ROA – or return on assets – is often a term reserved for business analysts or investors.
However, it should be in every pharma marketer’s vocabulary too.
Yes, ROA can guide important business management decisions. It indicates how profitable a company is in relation to its total assets, and reveals how efficiently a company uses its assets to generate income from a broader, macro-level.
In fact, an ROA perspective can also help shape the marketing strategies for pharma communicators as well as the appropriate level of resources that should be factored in when a company is seeking to expand the market.
Consider this advice from philosopher Xun Kuang:
“In order to properly understand the big picture, everyone should fear becoming mentally clouded and obsessed with one small section of truth.”
By focusing exclusively on their specific goals, marketers often miss big picture company plans, leading to unaligned strategies.
Understanding the company’s ROA pressures can help provide context for pharma marketers when creating strategies for new brands or deciding how much effort to put behind a mature product. With this context, marketers can better gauge the degree of marketing that’s needed and the level of resources required for a truly successful campaign (hint: it could also help you make the business case for a more robust PR effort).
There are two asset investments that factor into ROA that pharma marketers should pay particular attention to before launching a new product: brand/reputation development and research.
A heavy corporate reputation investment means your company is positioned to fight back against loss of exclusivity (LOE) and the threat of generics through brand loyalty. Patients and providers aren’t just choosing a drug – they’re also choosing the company behind the drug. With $260 billion at risk in global sales by 2020 due to patent expirations, your brand is a valuable asset marketers can’t afford to ignore.Once you understand the total investment into brand building and the expected ROA, you can make a more informed decision: put reputation at the forefront of your marketing efforts or recommend a campaign that begins to build brand trust.Click To Tweet
Similarly, a significant investment into research and development sets the expectation for how integrated data should be within your marketing campaigns. In 2017, pharma companies spent a record $71.4 billion on research and development, so it’s likely this is one of your company’s most important assets. Through a successful data-forward marketing campaign, you can ensure your company moves closer to its ROA goals.
ROA expectations can also guide the focus – and measurement/evaluation – of your campaign reports. Did the research resonate with your audience at a level that justifies the initial spend? Is the company’s reputation as strong as originally thought? Reporting these findings as they relate to the company’s ROA benchmarks gives marketers the ability to drive business decisions and future budgets.
ROA is an important element of any pharmaceutical company’s broader business perspective, and it’s time for marketers to truly understand its implications. When communicators get out of their silos and factor ROA into their approaches, the bottom line benefits.
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