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What's the secret behind Viagra's rewards program?

Peppers & Rogers analyzes Pfizer's new Viagra customer rewards program, a prime example of focused consumer programs using direct marketing channels.

In the movie Something's Gotta Give, music executive Harry Langer is rushed to the emergency room after having a heart attack. While first denying that he uses Viagra (sildenafil citrate), he quickly rips the IV out when the doctor says that the nitro glycerin drip in his arm can be lethal when mixed with the drug.

The scene, though funny, drives home the point of Pfizer's new Value Card for Viagra program: direct-to-consumer communication. "There is important information [we can provide] in how to take Viagra correctly," said Janice Lipsky, Viagra's marketing director. "That kind of information can be reinforced through relationship marketing."

Under terms of the rewards program launched April 14, members whose Viagra purchases are not covered by insurance get every seventh prescription free, representing 45% of all Viagra prescriptions, Lipsky said. So far, 4,000 of Viagra's 23 million users have signed up for the loyalty program.

Pharmacies will track the purchases and provide the rebates at the point of sale. More than 33,000 pharmacies are currently enrolled, including Rite Aid, Duane Reade, Eckerd, Stop & Shop, Wal-Mart and Target.

Who's the customer?

Pfizer plans to use the program as a communication tool to understand and meet members' needs better. "We really want to find out what their interests are attitudinally and what [kind of information] they need to be successful in their treatment," she adds, such as, "how to bring up this topic with their doctor" or "discuss it with a female partner."

The new program is not a strategic shift away from physicians, Lipsky said. "We're going to enroll patients through the physicians' offices, as well." Pfizer hopes the program will provide an incentive for men to speak to their doctor about their health problem and about Viagra. "We see the physicians having a key role in this program,"she says.

Lipsky sees opportunities for cross-promotions and plans to survey members to gauge their interest in other medical-condition information and third-party offers. Members will be asked to opt-in to receive e-mail.

Pfizer plans to evaluate metrics in six months and will look at customer satisfaction and retention. "We don't have lots of benchmarks [yet]," Lipsky said, but "we will be able to measure how long someone stays in a program." Despite the fact that competing drugs have recently come onto the market, Lipsky said this program has been in the works for a long time.

Our take

Direct-to-consumer (DTC) marketing is an established business in the pharmaceutical industry. But pharmaceutical companies like Pfizer are now shifting resources away from mass-media campaigns to more focused consumer programs using direct marketing channels.

The April issue of Pharmaceutical Executive magazine reported that many major pharmaceutical brands (not just lifestyle drugs) use rebate and discounting programs to entice consumers to try their products, sign up for newsletters or provide personal information to the manufacturer. To date, these programs are primarily discount- or loyalty-focused, and only scratch the surface of developing true customer relationship capabilities. But as pharmaceutical companies learn more about their patients, it opens the doors to developing one-to-one relationships with individual consumers.

For more information

Read other recent Peppers & Rogers Group pieces:

In a merger, don't forget your customers

Winning the "Moneyball" game

With ROI, foresight is 20/20

For Pfizer, differentiating consumers by age, marital status, insurance coverage, underlying conditions and psychological factors will enable the firm to customize its messages to individual consumers. It can build appropriate customer relationships for various stages consumers go through -- from gaining awareness, through intent to try Viagra, to becoming an educated consumer.

The physician connection: the next frontier

Once basic CRM capabilities with patients are in place, pharma companies have an opportunity to integrate their consumer and physician marketing programs to develop truly effective relationship programs. Unfortunately, most firms create consumer marketing groups in organizational silos that are far removed from any of the more traditional physician or managed care marketing activities.

If these silos can be overcome, the opportunities are vast. Physicians could provide better care based on improved patient information. They would no longer resent pharmaceutical DTC efforts, which have been criticized for creating an unjustified demand for expensive drugs. And pharmaceutical companies could become a true partner in improving patient health by educating and encouraging the right dialogue between patients and physicians in a cost-effective way.

Ultimately, the key to success for consumer-focused programs such as Pfizer's Viagra savings program is to think broadly about achieving the best patient care; capture information that enables improving the care of the individual patient; and find the most effective way to communicate with consumers -- integrating communication efforts through multiple channels and audiences, including the patient, the caretaker, the physician and the patient's HMO or MCO.

Copyright © 2004 Carlson Marketing Group, Inc. All rights reserved. Peppers & Rogers Group is a Carlson Marketing Group Company.

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