By Baba Awopetu, DipM MCIM Product Manager - SFE, IMS Health
The impact of an effective customer targeting strategy should not be lost on representatives, since they are the ones that have to implement it. In the current competitive climate the drive for sales forces to improve efficiency and effectiveness is increasing, as pharmaceutical organisations try to compensate for the recent slowdown in R&D productivity. ONE OF THE AREAS that are most commonly focussed on to improve sales force effectiveness (SFE) is customer targeting. This is one of the key points in the pharma strategy rhetoric – “right customer, right message, right frequency, right channels”. Every Sales and Marketing Manager wants to focus his or her efforts on the right customers, though the definition of the right customer can differ somewhat. Profiling, segmenting and targeting the right groups of customers effectively is a prime source of competitive advantage.
Differences in customer value
Most representatives readily accept the fact that all customers are not all equal. It is the differences in attitude and behaviour of customers that forms the building block for any approach to targeting. The challenge, then, is to identify these differences and prioritise customers based on empirical evidence. It is apparent that the environment the representative operates within is increasingly competitive, with GPs having limited amount of time to spare the large army of representatives.
The majority of the philosophies that under-pin targeting was inspired by Pareto’s 80:20 rule. In essence the Pareto principle suggests that a small group of customers are responsible for the majority of an organisation’s sales i.e. 20% of GPs prescribe 50% of scripts within the respiratory market, (this figure will differ depending on therapeutic area). Therefore, it is prudent to identify these important few and concentrate on them, because this will support the desire for improved return on investment. However this approach ignores the propensity of the customer to prescribe, as well as the environmental factors influencing the customer’s behaviour. This propensity element of the targeting mix endeavours to enable the organisation to maximise their ability to tap into the identified potential.
Given that there is a consensus on the need to target, the challenge then is identifying the best options to maximise sales. Sales and Marketing Managers will choose an approach that compliments their strategy. This will usually include:
- Potential – opportunities to prescribe (Volume) or influence prescribing
- Propensity – attitude towards organisations proposition, environment or therapy area
- Predisposition – impact of influences from stakeholders (Hospital, PCO & Practice)
The differences in the potential of customers can be identified by analysing granular data based on individual prescriber data, although the identified potential may not be accessible if the doctor does not initiate or if the PCO has a formulary that precludes the use of your product. In contrast the propensity measurement uncovers underlying attitudes and beliefs that give a clearer idea of the organisation to realise identified potential. In light of the ongoing modernisation of the NHS, we have witnessed the development of complex influence networks, with a range of stake holders including hospitals, PCOs and patients. The influence exerted by these stakeholders varies by therapy area and geography, hence the growing need to incorporate this into the final customer strategy. Therefore the ideal target customer has great potential to prescribe your brand, has a positive attitude towards your brand and is positively influenced by other stakeholders to use your brand. Customers with this unique blend are few and far between, most are somewhere in the middle on these parameters, which makes differentiating between them with the naked eye impracticable. Independent or interdependent
There are representatives that believe that they are able to compile lists of customers that will maximise sales on their territory better than any head office generated list. However, in our experience we have found this not the case. The example in Fig 1 illustrates the additional scripts the representative can access by focussing on the target group rather than a self generated list. It would be a mistake to presume this is underplaying the important role that representatives play in the customer targeting process. It is imperative that the representative can make adjustments and have an input into the targets for their territory; otherwise critical local knowledge, which can be a source of competitive advantage, will be missed. Nonetheless, changes and adjustments made in order to enhance the results generated from the evidence based process should be limited. This is important because sometimes there
are so many changes made to a target list that it looses its empirical origin. Some representatives perceive the customer targeting process to be a necessary evil that disrupts their activities. However, studies by IMS point to the fact that left to their own devices representatives do not discriminate between customers, thereby missing opportunities to improve effectiveness (Fig 2). Others find the on-going changes to the target customer groups burdensome. It is important to appreciate the need for regular changes and make updates to reflect strategic choice and the impact of the ever changing environment. Customer targeting is an iterative process that needs regular updates to avoid strategic drift. One of the most commonly asked questions by representatives is what’s in it for me? (W11fm) The answer is wide ranging and as fig 1 demonstrates, it includes access to customers with greater potential to prescribe that is authenticated by empirical evidence. The result is improved bonus earning capacity and better customer relationship because propositions are developed by the marketeers with the target audience in mind. The rep rules
The importance of getting representatives buy-in cannot be underestimated as customer strategy is nothing without the support of the sales force. There is a distinct difference between the representative that calls on a target group of customers that he/she buys into, as opposed to a situation where the representative calls on the customer only to stay on the right side of incentive schemes. It is important that representatives realise that their local knowledge and relationships are relevant and pertinent addition to the targeting process. The critical point is how these territory idiosyncrasies are integrated. As the role of the representative evolves to mirror the environment, organisations are adapting their customer targeting strategies accordingly. An increasing number of companies are addressing different groups of GPs with differential messages tailored to meet their specific requirements. This is made possible by the improving granularity and breadth of data that is available for target group identification and evaluation. It is vital that targets are checked against accessibility although this should not differ from the quality of target customers; instead it should inspire innovative methods of accessing them. Effective targeting is central to any customer centric strategy; therefore the migration of focus from quantity to a quality based approach of identifying customers is welcomed. In addition the utilisation of new channels to reach customers as a means of enhancing the efforts of the representative will improve the process. Despite the growing sophistication employed for customer targeting, the success or failure of the process still lies firmly on the shoulder of the representative.