Uncertain environments always favor nimble and innovative companies. If an entire market is undergoing sudden changes and low demand challenges, it becomes clear that the business-as-usual practices will not be enough for a company to overcome the situation. This also applies to the insights that companies gather to better understand their customers and to build specific strategies.
The business world nowadays is obsessed with numbers and statistics. These figures can provide great clarity about the success and the outcomes of different decisions. Although they are a fundamental part of successful business administration, they are often not enough. Numbers are great at explaining what happened but fail to answer the more important question, why did it happen? They provide marketers with the illusion of insight, although seasoned marketers still rely on their intuition to make sense of raw numbers.
That is why any business that wants to thrive in a competitive environment, especially in the pharmaceutical industry, has to complement the traditional measurable consumer behavior with a comprehensive analysis of the cognitive processes that fuel the consumers' behavior. Pharmaceutical, Healthcare, and Tele-medicine industries are some of the fastest-growing in the world. Although no industry has escaped the impact of COVID-19, from a macro perspective, the Pharma industry seems less affected than other industries.
Although "the numbers" might make people feel optimistic about the industry, statistics mean nothing unless put into context. Indeed, several brands and products might've benefited from the situation. Big Pharma companies that research promising vaccines, telemedicine providers, and COVID-19 related drug producers are unrepresentative for the impact of the virus on the whole industry.
The Pandemic brought a sudden change in customers’ shopping behavior. There is a clear shift in demand for drugs that are believed to protect against COVID, as the sales of vitamins and mineral supplements have reached record-high levels during the pandemic. Some pharmacies report a 150% YoY increase in average product sales for immunity-enhancing products. The trend was more prominent at the beginning of the pandemic but it is still lagging, months later. Generally, products that are not chronic treatments or COVID-related have suffered the most, as people are prioritizing other areas for their spending.
The whole structure of the Pharma industry suffered complex changes. McKinsey's report on the coronavirus impact on the global economy talks about a trend of acceleration, where already existing trends have been fast-forwarded a few decades in a few days. Take Telemedicine, for example, an industry already booming, that has clocked a 10x growth rate in just 15 days. The new Telemedicine customers consist of "generally healthy people looking for a quick sick-care visit and... people with more complex medical conditions who need to manage their health" according to an HRI consumer survey. Furthermore, 78% of Healthcare providers recorded a sudden decrease in patient visits while 36% of patients have asked to be treated remotely exclusively.
It is simple to look at these numbers and make broad statements about their implications. The downside of this approach is that these numbers do not explain the underlying triggers or processes linked to customers' behavioral shifts. Plain statistics thus become misleading because without understanding the causes, future actions cannot be predicted and business strategies are built on weak assumptions. Companies need to focus their attention on understanding the emotional and cognitive processes that drive their customers’ behavior.
General economic theory adopts the premise of the "rational consumer" that analyses all the available options and rationally decides the course of action that maximizes his personal outcome. This theory has been debunked several times in the last decades, Ariely and Kahneman being some of the most vocal opponents. They prove that people's behavior is oftentimes irrational and that decision making is riddled with cognitive biases. These biases explain why toilet paper was the most sought-after product globally and why at the beginning of the pandemic, weekly sales of vitamins, minerals, and supplements surged 20%-140%.
We comprised a list of 4 top cognitive biases that influence consumers’ behavior and decisions in the Pharmaceutical industry. Here are the findings:
Common Practice Bias
This bias states that because something is widely accepted and common then it must be automatically true and useful. This plays an important role in explaining why people tend to trust “popular” and “traditional” methods of treating coronavirus instead of waiting for specific scientifically accurate treatments.
It claims that people’s reaction towards information depends on how the information is presented to them. Delivery matters. The internet is full of fake and inaccurate information about every aspect of the coronavirus pandemic. The information people choose to trust is the one that is “framed” in the most persuasive manner. This might explain why people panic-bought COVID-related medication and supplies because the information was presented emotionally and alarmingly. This can also explain the exact opposite where people are swayed by misinformation presented in an apocalyptic and conspirative manner.
This is a quick mental trick your mind naturally uses that makes you rely on immediately available information. That’s to say your opinions and reactions are determined by the most available memories and information you have access to, instead of a more rational and comprehensive approach. Therefore, the latest piece of news gets to disproportionately influence your decision making. That explains people’s herd behavior towards piling up on COVID-19 related drugs, as they are strongly influenced by the alarmist media and political discourse about the threat that coronavirus poses.
The science of trends. People’s likelihood of adopting an idea / behavior / habit strongly depends on the number of people who already exhibit that behavior or habit. Humans are social creatures with a natural tendency to imitate. Social conformity gives us confidence and peace of mind. That explains why social trends tend to exponentially grow in public adoption. We can see this bias firsthand at play, as people accepted the “new normal” of social distancing and wearing a mask when they saw others doing that.
The reverse is that products or behaviors that do not benefit from mass adoption require powerful nudges to shift consumers’ behavior towards them. Tactics built on social proof might prove very useful for any pharmaceutical company that wants to persuade potential customers to buy their products.
So why should you care about cognitive biases? Because the vast majority of our behavior is driven by non-conscious processes and drivers. Our decades of experience in neuroscience and behavioral sciences taught us that the mind is inherently corrupted by cognitive biases and has a natural tendency to create mental shortcuts and automated processes to react quickly to the environment. Therefore, traditional methodologies are unable to capture cognitive biases and non-conscious drivers, because they rely on respondents’ declarative answers.
Only a neuro-powered scientific approach can truly uncover deep insights about the customers' behavior. Most companies were forced to make significant changes in their business approaches and they need reliable insights to be sure that they’re heading in the right direction.
COVID-19 has only made the vulnerabilities of traditional research methods more clear. Buyer Brain's neuroscience approach to Pharma challenges aims to correct those vulnerabilities and uncover valuable, deep insights about customers' emotional and cognitive processes that fuel behavioral changes. Click here to find out more about Buyer Brain's neuroscience business solutions that help Pharma companies maximize demand & customer engagement.
If you want to hear more information live about effective methods to enhance demand engagement in the Pharmaceutical industry we invite you to our Conference on the 19th of November, 10 PM UK Time. Space is limited so reserve your seat following the next link: