Dear Colleagues! This is Pharma Veterans Blog Post #460. Pharma Veterans welcomes sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi onWordPress, the top blog site. Please email to firstname.lastname@example.org for publishing your contributions here.
Continued from Previous……
Customer Expectations Have Changed
Pharma customers have been pampered beyond reason for quite some time. In the interest of faster growth and greater market share, the top companies have increased their cost of selling seriously. Sponsorship cost of medical conferences has risen astronomically and is many times more than the actual cost incurred on the event. There are many other kinds of investments and sponsorships which remain on offer and in practice. When COVID lockdown struck, all running investments went bad. No one could ask for ‘Return on Investment’ because the situation was beyond human control. During lockdown, all investments were literally erased. As the lockdown eased, the Pharma companies enthusiastically ran with fresh and bigger offers. Mentioning the previous things was considered taboo. This has led to the impression that the ‘ROI’ can be readjusted in favor of customers. The resulting increase in customer expectations is logical.
Customers Demand Personalized Service
The customer-salesperson contact was stopped almost completely at first, which was later regained in part. Wherever the contact was reclaimed, it was more on a personal basis. The nature of relationship therefore changed. Under the normal circumstances, a Pharma salesperson contacts around one hundred customers. During and shortly after lockdown, this number went down to one fourth or even less. The level of personalized attention and care thus created can be easily imagined. Even after greater normalization, the demand for personalize services has stayed.
Business Size is Fluctuating
This may sound paradoxical because the figures say that the business has grown. On the whole, yes, the market value has increased. However, it must be seen in combination with two important factors. One, the extraordinary sales of certain COVID-related products which would be very small otherwise; and two, the impact of price increases during the middle of the year. In reality, business has been fluctuating. There are good periods and lean periods.
Cost of Goods has Increased
The plants of raw materials in China and India shut down for few months. When operations resumed, prices of all materials were increased on the pretext of short supplies. The price hike still sustains
All shipments went on hold due to stoppage of flights. Cargo flights started operating earlier and the airlines charged exorbitant freights in order to compensate for their losses during COVID. While the flights were stopped, the entire burden of transport came to sea shipments. Containers went into short supply and this plus COVID resulted in unprecedented increase in sea freights. Even after the situation had normalized, the increase in freight continued. During the same period, Pak rupee lost considerable value against US Dollar.
Pakistan imports over 90% raw materials and packaging materials. The above factors have resulted in significant increase in the cost of goods. It is likely to stay up there indefinitely, may be forever.
The New Normal is quite different in many ways from the Old Normal. I would again emphasize that the Old Normal is not going to come back. We all need to adjust to the New Normal.
- Reassess the business landscape and adjust forecasts and expectations. Pushing ahead with full force may sound heroic, but not wise. The topline is important, but bottom line is even more beautiful.
- Redo marketing strategies. Consider current scenarios and build alternate scenarios. Marketing is about flexibility and adaptability, not rigidity; about never pursuing illusions.
- Rationalize costs. The candle is literally burning from both ends. And the Red Ocean is getting bloodier. Hold yourself, watch and move more carefully.
- Realign Teams with the New Normal. It may require retraining and reorientation but is worth doing it.
- Rebuild relations with customers while adjusting to New Normal. Talk politely and openly, but firmly. Set the business expectations right. Not every customer will be happy with it, but many reasonable persons will understand.
- Promote Trust – within teams, among staff, with customers and vendors.
COVID is a tough thing. It can only be handled with patience, resilience and faith.
Disclaimer. Most pictures in these blogs are taken from Google Images which does not show anyone’s copyright claim. However, if any such claim is presented, we shall remove the image with suitable regrets.