dcsimg The commercial potential of customer experience - Ramboll Group
     
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The commercial potential of customer experience

Traditionally, customer focus hasn’t been a big deal in the pharmaceutical industry. But this year, a movement from products to patients has seen the industry make the biggest improvement of all in creating valuable customer experience. The trend towards strategic customer focus is becoming a megatrend with commercial potential for all industries, CEMindex 2014 reveals. 
 

Couple embracing each other in the theatre

Imagine this: You’ve just discovered that you suffer from an illness. But you don’t know much about it. What do you do? Your first impulse is to go online. In fact, eight out of ten patients google their way to information during a disease period. But there’s no guarantee that you’ll find the right answer.

People with psoriasis, the skin disease, now have a different option. Rather than gambling with their health, they can log on to a free digital platform. They tap in specific details about their condition and immediately receive tailored information that fits their profile and points them in direction of proper treatment.

The platform is a part of QualityCare, a program developed by medical company LEO Pharma as an important element of its customer strategy. The example illustrates a new movement in the pharmaceutical industry: From products to patients.

- Today, if you ask people what they want, it’s more than just pharmaceutical technologies. Patient needs go beyond medicinal products. They want complete solutions that take the whole course of a condition into account, says Peter Aksel Villadsen, Senior Director in LEO Pharma.

Customer-driven innovation

The shift in focus is reflected in CEMindex 2014, an annual survey of Customer Experience Management (CEM) in more than 600 Danish companies. Compared to other industries in this year’s index, Pharma has experienced the biggest improvement in customer focus – from 63 in 2013 to 68 in 2014 (index 100).

Figure 1 (click to enlarge) – Industry development


Figure 1 – Industry development

- The positive movement can be partly explained by the fact that roughly 50% of medical companies anchor customer focus in top management, giving CEM a strategic foothold and a clear mandate. On top of that, more and more businesses in the sector design customer-oriented processes for all customer touch points, defining the ideal experience in each of them, explains Stig Jørgensen, Director of Customer and Market Development in Ramboll Management Consulting and originator of CEMindex.

The most significant reason, however, is the industry focus on customer-driven innovation which is widely regarded as one of the most acknowledged, yet demanding areas of CEM. A +9 index point progress since 2013 reflects the fact that close to 6 out of 10 pharma companies now take customer needs into consideration when developing new patient solutions and medication. LEO Pharma’s QualityCare illustrates the trend:

- This is a bonus for the patients, because we use the collected data to develop new technologies, solutions and products that are better suited for the patients’ needs. It’s a step towards more customer-driven innovation, Peter Aksel Villadsen explains.

Meanwhile, Stig Jørgensen believes that the conversion of data and insight into valuable customer experience can become a stumbling block:

- Many find that it’s difficult to transform knowledge into customer experience. Customer-driven innovation has joined the agenda as a tool to match the customers’ state of mind. Customers know what they need and want, but they don’t always know about the current solutions and less likely what the future will bring.

The commercial potential is indisputable

For the fifth consecutive year, CEMindex highlights the commercial potential of working systematically with CEM to move closer to the customer.  In cooperation with Copenhagen Business School, the research project documents that a 10% increase in CEM contributes to a 10% increase in differentiation and a 5% increase in financial results. Put differently, customer focus is bottom line business.

Figure 2 (click to enlarge) – The analysis model showing the commercial potential of the eight CEM dimensions

Figure 2 – The analysis model showing the commercial potential of the eight CEM dimensions

The numbers from the 2014 result show a total index rise from 67 to 69, confirming that customers continue to climb the strategic ladder. 61% of the CEOs rank customer focus as the main strategic objective to overcome current challenges, making it the number one priority with ongoing efficiency improvements and innovation/development of new business models claiming second and third spot.

Figure 3 (click to enlarge) – Customer focus tops the priority list

Figure 3: The CEMindex highlights eight dimensions of Customer Experience Management that influence differentiation, market performance and financial results.

Only 29% of the companies mention cost reduction as a priority. A decent indication of the current reality, Stig Jørgensen claims:

- It’s a signal that tallies with the reality we experience when we talk to the businesses. Most companies have realised the profit potential of cost reduction. Today, CEOs focus more on how to strengthen customer and market-related activities in an attempt to boost bottom line.

Customer focus no longer a goal in itself

Looking at the most recent results, they indicate a rather prominent change. Compared to 2013, customer focus and customer satisfaction surveys are no longer regarded as independent business objectives. They have become integrated as subsidiary goals on the way to more specific commercial benefits.

In CEMindex 2014, the respondents rank customer retention, customer attraction and increased upselling/cross-selling as the main benefits of CEM.

- The benefits of increased focus on customers all represent driving forces in the attempt to increase organic growth. And when you approach organic growth in the right way, it can contribute significantly to bottom line growth, says Stig Jørgensen.

At LEO Pharma, the ambition with QualityCare is to gain a critical mass of users – maybe even amounting to hundreds of thousands – as the program continues to develop. Peter Aksel Villadsen hesitates to set more specific targets. Because in terms of customer focus, pharmaceutical firms still find themselves at a relatively modest level of maturity.

- The industry is still adapting to its new role it’s about to take, he states.

According to the senior executive, it can take years before the industry is truly equipped to a more intense focus on patients. But the potential is there for everyone to see.

- Imagine that you as a patient with a disease or an illness no longer have to jump from specialist to specialist, and instead, you become a part of a concept where every solution comes to you. This is how we improve quality of life for people in treatment. This is the mindset we need to apply, argues Peter Aksel Villadsen.

 

Learn more

 
Learn more about CEM
Customer Experience Management

If you want to learn more about CEMindex, the eight dimensions, and how to work strategically with customer experience, please visit our section about Customer Experience Management.




Contact

Thomas Lehman Jensen
Thomas Lehman Jensen
Business Manager
M+45 5161 8193
Etvj@ramboll.com