Monday, April 14, 2008

Evidence-Based Marketing

Last Post Review

In my last post I described what Evidence-Based Medicine (EBM) is, but didn’t mention much of its impact to the business. Coming back to my summary of EBM:

Evidence Based-Medicine is a systematic approach that attempts to answer a medical question by considering the best available clinical evidence and applying strong medical expertise to maximize the value for the patient.

One can easily start inferring implications to the business, and I believe nothing is more correct than it. There are several ways in which EBM impact the Health Care market but I will focus on what I consider the most strategic aspect: Evidence-Based Marketing.

Have you heard of it? No? Great! You’re in the right place, then.

Evidence-Based Marketing

I assume you know what Marketing is and how it works in Health Care. Just in case you need more background, read my post “Creating a Multi-Stakeholder Approach” to understand the new Health Care market arena. You may also be interested in my post “The (New) Health Care Market Professional”. Enjoy it.

If you have enough expertise in Health Care Marketing, or not enough time to go over two others posts, let’s focus on Evidence-Based Marketing.

I have already mentioned that the Health Care market is used to target physicians and patients with their products. Therefore, the product/brand message is prepared in such a way to speak either the physician or patient’s language. Nothing wrong with this, but the issue remains in the fact that we have more stakeholders (a.k.a. Targets) to our Health Care Marketing Strategy. And I find it difficult to argue that Health Plans are one of the most relevant (if not THE most relevant) of all stakeholders, simply because they pay the bill.

If you believe money is power, than you should immediately start considering Health Plans as your clients. Yes, clients! Not payers, partners or anything else. After all, clients pay for our products.

Actually, you should not invest much time thinking if Health Plans are clients or not; it is the same as thinking if the Sun will rise tomorrow. Some people won’t like it, but regardless of what they think, Health Plans are already considering themselves as clients and want to participate more than simply paying the bill. If you don’t accept it, maybe you should visit and look for good opportunities in other industries.

Health Plans are not primarily interested in clinical benefits, quality of life, coupons, relationship or many of other aspects that we use to target physicians and payers. Our new clients react differently: they want to 1) save money; 2) make sure the money they invest generate results. And, to demonstrate results you need evidence.

When you base your Marketing Strategy on evidence, you bring measurable results to the market. Health Plans will then have a perfect tool to compare your product/brand with others and take a decision based on the best ROI ratio.

But, if you don’t bring any evidence to the table and compete against other brands chances are Health Plans will probably be skeptical about paying for your products. Imagine it:

a) Company X has a product that costs $300 a dose and has demonstrated clinical results in 90% of the cases with strong and real-world data. The results are expected to decrease other costs.

b) Company Y has a similar product that costs $250 a dose. Physicians recommend it and patient associations support it.

Well, it takes one second to see that Company Y product is cheaper than Company X’s. After a second look, what makes us sure that Company Y really works? That turns the situation in:

a) Pay $300 and be 90% sure certain costs will decrease.

b) Pay $250 and expect to have good results based on the market’s opinion.

Correct me if I’m wrong, but these are very unbiased statements. Now put your Health Plan’s hat on and answer: honestly, which one would you choose?

Evidence-Based Marketing is Marketing Strategy clearly based on strong evidence. To base your Marketing on Evidence is very different from using evidence to support your strategy.

Small Word, Big Difference

I hear people proudly saying they “support their strategies with evidence”. Then I ask how they do it and get the same answer 90% of the time:

1) Focus on physicians and patients
2) After the message is in the market, use evidence to support the message

This is the main difference: Evidence-Based Marketing uses evidence to create the message. This is very different from creating the strategy and then seek ways to fit evidence in.

Evidence comes before Marketing. Remember it and you’ll get a huge portion what I’m trying to say in this blog.

If you cannot generate evidence (again, strong and measurable evidence) you cannot and shouldn’t market your product. On the other hand, once you have the evidence, then you may start planning your strategy.

Implementing Evidence-Based Marketing

Let’s say you have a vaccine that has a 80% effectiveness ratio in the first dose (that’s why we get several doses of the same vaccine, BTW). With this information in hand you realize:

1) Your vaccine may be useful for difficult-to-reach individuals.
2) These difficult-to-reach may simply mean the largest (untapped) portion of the market.
3) There are several competitors, but none is using the effectiveness ratio, or even targeting the untapped segment.

This is the same situation I found in 2005 when I was having my MBA internship with a major global pharmaceutical company. In three months, I was able to create a whole new Marketing Strategy that after implemented generated an ROI of above 2,000%. Several months later, after I had concluded my MBA, my manager at that time wrote me an e-mail saying that they had won a Global Marketing Excellence Award based on my recommended strategy.

This is the best real-world example I could think of to demonstrate the benefits of starting the development of your Marketing strategy with the available evidence. Had I started the Marketing strategy looking at something else, results would be completely different.

Final Words

Evidence-Based Marketing is a new concept within the Marketing framework. We have heard of Green Marketing, Guerrilla Marketing, Defensive Marketing and now Evidence-Based Marketing. Everything relates to a basic understanding: how to differentiate yourself in the eyes of the client.

I am a Marketing professional currently working in Health Economics. Marketing professionals should always be cross-functional, and this means having the opportunity to work in other areas such as Health Economics, R&D, Sales and others. Had I not have had the exposure to Health Economics, I would have been developing Marketing Strategies only for physicians and patients.

There is still much to be explored and discovered about Evidence-Based Marketing until it becomes so natural that we call it part of the overall Health Care Marketing Strategy. Until then, keep your eyes and ears open to the market, attend events (such as ISPOR and HTAi) to understand the latest clinical trends and challenge yourself to create a comprehensive strategy to the market.

See you next time!

Ernesto M. Nogueira