Building a business case for customer loyalty in the pharmaceutical industry
I'm an executive in the strategic marketing group at the headquarters of the pharmaceutical company Galderma International. We are preparing to enter a new field in dermatology, where products are not highly differentiated due to their high similarity and where price wars seem to play a role, at least in the way it is set by companies that currently operate in this segment.

We are looking for ways to address this market in a different way, and loyalty marketing (i.e., customer loyalty programs) looks like something to evaluate ii it could help us differentiate and help us avoid entering a "lost in advance" price war game. Is a customer loyalty program applicable to the pharmaceutical industry? Will it be a differentiating solution by itself? How can I go about getting doctors interested in a loyalty program?

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Customer loyalty programs can, and should, be defined as anything and everything that leverages desired customer behavior. This is especially true in the pharmaceutical industry, where prescription writing or non-prescription recommendations are driven by physician trust, engagement, advocacy and the strong influence of neutral, informal communication between rep/company and doctor and between peer doctors. In other words, this could be events, special training, targeted materials, etc. that are both functional (efficacy) and emotional, or relationship, in nature. Rep behavior and interaction, i.e., sales force focus and optimization, is particularly critical here.

In a seemingly commoditized pharma market space, the survivors and winners are those who can articulate, and effectively communicate, the strategically differentiated value proposition and get "customers" to carry most of the bricks re: brand support. Another way of saying this is -- find (through targeted physician, pharmacist and patient advocacy research) those elements of efficacy, communication and value that positively break your company out of the commoditized pack.

This was first published in June 2006