s Future
Oracle announced Release 17 of CRM On-Demand today along with an updated vertical market version for the pharmaceutical industry. Seventeen is a lot of releases even for a SaaS company and Oracle should be proud of the milestone. The same is true of the emphasis on the pharmaceutical industry vertical.
Oracle comes to the pharma CRM market with an assist from Siebel the one time independent leader in CRM that Oracle bought a few years back. Before the acquisition Siebel and its pharma package had managed to corner about nineteen of the top twenty pharmaceutical companies.
For a time in the last decade you could go from job to job as a pharma rep taking your Siebel skills with you and feel right at home. The writing on the wall now though is that pharmaceutical sales is transitioning to a SaaS model and Oracle is managing the transition for its customers.
Oracle’s done a good job of keeping up with changes in the industry and you have to admit that pharma sales is a different kettle of fish than almost anything else in CRM. The pharma business model is what’s unique. Sales reps never actually sell their wares to actual customers. They sell to the major recommender, the doctor, and even the MD doesn’t buy anything. He or she simply writes a prescription. So you have this odd situation where the sales person is there simply to influence the recommender.
You might know that pharmaceutical sales once went by the name of drug detailing because that’s what you did — you were a walking, talking ad for some molecule and the whole show might last only five minutes. In some corners it was considered an entry level sales job because you got to make calls and your company tracked prescriptions and sales within your territory, but it wasn’t exactly the same as carrying a quota.
The pharmaceutical industry is huge, generating hundreds of billions of dollars in revenues each year. A mid-sized pharmaceutical company can easily have a thousand reps and the largest can have tens of thousands. There are about 100,000 pharmaceutical reps in the US Calling on — get this — 120,000 prescribers. Currently drug companies spend $5 billion annually fielding these people. Those costs include salaries, bonuses — all the usual stuff — and some form of payment for transportation. Whether the transportation is a car plus fuel and insurance or mileage is academic. It’s a lot.
But what happens if or when fuel costs rise? Regular gas costs about $2.80 these days — not far from the $4 per gallon we saw a little over a year ago. Even a pharmaceutical company with its vast resources might notice its costs escalating at those prices or more.
Drug detailing is one of the oldest forms of selling — at least in the modern era. How much of it is based on tradition and how much is need? Does a modern drug company need to field an army of people for what amounts to five or ten minute calls?
These are questions worth asking. If I am right, companies all over the map — not just pharmaceutical companies — will need to find answers as fuel prices test their former highs.
In such a reality, many business processes will need to be rethought with a goal of reducing costs associated with transportation and to me that means taking the call to the web and with it, losing a significant number of jobs. Sorry.
A future pharmaceutical CRM product might be expected to offer a portal for each doctor the company targets. Within the portal a drug maker would be able to provide all of the information usually associated with a detailing call and more, such as custom designed video and audio that the doctor or pharmacist could access when convenient, rather than in the middle of a busy day.
The benefits to the vendor would be sizeable. Pharmaceutical companies capture and analyze a lot of field data and that won’t change. But because an encounter is in a portal the quality of data captured might be better.
One of the big reasons for sending actual reps into the field is for them to deliver samples that the doctor can give along with a full prescription to patients. Samples could still be distributed overnight after a call in this new model but with lower costs. Anything else needed to follow up on the call could be provided through the portal.
The portal idea has merit. Many younger doctors use automation applications for tracking their patients and virtually all use some form of billing automation. My doctor carries a laptop into the exam room. Between visits prescription refills and similar requests happen online. If even doctors are using the Web — and they’re late adopters where office automation is concerned — the drug companies should see this as a sign that they need to catch up. The cost savings would be significant and future changes in the economy may force their hands.
As a practical matter the changeover would take a few years as older doctors might resist the change and that would mandate a two tier pharmaceutical sales force. This will provide the time needed to do parallel testing of the two solutions and a rigorous cost/benefit analysis. In the end, though, this is one efficiency move that can’t be ignored forever and CRM vendors would be smart to take notice.
Asuret and MindJet
I’ve recently been looking at a couple of applications that don’t readily fit into the idea of conventional CRM but which are, nonetheless, valuable front office tools that can make CRM a better purchase. They strike me as important additions to the front office suite for sustainability reasons, too.
In common, each has a simple job and each accomplishes its mission by making data visible and understandable. For me, data visualization is something from the 1990’s that had a burst of popularity then settled into the background, absorbed into larger products. The best examples in my mind were the entity relationship diagramming tools and relational data modelers that I used to diagram my first relational databases.
I don’t think those tools have been much improved over time. Each took what was a knot of information and made it intuitively obvious for the user. They were definitely worth the money. I will never forget the thrill I experienced the first time someone showed me how they worked by dragging some data items onto the workspace and letting the system sort it all out. Very cool.
Today’s visualization tools do something similar though I might say the concepts they work with are more elaborate. The first tool I am thinking about, Asuret, helps organizations involved in large system deployments to understand the needs and motivations of all relevant constituents. It’s one thing to say that an organization is on board with a new system deployment but what does that mean really and what are the differing viewpoints of IT, the line of business and the consultants? Everybody on the same page?
I like Asuret because it doesn’t assume we’re all on the same page or even that we all know what that page is. It is open-ended and its purpose is to find out. In a large project it’s not unusual for everyone to have a different view of the drivers and desired result and often that result is an outcome that gets a narrowly defined job done and covers certain anatomy. Asuret shows you to what degree everyone has the same vision of the solution. It’s surprising when you find out how differently the stakeholders see the situation.
Asuret gathers input from all the stakeholders and renders it graphically so that managers can find weaknesses in their plan and potential disagreements before they materialize, then it paints a picture everyone can understand. Last time I checked, Asuret was in beta and doing well. It would have been nice if Asuret had been around, say, ten years ago, but what the heck. There are still plenty of complex projects to worry over and I think Asuret will find its niche.
The second tool on my list has been around a while it has been successful and garnered many customers. It has also been kept current a neat trick because its owners don’t believe in the “don’t fix it if it’s not broke” approach. The product is MindJet and it is used to visualize processes as different as selling, consulting, engineering or writing a book. A newer iteration focuses on the sales process enabling sales people to map out a situation quickly and efficiently.
In selling it’s a tool for improving collaboration with customers, optimizing the discovery process and developing account plans. These are all things that usually take time and a lot of paper and pencil work. Often they are processes that we do in our heads or on napkins with predictable results.
I am writing a book right now and am playing with MindJet as an outlining tool. It’s a difficult process to capture ideas and put them together in the right order. There’s a lot of experimentation, for example, and visualizing the information makes the process easier.
As you know, I have become a big fan of sustainability — of removing the friction involved in many business processes in the front office. My definition of sustainability includes reduced waste and better use of available resources and inevitably that means capturing and analyzing more data so that we can work with a richer information set. Analytic software alone is not the only approach we need. We can still get lost in a jungle of data if it is simply provided as reports or even as pie charts.
Analytics is also retrospective by nature and while that’s useful it primarily tells us what to do next time. The tools I am discussing today go you one better. They can help you see how things are, while there’s still time to avoid a problem and that’s incredibly valuable anytime there’s a human factor involved. Human mediated processes often do not happen the same way twice so, often, the learnings from the last instance are instructive but hardly definitive. These tools, that work in the moment, can be very valuable for this reason.
Tribes and zero-sum markets
I recently read “Tribes” by Seth Godin and I think it might hold some clues to the future of CRM. Godin is a business blogger and author of more than a dozen books with titles like “Permission Marketing” and “Purple Cow”. He’s not about the status quo, he’s all over change and leadership like a junkyard dog.
One of Godin’s points — something that I have tried to articulate with less success — is that our business and personal relationships are tribal and, parenthetically, social media is an ideal tool for communication within the tribe. Godin’s point is that tribes are a natural form of association and leveraging them is a strong human drive. Tribes are everywhere or they are waiting to form, waiting for someone to exert leadership.
If you have a Facebook, Twitter, LinkedIn or other social media account and people subscribe to your posts, you are a tribe leader. You are also likely to be a tribe member for the same reason. In business customers more or less fit the description of tribe members though something of tangible value is often involved in the relationship too.
In an expanding market a tribe might be nothing more than a customer base especially at the beginning. Vendors have most of the relationship power in expanding markets because customers are often busy figuring out what a product really does. Nonetheless, a very loose alliance of customers inevitably begins to come together around shared interests. It starts simply enough — someone hosts a meeting, writes up some reasons the group wants to exist and members trade contact information so that they can communicate, and there it is. Godin says that’s about all a tribe needs — a shared interest and a means of communication and isn’t that what social media provides?
If you’re a savvy vendor you might look for ways to engage the group so that you can benefit from its ideas and maybe even share some ideas of your own. If you’ve been using a product like RightNow or Salesforce you are a member of those tribes. You may go to annual or regional meetings and trade ideas on line with other members. You may also offer suggestions for improving these services through the tribe. A smart vendor will also want to hear what the tribe is discussing and ask a few questions for clarity, too.
Tribes are not limited to a kind of product or service such as technology. Starbucks has a thriving tribe consolidated around, not coffee, per se, but the Starbucks experience. Visit the MyStarbucksIdea hosted by Salesforce.com and you will see what I mean.
As you may know, I think that the era of expanding markets and exponential growth is at least taking a pause and it may even be over for a while. What replaces expanding markets is often zero-sum markets — a situation where your best customers are your best customers. In other words, the people who bought from you are the people you expect to sell to again (and again).
Zero-sum markets are positively tribal — iPhone or BlackBerry, Bud or Coors, Starbucks or Dunkin’ Donuts, Coke or Pepsi, paper or plastic, and on and on. CRM can play a natural role in tribal markets. If your tribe is your customer base — and all those who would be customers (and it is) — then CRM ought to be the tool you use to share your thought leadership.
But here’s the thing. It’s more than bi-directional, vendor to customer communication. It’s omni-directional including customer to customer, vendor to customer and customer to vendor. It’s also much more than a vendor using social media to promote a product or service.
My only critique of “Tribes” is that there isn’t much explicit discussion of the importance of capturing customer input though it’s certainly there if you read between the lines.
Social media came along at a perfect time for all of this tribalism and we adopted it in our personal lives with stunning results. Business adoption is something different though and I think business has been somewhat hobbled by a too literal interpretation and translation from personal to business.
We hardly think about our personal thought leadership because it is so much a part of us but in business thought leadership is not a single person’s view. It’s something that gets synthesized from many external and internal inputs, that’s why inbound social media is so important.
Your friends might follow you simply because you are you or maybe you are a natural leader but customers need a reason and that’s why I focus on social media that capture customer voice. Godin’s idea of tribes comes along at a good time. Vendors need a way to address customers that’s more effective than the marketing we did in the expanding markets era and thinking of the customer base as a tribe has a lot going for it.
New Beagle White Paper
This paper takes a different look at the application of Web 2.0 techniques to SFA and shows how you can capture important intellectual property about your sales business process. Using Salesforce.com’s Sales Cloud as an example, the paper reviews how any sales organization can benefit. Download here FREE!
Google’s chance for meaning
ZDNet is reporting that the Chinese government is starting to get tough with Google over its stand against censorship. According to the AP a Chinese official said “If you want to do something that disobeys Chinese law and regulations, you are unfriendly, you are irresponsible and you will have to pay the consequences.”
Time to put out the fire and call in the dogs I say.
There’s a lot of handwringing in the press and in financial circles about what happens if Google walks away from all the potential that is the Chinese market. I think the issue is actually bigger than losing out on China because Google is now in a position where it can’t have the China market and have a company that does no evil. If Google elects to stay in China it forfeits its innocence and takes a big hit to its brand. It can’t stay. Its currency is trust and if it loses the trust of the market it will become just another capitalist tool and it will have earned the distrust of the world.
Google needs to exit the Chinese market and it needs to do so in a very public way to signal to others that it’s ok to take a walk from China and to show its loyal customers that it has their best interests at heart. If the company had no intent of backing up its stand against censorship, it should not have taken that first step.
