Breaking through in B2B: Redefining health system marketing

“We’re at a critical point…We’ve created field structures for key account management through COVID, and, after many fits and starts, our leaders are left wondering if our marketing to health systems is working…I think they all came to the same realization that the value is there in pockets, but we are not set up in the right way to really scale that value.”—B2B marketing executive

With more than 70% of patient volume now flowing through large, organized health systems, the need for health system or B2B marketing in life sciences is only increasing. Access for sales representatives continues to decline, while health systems continue to evolve toward value-based care, focusing on population health to combat rising costs.

Since 2020, 90% of leaders in life sciences have identified key account management (KAM) as a strategic investment priority, along with the capabilities to support it. Some organizations have created B2B marketing teams with three typical areas of focus:

• Branded engagement, typically supporting contracting
• Above-brand engagement, including education programs, protocol and pathway enablement
• Account-based marketing, including localized “surround sound” for account initiatives

ZS leaders recently held a roundtable discussion with B2B marketing executives to understand gaps and opportunities.

ZS data indicates that provider organizations are more interested in life sciences partnerships than ever before. In our roundtable discussion, executives surfaced four key areas that B2B marketers are wrestling with.

• Structure: Where should B2B marketing capabilities reside?
• Talent and skills: Do we have the right talent that is distinct from brand marketing?
• Impact: How can we best measure the effectiveness of B2B marketing tactics?
• Organization buy-in: How do we generate the right sponsorship?

The right answer for your organization depends on the type of KAM the organization chooses as its strategy. For some organizations, selling a product to a system is the focus (such as formulary and pathway projects and electronic medical records updates), while others focus on advanced solutions, such as population health programs or health equity initiatives.

Ultimately, any strategic choice should be in line with business needs. For example, Novartis prioritized advanced solutions by partnering with hospitals and the American Heart Association on Target: Heart Failure update protocols, outcomes tracking and best practice sharing aligned to address population health needs.

“I think the center of excellence model was best for us when the portfolio was simpler, but now I’m not sure…It has become very hard to deliver value across the portfolio.”

One realization from the roundtable was that the organizational structure for B2B marketing varies widely, with no one-size-fits-all solution.

Typically, we see two models emerge: decentralized, where B2B marketing teams reside within the business unit (BU) alongside key account managers), and centralized, where B2B marketing is outside of a given BU and may function as a center of excellence. There are pros and cons for each:

To determine the best fit for your organization, consider the size of your KAM organization, focus of the key account managers (BU versus enterprise) and the similar needs of the individual brands and therapeutic areas. Every organization is different. One large pharma organization has BU and enterprise KAM that leverage an enterprise account marketing function and BU-specific marketing teams. A medtech organization has only enterprise key account managers and B2B marketing as an enterprise capability.

“Traditional marketers focus on return on investment and weekly metrics, but we’ve made a lot of progress educating our leaders on why B2B marketing is different…this is about the long game.”

Currently, B2B marketers face the challenge of demonstrating value within the traditional quarterly business cycle, a task made more difficult by the longer-term focus of KAM. KAM requires considerable time to identify, develop and deliver new strategies or solutions aligned with the priorities and needs of your most important and complex customers.

To address this, we recommend a balanced scorecard approach, incorporating both leading and lagging indicators to direct efforts and focus on outcomes that map to long-term patient impact. In fact, we often see companies focused more on leading indicators and voice of customer (VOC) early in the adoption process, slowly shifting their key performance indicators (KPIs) over time to include more lagging indicators as data becomes available.

As a case in point, ZS recently worked with an emerging biotech company to cocreate KPI scorecards for a product launch that included a heavier focus on VOC feedback and leading indicators. Some of the leading indicators included “guideline implementation in the EHR,” “care pathway optimization,” “stakeholder engagements” and “number of insights shared by key account managers to the marketing team.” Postlaunch, the manufacturer introduced a quality data improvement project across multiple key customers that increased the identification of high-risk patients. The result was an increase in the identification of high-risk patients and a greater perception of the manufacturer as a collaborative partner driving toward shared goals. Subsequently, the manufacturer was able to shift its KPIs with more focus on lagging indicators.

The industry lacks consensus on the best B2B marketing metrics. However, there are general guiding principles:

• Connection to organization objectives: B2B marketing and tactic metrics should closely tie to KAM program objectives and connect to brand and BU objectives.
• The “right” leading indicators: Leading indicators should move beyond volume of activities and focus on evaluating the quality and breadth of relationships with C-suite and D-suite (decision-makers) stakeholders. In addition to the quality and breadth of relationships, consider adding indicators like numbers of projects initiated.
• Voice of customer: Capture customer feedback on engagements and bring it back into the organization to revise and refine marketing strategies.
• Shared metrics tied to mutual value: It’s critical to tie metrics to shared objectives (for example, improving patient outcomes and enhancing care delivery) to ensure shared accountability.

“The best thing we did is to stop thinking about B2B marketing as a rotation for former reps or marketers on the rise and more as a specialized capability.”

Many B2B marketing stakeholders have struggled with talent, quickly realizing B2B marketing requires a different skill set than traditional life sciences brand marketing. Some have created separate competency models and incentive structures, focusing on a more consultative skill set that identifies customer needs and account programs that will drive mutual value. In some organizations, value and access or medical backgrounds have been found to be more helpful than traditional marketing, given the deep focus on health systems.

A few desirable skills for B2B marketers include:

• Strategic agility: Understand complex multistakeholder decision-making processes and develop compelling strategies that resonate.
• Customer understanding: Develop a deep understanding of customer needs to foster long-term partnerships.
• Collaboration: Work collaboratively in headquarters (for example, compliance) and across customer-facing teams to identify strategic needs and support pull-through.
• Innovation: Be creative in finding new ways to solve problems for organized customers.
• B2B expertise

“Before we had our SVP on board, we were just seen as a cost center. Now they see us as one of the big bets for the long term. They ask us about long-term value, no longer just cost.”

Generating organizational buy-in for B2B marketing is critical due to the longer-term time horizon to realize impact and the need to develop the capability, which can take two to three years.

A few tactics to cultivate support and buy-in:

• Identify an executive sponsor to champion B2B marketing within the organization
• Create a leadership board to advise on overall B2B marketing strategy and approach
• Develop a KAM program office to embed KAM and B2B marketing as key capabilities

With increasing portfolio expansion across pharma and medtech, the next few years could bring a significant evolution in B2B marketing within life sciences. There are four actions commercial executives should take to create a next-gen B2B marketing organization:

• Rethink structures: Find the right design that makes sense for the portfolio three to five years from now to enable new ways of working.
• Reimagine skill sets: Evaluate the skills of “good” B2B marketers and adjust sourcing mechanisms to find the talent you need.
• Reset expectations: To move from an ROI mindset to an outcomes mindset, B2B teams must define, model and incentivize value.
• Rejuvenate sponsorship: Focus on educating commercial leaders as well as legal, regulatory and compliance leaders to convert them from B2B skeptics to advocates.

Organizations that prioritize the right structure, talent and capabilities have shown they can scale patient impact across a portfolio. Those that continue to underinvest will fall behind, with negative effects on provider experience, patient outcomes and even brand sales.

Which path will your organization choose?