ROI or ROR for business in Pharma

A lot of Pharma people often ask about the ROI or Return on Investment of new media, including social media.  The reality, though, is that it's a lot more complicated than that.

Why?

Because the value of any marketing or sales channel is more than just push marketing and measuring the impact on various metrics.  It's about building strong relationships in time, rather than investment in money.  My friend Rory Murray calls this "return on relationships".

Think about the experienced sales reps who have been seeing the same doctors for years, have built a network of relationships and generally hate marketing stuff.  They don't sell successfully from detail aids, they do well because the doctors have formed a relationship and like and trust them. 

The same thing happens in marketing and managed care. 

Remember those KOL's?  The brand that builds solid and strong relationships with the academic experts has more influence than the one that doesn't.  Doctors often buy on emotion, not logic.  Those who have good channel relationships in appropriate managed care areas do considerably better than those who don't, as Lilly found out to it's cost with Effient recently.

If you put all of those aspects together, you can see that a launch success or failure is almost predicted from the start.

So how can social media help? 

Well, think of it as a way of strengthening your online reputation; if you push stuff out there but don't engage, what does that tell customers and consumers about you?  Ultimately, that approach will weaken your image.  However, if you appear engaged, authentic, helpful and sincere then inevitably, people will have a more favourable impression.  This is why I like the way some Pharma Twitter accounts such as Roche and Boehringer interact with people.  They answer questions, provide information and generally do a nice job of being cheerful and responsive without being pushy. 

With others, though, it's like getting blood out of a stone. They don't seem to listen or interact and constantly push out stuff in a semi advertorial fashion; it's all about them, not the consumers or listeners.  Of course, that approach has influenced my opinion of the company and its products more negatively.

Rory recently posted a short presentation, which I highly recommend.  Take a quick look at what he has to say:

ROR = Social Media’s ROI

View more presentations from Rory Murray.

In an increasingly networked world, we can see that the new currency is becoming time and relationships, rather than money and investments.

What do you think?

Comments

[Chris Iafolla]

Thanks for the post Sally. ROI is a metric that has always been a bit ill-defined. As a PR person, you might expect me to say that. But here's my problem: ROI is a lagging indicator. In other words: it does little to help you adjust your programs on the fly and evaluate success in process. Instead, it merely measures (the accuracy of which can be debated) how successful a program has been once it concludes. Good companies measure using leading indicators, that both measure success in process and at the conclusion.

As you point out, many companies (not just pharma) need to shift their thinking on this matter to encompass other variables such as Return On Relationships. Sally Susman talks a lot about the Return on Reputation for Pfizer. These measures are not perfect, but taken as part of a full range of marketing metrics, they paint a much clearer picture. One measure (albeit much more difficult to quantify) I have been talking about recently is Return on Health (ROH): http://prforpharma.com/2009/11/13/pharmaceutical-social-media-focus-on-the-patient-and-return-on-health/. The idea is more of a decision-making framework than anything, but it aims to put the patient at the forefront of all pharma social media efforts.

In any event, it is encouraging to see the conversation of measurement moving beyond imperfect metrics such as ROI.

[MaverickNY]

Hi Chris, thanks for your thoughtful comment.

Am inclined to agree with you that ROI for PR programs are hard to adjust on the fly, same with sales implementation in many ways. You can measure baselines easily, implement a tactic or program and measure the impact. Refine, enhance, repeat etc.

However, if you look at things more strategically over time, you can sense the big picture better and therefore steer and adjust more easily, a bit like a car driver can see the road ahead and adjust direction and speed according to conditions.

That's where the value of measuring the impact of relationships, reputation and for want of a better word, awesomesauce, comes in rather than investment and ROI, which is much less flexible.