Forget about cutting costs, focus on avoiding them
Healthcare marketers are increasingly focused on driving cost avoidance as a strategy to protect and even increase their budgets.
In the ever-changing environment of healthcare marketing operations, teams are increasingly forced to do more with less, which means finding ways to streamline workflows and drive efficiency. This is where cost avoidance (soft savings), as opposed to cost savings (hard savings) becomes a vital strategy to drive more with less. Cost avoidance for healthcare marketing teams means taking actions to prevent or reduce predictable costs in the future associated with commercializing pharmaceutical products. This differs from cost savings, which is the reduction of current spending, which may mean cutting marketing initiatives, or department RIFs. In fact, driving cost avoidance can arm marketing teams with the data and confidence to obtain increased budgets from their C-suite colleagues, as this measurement shows their spend is appropriately allocated, and achieves a better cost-performance ratio. Teams can start small in measuring cost avoidance, perhaps by isolating a specific, but common departmental deliverable. This involves establishing its current cost benchmarks, then implementing the strategy and comparing the new total cost against the benchmark. Successful strategies and measurement can subsequently be applied to other deliverables, avoiding budget cuts and streamlining workflows. A more detailed approach to simplifying cost avoidance measurement, can be found at the end of this post.
Focusing on avoiding unnecessary costs, rather than cost cutting, can offer a paradigm shift in how pharma companies approach their marketing strategies and return on investment. This often requires changes in processes, evaluation of partners and vendors, and anchoring these changes with new technology systems. For healthcare marketing operations, most of their costs are allocated to creative services, marketing, and media. If we use the traditional AOR hourly model costs as an example, focusing on cost avoidance may entail ensuring an agency’s time per project is capped, and or looking at a flat-fee pricing model. As new technology and more nimble agency offerings come to market, marketing teams have more opportunities to drive cost avoidance, simplify their workflows, and deliver better results. One such solution that is addressing these substantial budget line items is what’s been come to known as content supply chains (CSC) and digital experience platforms (DXP). These tech driven solutions are revolutionizing how healthcare marketing teams get content to market, create personalized content at scale, and enable omnichannel strategies. The latter of which, has seen a slower uptick in adoption among life science companies. We have outlined a few ways in which these platforms can play an integral role in increasing cost avoidance.
Streamlining Processes Through Automation
In a sector where efficiency is key, automation emerges as a cornerstone in the facilitation of streamlined processes. By relegating repetitive tasks to automated processes, marketing teams can free up valuable time and resources, focusing on high-value tasks and strategies that drive innovation. This approach ensures that the workforce is utilized in areas where human intellect is indispensable, thereby avoiding costs associated with manual handling of routine tasks.
Enabling Cohesive Collaborations
A collaborative work environment goes a long way in promoting cost avoidance. These platforms enable real-time updates and cross-functional collaboration, ensuring a unified vision and avoiding the pitfalls of a siloed working environment.
Upholding Compliance and Regulatory Standards
In the pharmaceutical industry, adhering to compliance and regulatroy standards is not just a prerequisite but a continuous endeavor. A content supply platform designed for life science companies assists in maintaining a clear audit trail of all activities and directs reviewers’ attention to content that is new vs. already approved. Content history is effortlessly tracked, approval status is clearly displayed, and redundant tasks are eliminated, guiding MLR team members to concentrate precisely where their expertise is required.
Embracing Data-Driven Decision Making
Incorporating analytics and a feedback loop can foster a data-driven content production and targeted personalization. Analytics facilitate the optimization of marketing strategies by weeding out fewer effective strategies, while predictive analytics help in forecasting market trends, aiding teams in avoiding costly mistakes.
Optimal Asset Utilization
The reuse and repurpose strategy facilitated by leveraging content modules drives significant cost avoidance. Lifecycle management of content, including archiving outdated content, ensures that teams avoid the mistakes of misusing obsolete, or unapproved content.
In conclusion, these platforms are emerging as an essential tool for life science companies wanting to enable omnichannel strategies, accelerate content time-to-market, and ultimately drive efficiency and cost avoidance. By focusing on proactive strategies such as automation, collaboration, stringent adherence to compliance, data-driven decision making, and optimal asset utilization, pharma companies can champion the cause of cost avoidance measurement, steering towards a future of sustainable growth and enhanced profitability. Leveraging DXP or content supply chain platforms allows for a holistic approach to cost avoidance, where foresight meets innovation, paving the way for marketing operations that are not just successful, but sustainable in the long run.
Measuring cost avoidance:
1. Isolation of a Work Deliverable:
Identify and isolate a common departmental work deliverable that incurs a significant cost. It could be a repetitive task or process that is central to the department's function.
2. Benchmarking:
Determine the current cost benchmarks associated with the selected deliverable. This involves gathering data on all the existing costs (both direct and indirect) involved in executing the deliverable under the current conditions.
3. Developing a Cost Avoidance Strategy:
Teams should formulate a cost avoidance strategy specifically targeted at preventing superfluous costs identified in the benchmarking stage. The strategy might involve process optimization, leveraging technology, renegotiating vendor contracts, or other cost-avoidance mechanisms.
4. Implementation:
Implement the cost avoidance strategy and execute the work deliverable according to the new strategy.
5. Evaluation:
After a defined period, evaluate the total costs incurred in executing the deliverable with the new strategy. This should encompass all associated costs, including any new costs introduced by the strategy.
6. Comparison and Analysis:
Compare the total costs after strategy implementation with the initial benchmark costs to identify the extent of cost avoidance achieved. This analysis should consider qualitative factors as well, such as improved efficiency or enhanced quality, which might translate to long-term cost avoidance.
7. Replication:
If the strategy proves to be successful in reducing costs for the initial deliverable, replicate the strategy across other departmental deliverables. Teams can iteratively refine the strategy based on learnings from each implementation to maximize cost avoidance in subsequent replications.
8. Continuous Monitoring:
Establish a continuous monitoring mechanism to keep track of the cost avoidance realized over time and to identify opportunities for further optimization.
9. Reporting:
Regular reporting of the cost avoidance realized through the strategy is essential to maintain transparency and to demonstrate the value derived from the initiative to stakeholders.
By applying this structured, yet simple approach, teams can methodically identify opportunities for cost avoidance and measure the actual benefits realized through their strategies. It promotes a culture of continual improvement and cost efficiency. It's also a good practice to incorporate feedback loops for continuous refinement of the strategy based on real-time experience and data.
