Clarkston recently attended the inaugural Consumer Healthcare Products Association (CHPA) Marketing Conference in Philadelphia. The conference delved deeper into the marketing topics covered at the CHPA AEC Conference earlier in the year and provided insights into areas of interest specific to OTC marketers.
2018 CHPA Marketing Conference – 3 Key Themes
The consumer healthcare industry has been experiencing lower growth rates this year, but there is an opportunity to leverage advancements in marketing strategies to better connect with customers and drive growth. IRI attributed the slow growth in the industry to a lack of blockbuster innovation and a decrease in the levels of Rx to OTC switches. Although some companies saw growth because of the extended flu season, across the market, future growth is only expected in niche products until another major innovation occurs in the industry. As brands evolve and competition gets tighter, the biggest opportunity for growth in the industry lies in better understanding the customer journey. The 2018 CHPA Marketing Conference focused on three themes to help OTC marketers drive growth through the customer journey: personalization, digital engagement, and data.
- Personalization: You need to stay connected with consumers in a targeted, proactive, and meaningful way. Your customer segmentation needs to be specific and you need to find new ways to create a unique experience beyond the physical sale.
- Digital: Consumers will be won or lost in digital and new strategies and innovations are required. You should be exploring how brand engagements, both physical and digital, influence the consumer journey and explore new opportunities with a direct-to-consumer model.
- Data: Data is an asset. You need to find proactive ways to leverage your data to improve personalization, the digital experience, and fuel your competitive differentiation.
These three themes were also addressed in more detail in Clarkston’s 2018 Consumer Products Trends report. To prepare for these trends, here are three perspectives to combat the consumer healthcare growth challenges and drive new opportunities for growth below.
Align Marketing and Sales to Achieve Growth
Traditional methods of marketing are being continually disrupted with the availability of new tactics and technologies. There is an opportunity for better alignment between the sales and marketing teams by focusing the organization toward common incentives to give your organization a better understanding of your consumer and shopper behaviors.
As Clarkston’s Consumer Products Industry Lead Steve Rosenstock shared during the conference, there is now a greater need for better collaboration between internal, cross-functional teams. Specifically, companies need to determine how to best invest their marketing dollars across brand, shopper, and trade marketing to drive a favorable consumer experience and organizational growth. After all, everyone is focused on the same customer.
We have found that by rooting out the organizational barriers that cause misalignment between marketing and sales, managing marketing investments holistically, and better leveraging analytical tools and capabilities has measurable financial improvements.
Understand What a Direct-to-Consumer Model Means to You
When digital transformation within the consumer health industry is discussed, it includes a conversation around direct-to-consumer. Throughout the conference, we heard that OTC has been slow to evolve, but improvements are being made. Companies that continue to lag in e-commerce and digital should be aware that competitors are starting to innovate in this space and may quickly be left behind. In fact, e-commerce has enabled a new level of consumer-centricity – an environment where now some of the trendiest and most relatable companies launch and operate purely online.
There are a significant number of benefits of direct-to-consumer platforms where consumer healthcare companies are beginning to invest. By selling directly to the consumer, companies maintain a better brand control because they have final approval over the entire online presence.
When looking at your digital strategy and determining if direct-to-consumer is the right path for your brand, you need to look at the overall impact on the organization and determine where you want to play. Some areas of consideration are brand control and customer experience, access to unique customer data, IT infrastructure, channel management, fulfillment, and supply chain strategy, and digital readiness. Organizational change can be difficult but is necessary to compete in today’s marketplace.
Use Data to Your Advantage
Many consumer healthcare companies have customer data, but the use and understanding of data impact the ability to connect with the consumer. Over time, companies have collected and continue to collect massive amounts of data, but often times struggle with how to make that data into actionable insights, especially as it relates to improved engagements with customers.
Companies continue to struggle with the best ways to get the right information in the hands of the right decision makers. So often, there are different teams using the same data but coming to different conclusions. And as mentioned earlier, pre-digitally founded companies are at real competitive risk by the growth of digital-first competitors and the effects of disruption in the retail channel. Enter advanced analytics.
With advanced analytics, you have the ability to access new insights based on new ways of thinking. Whether you have the talent internally to explore analytics, or may not be there yet, you have options you can explore to make analytics part of your business today.
How OTC Marketers Can Unlock Opportunity with Cross-Functional Action
Marketing should not look at these challenges as something that they need to face alone. Your peers are also impacted by these changes in the industry and how they operate is challenging traditional operating models as they too seek opportunities to achieve profitable growth. As we think about how you can start the right conversations with your teams leaving the conference, use the following questions for OTC marketers as thought-starters:
- Are your consumer markets segmented to the right level? If so, do you have the appropriate data to be able to make strategic decisions to personalize consumer experiences?
- How does your digital consumer experience compare to those of your competitors? How can you create an experience outside of just product sales?
- Is your organizational structure and technology equipped to handle the changing demands of the consumer and the marketplace?
- How integrated are your sales and marketing teams and investments across brand, shopper, and trade?
- Do you have a holistic picture of your consumer and their shopper behaviors? How is this used to guide resource allocation and investment decisions?
- How collaborative are you with your cross-functional business partners in meeting the challenges of the market?
To learn more about our Consumer Healthcare consultants’ perspectives on the opportunities for OTC marketers and the modern marketing organization, or to learn more about how Clarkston partners with consumer healthcare companies in digital transformation, contact us.