There are some very important questions that health economics consultancies need to ask themselves in a tightening economy. What’s my differentiator? What do my clients care about? What are their priorities? Which of my services could be defined as essential versus nice-to-have?
In previous recessions, health economics consultancies have fared well, for several reasons. The first is that setting the right price for drugs is even more crucial in times of economic downturn, so pharmaceutical companies depended on the advice of health economics experts to an even greater extent. A second reason is that in the last recession there were relatively few consultancies specialising in health economics, but now there are many.
This time, providing truly differentiated services that respond to the needs of pharmaceutical clients is imperative. Unfortunately, however, consultancies are not very good at describing their own value. I attended a conference recently where I wrote down the strapline of every consultancy that exhibited, and what these showed is that most are saying the same thing.
If consultancies are to respond to the needs of their clients while separating themselves from their business rivals, they need to understand what their clients need and value, and how to build relationships with existing and future clients.
Assessing customer satisfaction
One of the services we offer at Gatehouse ICS is to assess customer satisfaction. Few consultancies do this type of follow-up, or if they do, it tends to be in the form of a quick survey and typically little is done about the information gathered.
We help our clients get a pulse of their own clients’ satisfaction by carrying out a 15-minute phone appointment. Questions include, “why did you choose the consultancy?”, “would you use them for the same service again,” and “would you use them for other service offerings?” This last question is an interesting one because the vast majority of the time the pharmaceutical client will respond that they weren’t even aware what other offerings the consultancy had. The surveys are, therefore, an excellent way to highlight the fact that the consultancy offers more services than the pharmaceutical client knew about.
Happily, we find that most customer satisfaction surveys seem to be from satisfied customers, which provides the consultancy with good soundbites for marketing purposes. In addition, they provide intelligence into what matters to the pharma customer. For example, they may say “we are unlikely to use them for X or Y service, but we would use them for Z service.” This type of intelligence is invaluable, since it provides the opportunities, goals and threats from the client perspective, including whether budget cuts or layoffs are coming, or whether a merger may impact the types of services required.
We also conduct a service analysis to gather business insights that will help you understand which of your services are essential to your clients and which are simply “nice-to-have.” This type of intelligence can be gathered from current and past clients during customer satisfaction surveys, and this is a question we will explicitly ask the pharmaceutical client. The information will help you to understand why your clients value you over competitors in this area, as well as any improvements you need to make to help them address their challenges.
Knowing your clients’ needs and expectations, as well as their satisfaction with the service you provided, is one aspect of understanding the value you bring. The other is how you differentiate yourself from other health economics consultancies in a crowded market. This is about showing that you offer something different to your rivals, which very often is the relationship you build with your clients. In other words, how well have you connected with your client?
Relationship building circles back to what I discussed in my last blog in terms of business development strategies. The “Insight Selling” model, which we endorse, demonstrates that what really matters in a crowded market is whether your consultant has connected with the client. Relationship is key.
The most successful consultancies typically win over their clients through one-on-one relationship building. However, this can also be a source of vulnerability for the consultancy because, typically, that means you have one consultant who is connected to one person in the pharmaceutical business, and if either of those people move on the entire account can be lost. To mitigate that risk, consultancies need to do more to shore up those relationships and introduce colleagues. That is something we help to address with our proactive key account management training.
Success in an economic recession will mean not resting on your laurels, but on building on your strengths and understanding your weaknesses and how to address those. Health economics consultancies will be crucial to pharmaceutical companies regardless of a downturn, but demand for services may well fall more than in previous years. Being ready to shore up your business when that happens will help you ride out a difficult year ahead. Contact me or my colleagues to learn how we can help you prepare for 2021.