Better-Faster-Cheaper: The New Normal

Four operating principles of the new sharing economy

Two out of three ain’t bad.” That’s what we have always been told. But if my experience with new economy companies is any indication, that’s old school thinking. Companies like Airbnb, Uber, WeWork and Task Rabbit are better, faster and cheaper. Here are four operating principles that drive this triple threat business model.

1.  Investing in Customers-WeWork: Extrovertic recently shed our 5,000 square foot space and moved into WeWork Soho West. WeWork continually invests in its customer success by publicizing member businesses, teaching critical entrepreneurial skills and negotiating reduced rates for fundamental services.

WeWork Labs

For extrovertic, this community opens up a wealth of talent pool from the emerging health technology and communication companies.  For example, there are 19 video producers in our location alone.  And I bet they do it better-faster-cheaper than traditional sources.

2.  Continual Improvement-Task Rabbit: I hired a Task Rabbit in February to replicate my grandmother’s recipe box for my two cousins. As someone who was asked by her mother not to show her younger sister how to cut and paste, I knew the job was beyond my skillset.

The Task Rabbit procurement process was a little involved, but worth it. Fast forward a couple of months, Task Rabbit has completely changed their business model based on the extensive data they have collected on their Task Rabbits and clients. Task Rabbit simplified both the pricing and hiring process. Lesson: for businesses wanting to offer better-cheaper-faster, there is no set-it-and-forget-it mode.

3.  Mutual accountability-Airbnb: A key factor in Airbnb’s success is because it is designed to provide excellent experiences for both the host and guest. And as countless business studies will tell you, happy employees result in happy customers.

At Airbnb, the hosts and guests rate each other so responsible behavior is reinforced on both sides. If a guest complains or mentions an issue, hosts are empowered to tell their side of the story, apologize or in some instances refute the claim. Moral of the story, if you want better employees, give them a voice.  

4.  Mobile from Day OneUber: One of the best things about Uber is its mobile interface. It is so easy to order and pay for a car. Even my 88-year old mother ubers everywhere.  Design experts will tell you that you get a different result if the design process moves mobile to desktop. It is easier to improve and enlarge than edit and shrink (a progressive enhancement versus graceful degradation issue of sorts). And one-third of mobile web users indicate that they go online mostly using their phones. Lesson: mobile has to be the starting point.

Using companies like Uber, Airbnb, WeWorks and Task Rabbit saves money. Extrovertic is a big Uber fan. However, the larger lesson is to alter your business model to provide the triple threat benefits: better-faster-cheaper. The more customers experience to better-faster-cheaper from the Ubers of the world, the more they will expect it from all businesses. And healthcare will be no exception.

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Beyond the C-Suite: 3 ways to build customer focus

One of the most encouraging signs of progress in Pharma is the addition of C-suite level Customer or Patient Officers. While the impact of this new position remains to be seen, making a change at the top is a good start (see blog post, “Chief Customer Officers: Fancy New Title or Path to Meaningful Change”).


But it may take some time for C-Suite initiatives to trickle down. Meanwhile, what can be done at the brand level? Here are three ways to jumpstart customer focus on your brand:

1.  Create unified view of all customer feedback and interactions: Outside of Pharma, this practice is known as “capturing the voice of the customer.” Marketers go outside their functional silo and collect information from any department that has customer contact. In pharmaceuticals, this should include digging into Adverse Event Reports, long the providence of the Safety and Medical departments. A unified view of the customer is created by collecting the following information in one place:

  • Incoming customer contacts. For added texture, your call center can enable you to periodically listen in on calls
  • Survey information. Does anyone beyond the brand manager responsible for CRM see the CRM survey responses?
  • Social networks and community conversations.  Are your social listening exercises widely distributed and meaningfully communicated?

Once the information has been sourced, there are many companies that can help you automate the data collection for a real time view of your customer interactions.

2.  Interact with customers every chance you get: Vertex was particularly good at this. They did everything from regularly having patients visit their office for small group meetings to spending full-blown research weekends with patients. It is one thing to read that your patients have trouble with basic life-skills and another to get a panicked call from the patient at 7 am because she is worried about her hotel bill.

3.  Change your metrics to reward customer centricity. The time has come for the pharma industry to adopt the net promoter score, which measures the degree to which customers would recommend your brand to a friend or a colleague. Extensive research across industries demonstrates that as the net promoter score goes up, so do sales and margin growth. Changing metrics will change behavior. Marketers will be incentivized and rewarded for solving customer problems rather than producing pretty PowerPoint presentations. Right now, Marketers serving the needs of internal customers, like the Field Force, get more recognition than those meeting external customer needs.

Customer focus isn’t intuitive for pharmaceutical companies. Many brand managers aren’t even allowed to attend customer research in person any more. While all the rest of health care is focused on getting closer to the customer, it often seems that Pharma does everything they can to separate their marketers from their customers. That has to change at all levels from the C-Suite to the brand manager.

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Chief Customer Officers: Fancy new title or path to meaningful change?

Now that health reform seems here to stay, pharma companies are racing to get on the customer focus bandwagon with new Chief Customer Officer (CCO) positions. The most recent example is Sanofi’s new Chief Patient Officer position, which is promoted as  “a First for a Top 10 Biopharmaceutical Company.” This announcement follows Intarcia’s creation of a Chief Customer Experience and Outcomes officer, publicized as “an officer level position for which there is no precedent or analogue in the Bio-Pharma industry.”  Companies are stumbling over each other to be seen as the most customer focused pharmaceutical company.

Image by Bill McChesney

What remains to be seen is whether these CCO positions actually alter the practice of pharmaceutical marketing. How many times in the past have pharmaceutical companies announced progressive new initiatives only to have the ideas wither on the vine from lack of resources and insufficient political clout? Think of the multicultural marketing plans gathering dust in bookcases all across Pharmaland.

It will be interesting to follow Sanofi and Intarcia as the two companies embark upon their customer centric journey. While both companies operate in the diabetes space, they couldn’t be more different. Intarcia is an emerging biopharma company with a novel diabetes treatment/technology in Phase III. Sanofi is a pharmaceutical giant with a full portfolio of diabetes medications and devices.

Business history would suggest that Sanofi has the steeper climb to meaningful transformation. Corporate culture has proven to be an innovation killer across industries. Take for example, the News industry. Online journalism has flourished in independent start-ups but proved to be an uphill battle in established organizations like the New York Times and Washington Post. According to former Washington Post journalist, Ezra Klein, the reason is in part due to an entrenched “culture of journalism,” centered around the print product (see recent New York Times article Vox Takes Melding of Journalism and Technology to a New Level ).

Similarly, pharmaceutical companies have deeply rooted cultures in direct sales to physicians. This direct sales culture explains why “non-personal promotion” took so long to take hold despite the explosion of no-see doctors. Much like the newer media companies who designed their news organizations around the Internet, new pharmaceutical companies like Intarcia have the opportunity to build an organization from the ground up around a patient focus.

But even emerging companies need to be vigilant against importing internally focused sales cultures into their organization. Witness Vertex pharmaceuticals. Despite an early focus on developing an innovative commercial model, the traditional sales force culture managed to marginalize many of the newer, patient focused initiatives. The Antidote by Barry Werth, which chronicles the Vertex INCIVEK launch, is a good read about stymied efforts to create a new kind of pharmaceutical company.

As large pharmaceutical companies go, Sanofi has embraced change, altering how it organizes its R&D (see extrovertic blog post “Four Lessons in Change from Inside the R&D Organization), rapidly adjusting the pricing of its medications in the face of market outrage and its adventurous approach to social media. So I wouldn’t count them out in the race to be the most patient/customer focused diabetes company. What remains to be seen is if the practice of either company changes enough to make a meaningful difference in patient lives, at a reasonable cost.

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Scrap the core vis-aid, it’s a patient-payer world

This is the twelfth and final blog post in a twelve part series that transforms ideas from the marketing world at large into practical plans for pharmaceutical marketing in the time of health care reform.

There’s a strong patient and payer bent to the topics I chose for this blog series. That’s because I believe we are coming to the end of physician marketing, as we know it.

From now on, it’s going to be a patient-payer world.

There will of course be communication to physicians. But rather than providing 20 glossy pages parsing minute differences between drugs, I believe promotional efforts will increasingly revolve around improving the patient experience, outcomes and costs. And payers, not physicians, will be the primary arbiters of what constitutes acceptable results at a good price.

In the future state, there will be virtually no “work around” solutions for products that don’t have a real value story.

And I am not alone in my views. At a Marcus Evans conference I attended,

Kurt Graves, CEO Intarcia, said the decision to launch a product now comes down to one question, “Is there enough value in this product for payers to pay for it.”

Physician marketing will also have to change, according to Steven Pal, Corporate Vice President, Global Strategic Marketing at Allergan. In his Marcus Evans talk, gone says Pal, are the days of the large mass-market field force. Instead, companies need to deploy, “smaller, more agile sales forces that are more attuned to customer needs.”

Patients will be at the forefront of any value equation in the future. In fact, according to Ben Haywood, co-founder of PatientsLikeMe, it will be patient value that defines market value, His company is helping industry incorporate relevant patient reported outcomes (PRO’s) into their drug development efforts.

Patients are finally getting the information they need to assess the price/value equation for the healthcare services they consume.  The Health and Human Services Secretary release of the irrationally variable costs for common in-hospital procedures was a first good step. Across the country, the public’s eyes have been opened to the need to price shop, given the wide variability, even within the same city.

And quality of services, long held to be outside the ability of most patients to evaluate, is more readily available and digestible. For example, in Minnesota, patients can compare how individual clinics fare in helping patients meet their diabetes management goals.

Pharmaceutical marketing in the future will need a radically different game plan, one that is decidedly patient and payer oriented. Healthcare is evolving as we speak. Substantial change will happen regardless of how the Affordable Care Act, popularly known as “Obamacare,” is implemented. The outsized and often irrational costs of our current system have brought us to the place where the status quo is no longer possible.

As the popular saying goes, “People don’t change when they see the light, they change when they feel the heat.”   Pharmaceutical marketers are now feeling the heat with shrinking budgets and sales forecasts. My intention with this blog series is to provide a little “light at the end of the tunnel” by demonstrating how others have addressed similar problems. Extro-analogs aren’t brain surgery. All you have to do is use the 3 e’s:

  • explore industries beyond pharmaceuticals
  • extrapolate the core idea, eliminating the excuse of regulatory limitations
  • export the idea in a “pharma-safe” way into your marketing

I hope this blog series is helpful in sparking some new ideas and thinking. Let me know! Love to hear your comments. 

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R&D: 4 lessons in change from inside the R&D organization

This is the eleventh blog post in a twelve part series that transforms ideas from the marketing world at large into practical plans for pharmaceutical marketing in the time of health care reform.

Change in Pharma is possible.

To become a believer, you only need to explore what is happening in R&D organizations across the country. After the lost decade of drug development where too much money was chasing too few good opportunities, big pharma R&D has shaken up drug development. Gone are the large evergreen budgets. Gone is the stovepipe R&D organization that operated independently of any commercial considerations.

In May of this year, I attended Convergence East, the Life Sciences Leaders Forum held on in Cape Cod, Massachusetts where, extrovertic, was a sponsor. A good portion of the attendees were from the big pharma R&D organizations, including Astra Zeneca, J&J, Millenium and Sanofi to name a few.

Big pharma R&D is using four key strategies to bolster their R&D productivity:

  1. Looking outside for solutions: No more navel gazing for pharma R&D. When asked about what percentage of their drug development efforts were external versus internal, the answer ranged from 30-50%.  To paraphrase a representative from Shire R&D, “the NIH mentality is not going to cut it anymore, too much money and personnel.”
    • This external focus also involves importing leadership that infuses a more entrepreneurial spirit into their organization. For example, Sanofi has hired  biotech executives like Katherine Bowdish, Vice President, R&D on board. Prior to Sanofi, Ms. Bowdish worked at companies like Permeaon Biologics and Alexion Pharmaceuticals, successful biotech companies.
  2. Convening diverse perspectives. J&J has set up four innovation centers around the world designed to create relationships in integrated communities of academics, research institutions, early stage biotechs, venture capital and entrepreneurs. The remit of these innovation centers spans J&J’s three business units: pharmaceutical, consumer and devices. The goal is for J&J to become the partner of choice when there is an opportunity to be commercialized.
  3. Investing further upstream: Sanofi is investing in early stage high-risk opportunities that can use Sanofi assets in the process. One of Sanofi’s earliest success stories their partnership with a prominent Harvard professor, Dr. Gregory Verdine, to create Warpdrive bio. Warpdrivebio has a proprietary “genomic search engine” to identify “powerful drugs that are now hidden within microbes.”
  4. Customer focused development: Drug development is no longer a purely academic exercise. For example, to better focus its R&D investments, Cubist takes their scientists into operating rooms with their surgeon customers. Deborah Dunsire, CEO Millennium, spoke about innovation as beginning with the patient; about reverse engineering what is wrong with the patient, focusing on the patient’s unmet medical need and determining what solution would make the biggest impact on the patient’s life?

The same laser focus on innovation must make its way to the commercial side of the business. Change in the commercial model needs to occur everywhere—from reorienting the rabid focus on the physician at the expense of payer and patient marketing to creating new definitions of a pharmaceutical “product” offering. Think about patient marketing, do we really need more branded commercials running on the evening news?

The core idea to extrapolate from these R&D reorganizations is to turn to outside institutions, experts and customers to provide a fresh perspective on your business challenges So here are a few thought starters about how to export these R&D strategies and pump more innovation into the commercial model.

  1. Start from the patient. What are the upcoming changes in how patients consume media, search for healthcare information, pay for healthcare and use healthcare products and services? Once you have a “vision of the future state,” you can start to think about potential solutions.
  2. Gather a group of innovative thinkers from outside of Pharma and let them take a whack at some of your biggest issues. Convening thinkers from various disciplines is a time honored innovation strategy. In fact, I have been invited to participate in an effort to develop new approaches for eradicating polio by a multinational non-profit health organization. This organization is bringing together a group of thinkers from a variety of disciplines and industries to provide a fresh perspective on an intractable health care problem.  
  3. Create a portfolio of early opportunities. Allocate a portion of the annual budget to new and evolving technologies. Traditionally, pharma innovation centers tend to have little budget and authority. This has got to stop. Top management has to be actively involved with the change agenda. I have seen too many smart marketers spin their wheels in these innovation centers. Without top management active involvement, innovation just doesn’t happen.

Check back on Tuesday for the twelfth and final post in the twelve part series, “Scrap the core vis-aid, it’s a payer-patient world.” This final post coalesces the arguments for change in the face of health care reform and changing customer expectations.

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5 lessons in reinvention from Encyclopedia Britannica

This is the tenth blog post in a twelve part series that transforms ideas from the marketing world at large into practical plans for pharmaceutical marketing in the time of health care reform.

It’s time to throw the book at the pharma business model.

Actually, not one book, but an entire 32-volume set of Encyclopaedia Britannica.

Exploring how Encyclopedia Britannica blew up a 244 year-old business model sparked some ideas about potential life-saving changes to the pharmaceutical industry. In an article entitled, “Encyclopaedia Britannica’s President on Killing Off a 244-year-old product,” Jorge Cauz, the CEO of Encyclopedia Britannica, tells the tale of how the company evolved from a reference product business into a “full-fledged learning business.”

Reading this article, it struck me that many of the key components of their transition had relevance to the type of reinvention required in the pharma industry. Here are a few of the pertinent concepts worth extrapolating from the Encyclopedia Britannica transformation:

  1. Moving to a digital product. Encyclopedia Britannica announced in 2012 that they would no longer offer the printed version of Encyclopedia Britannica. What Encyclopedia Britannica offers now is a complete online suite of educational support products as well as an online store of DVDs, books, online reference books and software. 
    • Encyclopedia Britannica’s drive to digital was prompted by changing customer preferences. They found that  “families became busier and had less patience for doorstep solicitations.”  Customer’s expectations had also risen regarding the quantity and real-time updates. So Encyclopedia Britannica changed their “editorial metabolism,” to enable updated content several times an hour rather than several times a month.
  2. Shifting focus to a different customer group. Over time, Encyclopaedia Britannica’s core customer group evolved from individual consumers to school systems. Now approximately 85% of their revenues come from online curriculum products.
  3. Switching to a new sales channel: Encyclopaedia Britannica’s most painful transformation was to eliminate the 2,000 person sales force. Instead, Encyclopaedia Britannica employs direct marketing as well as a smaller field force targeting the school administrator market.
  4. Bringing in new skill sets.  As Encyclopaedia Britannica went digital, they found new skill sets were required. They needed a different editorial staff that could convey information using multimedia and interactivity. Encyclopaedia Britannica also required “curriculum specialists for every key department of the company: editorial, product development, and marketing.”
  5. Continuing evolution.  Encyclopaedia Britannica did not stumble upon their magic business formula out of the gate. Encyclopaedia Britannica tried CD-Roms, an online version of Encyclopaedia Britannica, selling subscriptions, free ad-supported consumer encyclopedias and a learning portal before developing their online education business.

So how do we export Encyclopaedia Britannica’s transformation to guide pharma’s increasingly urgent need to reinvent itself? Here are some thought starters:

  1. Recalibrate your customer investment portfolio. Just as your personal financial portfolio needs periodic recalibration to compensate for changing market conditions, so does your promotional portfolio. Calculate or estimate what percentage of your brand’s business is really driven by institutions such as payers and hospital groups versus individual physicians. Are you truly matching your investments to opportunities?
  2. Evaluate your sales channels. If your customer focus is shifting, shouldn’t your sales channels change too? There is no question that pharma has reduced the size of the field forces it employs. The real question for me is whether the industry has been aggressive enough in embracing multi-channel marketing. 
  3. Double your digital. According to a study by Publicis/Razorfish Healthcare, 35% of HCPs feel sales reps should use iPads. Isn’t it time to break the print habit? Develop a strategy to help motivate your marketers and sales people to increase their digital adoption curve!
  4. Assess your workforce. Seems to me that the evolution of pharma into a more patient focused business would require an infusion of new abilities. For example, adding customer service and compliance experts to your staffing model.
  5. Allocate a sacrosanct budget for innovation. Here is where I believe pharma marketing and sales have really missed the boat. In most marketing departments, there is little focus on keeping up to date with customer preferences and technological advances. A more structured approach needs to be taken to a) figuring out what are the most promising communication and service innovations and b) identifying appropriate pilots. 

Check back on Thursday for the eleventh post in the twelve part series, “ 4 lessons in change from inside the R&D organization.” In this post, I explore how the ways R&D organizations are reinventing themselves provides a model for commercial reinvention.

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3 ways to take your marketing to the street

Learning from the retail health movement

This is the ninth blog post in a twelve part series that transforms ideas from the marketing world at large into practical plans for pharmaceutical marketing in the time of health care reform.

Sometimes all you have to do to come up with an innovative idea is to watch what your customers are doing. And increasingly, payers and hospitals are hitting the streets to both sell and deliver services.  Consider the following examples:

  • Western Maryland Health Systems is a hospital system whose goal is to try to keep patients out of the hospital. According to a New York Times article, the hospital has “opened a diabetes clinic, a wound center and a behavioral health clinic all outside the hospital walls. They have hired people to go out into the community for follow up with discharged older, sicker patients. Primary care practices have been added in some neighborhoods.” All of these outside adventures are driving down costs and improving the quality of care.
  • Major payers are experimenting with retail. United Healthcare has sold Medicare plans through “pop-up” retail stores, and at retail community centers. Aetna has a presence in Costco stores. And Florida Blue has 11 retail stores “where people can shop for coverage, ask a question about a claim or see a nurse to check their blood pressure.”
  • Retail drug stores are expanding into medical care at a rapid pace. CVS plans to have 1,000 MinuteClinics by 2016. Duane Reade has doctors practicing out of their New York City Stores. According to a 2009 study by the Rand Corporation, retail clinics are able to offer equivalent care at costs of up to 30% less for three common conditions when compared to physician offices, urgent care centers and emergency departments.

The core idea behind these innovations is enabling easier access to products and services. But with any innovation, risk is involved. It is certainly more secure to offer health services in a hospital prepared for any unlikely emergency. Economic bravery is also involved in renting out space additional space when the current physical space could be more easily utilized. But payers and hospital systems have taken the leap to make their services more convenient to their customers.

What can pharmaceutical marketers do to make their products, services and information more readily available to patients and caregivers? Here are some thought starters for exporting your marketing to the street:

  1. Explore partnership opportunities with health care retailers. Can you partner with a payer to offer services or information in their retail outposts? For example, partnering with Florida Blue on a smoking cessation or diabetes care initiative? Could you offer a “white-labeled” version of your compliance program with an in-person component at MinuteClinic?
  2. Create your own  “pop-up” presence. Using the store within a store concept, could you raise awareness about the need vaccinate against HPV in retailers that cater to teens and 20-somethings? Many stores such as the Lush cosmetic stores have a social activism bent that would lend itself to health promotion. Or if your business has a seasonal aspect to it, you could take over a storefront for a limited time on your own.
  3. Partner with a relevant advocacy group on a retail presence. While visiting the United Kingdom, I was struck by the number of advocacy groups with retail presences, primarily thrift shops such as Arthritis Research UK Shops that dot the English countryside. There is even a Charity Retail Association.  There is so much more than fundraising that can be done in a retail space.

Certainly, some risks would be involved in taking pharmaceutical marketing to the street. Traditional delivery of messaging (print, video, audio etc), is highly controlled. In-person messaging certainly has the potential for more variation. But relating in person has the benefit of more immediacy and convenience for the patient. And making the trade-off to the benefit of the patient is what patient focused marketing is all about.

Check back on Tuesday for the tenth post in the twelve part series5 lessons in reinvention from Encyclopedia Britannica. In this post I explore how the approach this 244-year old company used to transform into a digital educational giant can be applied to shake-up the pharma business model.

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How to write health care copy that people will actually read

Learning from the halls of journalism

This is the seventh blog post in a twelve part series that transforms ideas from the marketing world at large into practical plans for pharmaceutical marketing in the time of health care reform.

Ever wonder why a patient pamphlet doesn’t grab you like the first sentence of a New Yorker health care article? I believe that it boils down to intent. Pharma copy is written from the point of view of “I have important information I need to tell you.”  Journalistic copy starts from the premise of “I need to capture your attention.” 

The goal of a news story is to get eyeballs on words. The goal of a pharma pamphlet is to impart information that the patient may or may not really want to read. Or in the worst case, just fill the legal obligation to provide the information.

I wanted to explore what would happen if by taking more journalistic approach to developing patient education copy. So I gave a journalist friend of mine some pharma copy. In this case, the copy concerned addressing people’s thoughtless comments. I was curious to see the differences in how it would be written, particularly the opening sentences. Even after removing the expletives, you can see how much more engaging the copy written by a journalist is.

And the difference goes beyond the first sentence. Below I have taken a common journalistic framework—Who? What? When? Where? How? Why? — and used it to extrapolate the differences between marketing and journalism.

The journalistic model of copy writing requires a significant shift. At the end of the day, it is about holding your information to a higher standard—patient engagement. Or as Tony Rogers in his Guide to journalism says, “So when making the rounds of your beat, always ask yourself, “How will this affect my readers? Will they care? Should they care?” If the answer is no, chances are the story’s not worth your time.”


The key concept to extrapolate here is the need to interest and entertain your reader. So here are a couple thought-starters on how to export this idea to development of pharmaceutical information, particularly in the patient space.

  1. Define for your agency “what good looks like.” Gather a few examples of how your product and/or disease state has been covered in the popular and not so popular press. I am riveted by anything that Jerome Groopman writes. Look for good examples of science made accessible. Look for health care storylines that grab people. Compare that to your copy.
  2. Evaluate what is most/least compelling on your website. We have tended to discount “the click” in pharma. But “eyeballs on the page” is the metric used by online media evaluate the success of their endeavors and determine what gets covered in the future.
  3. Hire a freelance journalist to have a “whack” at your copy. Your procurement friends will love you as journalists are about half the cost of pharmaceutical copywriters. And many do a very good job at explaining difficult scientific concepts or MOA’s.

So take a look at your copy. Would you read it if you didn’t have to?

Check back next Tuesday for the eighth post in the twelve part series, “ How to Jay-Z DTC. In this post I explore Jay-Z’s three-part formula for grabbing attention to create more cost effective and impactful DTC campaigns.

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