Life Sciences firms have always understood the importance of reliable data in the lab, but what about collecting and understanding customer data for successful marketing efforts? The emergence of Big Data has allowed these companies to more fully engage with their customers, employees, investors, and suppliers, yet many firms still have not established value-added connections with these different customer groups.
But connection to the customer could be the most valuable asset of a Life Sciences firm, and any firm. In a recent Forbes.com article, marketing expert Niraj Dawar points out that pharmaceutical companies with an emphasis on subscriber and doctor relationships – in other words, customer-centric companies – are in the “driver’s seat” of the industry, acquiring the firms that solely rely on technological strength and patents.
This idea, that a more customer-centric approach is needed in biotech, is certainly in keeping with trends of other industries. Customer surveys are proliferating across the internet at a staggering pace, and firms are investing more than ever in customer relationship management software. Customer demographics, purchase intention, and purchase history are filling databases for service and product oriented companies. But with all the money being invested in customer solutions, are customer needs being met on a deeper level, or at a higher rate?
According to a global consumer survey administered by Accenture in 2013, customer switching is at an all-time high. 51% of respondents switched service providers during that year. A staggering number, to be sure, and one that would seem to justify any expenditure on solutions that may inspire more customer loyalty. But the obvious inference is that all the customer data gathering is not helping. Customers are still defecting, or constantly looking to defect. Soliciting feedback and engaging customers, while seemingly worthwhile, doesn’t seem to be affecting switching behaviors. How can this be?
The answer may be found in the distinction between measurement systems and improvement systems. It is one thing to collect the data, but understanding how to use the data is an entirely different challenge. As Andre Schwager states in his Harvard Business Review article Understanding Customer Experience, “The problem is that measuring customer satisfaction does not tell anyone how to achieve it.”
Clearly, the measurement is needed. After all, firms must understand that there is an opportunity to grow before they will attempt growth. Measurement also has diagnostic value – understanding where there are deficiencies. Improvement, however, is every bit as important. It’s the corporate equivalent of the sentiment: I will do better. It lets customers, employees, investors, and suppliers know that you value them, that you care about what they care about. Even the attempt at improvement has value. Customer behavioral-intention research shows that any sincere effort to resolve a service failure results in fewer switching customers. Of course, real improvement requires knowledge of ever-evolving customer needs.
Biotech companies, like all firms, can ignore the shifting needs of customers only at their own peril. Unless systems and personnel are in place to adapt products and services to these shifting needs, customers will be looking for substitute products, or competitor offerings. In both cases, neither the company nor the customer are getting what they want.
In the coming years, through the swarm of big data innovations and technological advances, it is perhaps most important that biotech firms remember the words of Peter Drucker: “The customer is the business.”