For a couple of years now, executives across a range of industries, including pharma, have been arguing that e-business is dead. Len Starnes, Head of European e-Marketing at Schering AG and a speaker at eyeforpharma’s upcoming e-Sales & Marketing Strategies for Pharma Europe 2002, disagrees. According to Starnes, it’s just a case of e-business settling into its rightful place as part of organizations’ overall business strategies. He suggests companies are simply beginning to recognize that ‘e’ is no longer a special way of doing business, but simply a new part of business as usual. (8/20/2002)

“One of the things we are starting to realize is that e-marketing is part of marketing,” Starnes said. “It sounds trite, but we’re talking about using e-marketing as just one activity of marketing - as just one part of the mosaic. It’s important not to see ‘e’ as something special, it has to be looked at as part of the armory of activities that we have available to achieve what we think is appropriate.”

Although Starnes recognizes the important roles e-business departments played during the emergence of ‘e,’ he believes their responsibility was always meant to be short-lived.

“At one stage separate departments were necessary to jump start things, but the huge departments were pre-destined not to live very long,” Starnes said. “People now recognize that it’s not the way to go, because ‘e-people’ are then deemed to be different from marketing, and it doesn’t function very well. Integration into regular marketing - getting people that were in ‘e’ into regular marketing - is important.”

But he suggests, people were wrong to view this business shift as a sign that e-business, as a whole, is dead.

“e-business, as such, isn’t dead because there are very specific issues to ‘e,’ but it depends on where it is done,” he said. “There were some companies that gave their e-people separate budgets for e-initiatives, but you can’t have marketing and e-marketing fighting and doing different things. It’s all got to come from one group in marketing and sales who look at strategy as a whole and have a say in how the budget is used. It sounds like common sense now, but a couple of years ago it wasn’t so.”

This, Starnes suggests, is also the best way to coordinate on- and off-line initiatives and, in turn, realize the most efficient marketing campaigns. “If everything in the marketing department is linked together and you’re following a common strategy, then on- and off-line are already integrated and one compliments the other,” he said.

Starnes advises when you view e-business with the same eyes you view the rest of your business activities, and the more you understand it, the more value you will deliver from it.

“The value we generate from ‘e’ activities should be compared with the value we can generate from other activities,” he said. “Whether we use ‘e,' is dependent on what sort of returns we expect. How we actually get that value maximized, rests more I think on a much more profound understanding of business modeling.

“I think up to now, what we have done is build Web sites, and that’s been fun - it’s been a great time,” he continued. “But we’ve spent money on Web sites without really thinking enough about how they work, and, above all, thinking about the business models on which Web sites have been built. Maybe we haven’t linked in the strategies for using those Web sites sufficiently with the overall marketing strategies.”

Starnes suggests when it comes to generating value from any sort of ‘e’ initiative, it’s essential to build, monitor and optimize your business model.

“Understanding business models, looking at them and formulating them, is becoming very important,” Starnes added. “Understanding the model first, proposing the model and then building the site around the model is the way that you can deliver value. Then obviously monitoring that - seeing if your hypotheses regarding the model really do deliver, and then optimizing on that.”

According to Starnes, building a business model is one of the most efficient ways to monitor the success of certain projects, and in turn increase efficiencies.

“If you get a model like that, by feeding in performance parameters, such as log file data, you can monitor to see how well a user actually goes through your Web site and does the things you want them to do,” he said. “So you’re looking at specific metrics that are key to converting users to your brand and retaining them to your brand.”

Starnes is also a firm believer that business models can enable companies to plan more wisely, and therefore make more educated decisions about where they choose the invest.

“The problem now is that everyone is looking at where to invest,” he said. “I think one of the best investments is to get people to think more before they act. Again it comes back to thinking about the strategy, thinking about the business model, before you go out and talk to vendors. It sounds simple, but it’s not something pharma’s really done in the past. I would say companies need to put in a lot of heavy thinking, draw up a business plan that makes revenue and cost forecasts within the first 2-5 years so you can see when your investment will break even. Thinking upfront will save you a lot of money.

“Companies need to have something very specific, such as a ‘what if’ type model that they can use to plug in numbers and assumptions, and look at what comes out in terms of sales,” he said. “That enables them to make projections, and on the basis of that, they can make sales forecasts, and on the basis of that, they can see what their ROI is on their investment in any particular e-project. That’s nothing new, it’s the type of ROI projection companies have been using for years. It’s something we’ve always been afraid of doing for ‘e’ in the past, - we’ve always said it was too difficult. It is difficult, you have to make a lot of crucial assumptions. But if you look at the modeling involved in other activities, there are an awful lot of assumptions there too, and I would question whether the assumptions you make for ‘e’ are any worse or more inaccurate than for any of your other activities.”

Although it’s often human nature to shy away from those projects we anticipate to be too difficult, Starnes suggests now is the time for the pharma industry to correct many of its current transgressions.

“I’m not a believer in big-bang changes, but I think we are doing a lot of things wrong already, and I think it’s a time to do things correctly in the pharma industry,” Starnes concludes. “One of the things I believe that many of us will look much closer at are the investments we are making in ‘e,’ and what sort of returns can we get from ‘e.’ We need to start looking at ‘e’ in a much more realistic way, comparing e -initiatives with other initiatives, and just treating it in a way that’s not so special anymore. I think that’s already happening in a way, even though it doesn’t make it sound very glamorous anymore.

“I also think lots of us are going to be a lot more skeptical about hype and about new technology,” Starnes suggested. “I think there will be a roll out of ‘e,’ but based more on business case. We have looked at ‘e’ in many areas, but I think it’s only applicable in certain areas; to certain brands; in certain therapies; and where there is a specific business case for it. I believe it’s this transition from ‘e’ to ‘business as usual’ that is going to characterize this next six months in pharma.”

Len Starnes will be speaking at eyeforpharma’s upcoming Sales & Marketing Event in Amsterdam. You can hear more about Len’s thoughts on the best way to integrate your marketing strategy and hear other best practices from across the industry, at this innovative event.

e-Sales and Marketing: proving integration and not isolation is the key to an effective strategy

More and more pharma companies are waking up to the fact that integration, not isolation, of e-business into their overall sales and marketing approach is the key to developing a successful strategy for the years ahead. (8/29/2002)

“One of the things we are starting to realize is that e-marketing is just a part of marketing,” said Len Starnes, Head of European e-Marketing at Schering AG. “It sounds trite, but we’re talking about using e-marketing as just one activity of marketing - as just one part of the mosaic. It’s important not to see ‘e’ as something special, it has to be looked at as part of the armory of activities that we have available to achieve what we think is appropriate.”

It’s a topic on everyone’s lips and promises to take center stage at the upcoming eyeforpharma e-Sales & Marketing Strategies for Pharma, Europe 2002 event, 18-19 September, in Amsterdam. Structured to include two days of presentations from leading industry executives and one day of highly interactive workshops, the conference has been tailor-made to provide attendees with strategic insights into how to increase campaign success, bolster profits and help maintain a driving competitive advantage.

An industry report published earlier this year by Forrester suggested the industry is currently witnessing a shift. “Powerhouse firms like Bayer, GlaxoSmithKline, Johnson & Johnson and Merck have moved Internet specialits into traditional marketing and IT groups, forcing online initiatives to fight for their share of marketing spend- and prove their value against more tried-and-true sales and marketing initiatives.”

Starnes believes integration also will lead companies to a more productive future, something heavy on the minds of sales and marketing departments across the industry.

Another report produced by Cap Gemini Ernst & Young and INSEAD predicts companies will have to dramatically increase marketing and sales productivity to meet their 30% revenue growth plans over the next 5 years. The report also suggests the traditional sales force will disappear and be replaced by reps specialized to customer segments. New executive roles and cross-functional teams will emerge, championing the interest of the customer by cutting across traditional organizational boundaries.

Alasdair Mackintosh, VP, Global Leader - Life Sciences CRM, Cap Gemini Ernst & Young, a speaker at e-Sales & Marketing Strategies for Pharma, Europe 2002, will address the points raised in the company’s latest collaborative report with INSEAD entitled: ‘Cracking the Code – Unlocking New Value in Customer Relationships.’ His presentation will provide attendees with an insight into the reports findings, in particular: the current state of CRM and its transition from operational to analytical focus. In addition, Mackintosh will focus on the integration of traditional and new marketing channels; implications for organizations and IT architectures; and what pharmaceutical leaders are doing to gain competitive advantage.

Starnes agrees that companies need to identify, now, what they hope to achieve with integrated departments in order to gain competitive advantage.

“Companies need to have something very specific, such as a ‘what if’ type model that they can use to plug in numbers and assumptions, and look at what comes out in terms of sales,” he said. “That enables them to make projections, and on the basis of that, they can make sales forecasts, and on the basis of that, they can see what their ROI is on their investment in any particular e-project. That’s nothing new; it’s the type of ROI projection companies have been using for years.”

The two-day conference, followed by a one-day industry workshop, will feature presentations from industry leaders, including Derek Williams, Senior VP , Global Strategic Marketing, Bayer; Ian Dane, Director e.Business & New Product Planning Europe, Eli Lilly; Robert Nauman, Director of e-Marketing and Customer Strategy Global e-Business, GlaxoSmithKline; Vladimir Barak, Head of Global Sales & Marketing Information Management F. Hoffmann-La Roche Ltd; Ewa Rockmyr, Global eBusiness, GI, AstraZeneca; and Piers Shore, e-Business Manager, Lilly Japan. The event will discuss how companies can augment their sales and marketing success through efficient and essential integration of online strategies and professional CRM within sales forces, as well as traditional marketing activities. In addition, attendees will be able to benefit from a number of opportunities to network with peers and colleagues from across the industry.