by Gareth Thomas, Managing Director, Cegedim UK
In the fast-changing NHS environment, are pharmaceutical companies using the new cost/value model for their sales and marketing investment? Gareth Thomas asks whether the ROI has gone into exile.
TO KEEP UP with the changing NHS market requires a well-integrated strategy built on accurate information. The increasing cost of sale and the decreasing rate of product switching are creating a new cost model for pharma companies. The initial sale is becoming ever more critical – but how many companies are proactively measuring the impact of new sales and marketing activities?
Without good account-level measurement that reflects the new multichannel model, pharma companies will struggle to achieve a satisfactory return on investment (ROI). Rapid performance monitoring is the key to prioritising expenditure, assessing the impact of new strategies and determining ongoing investment. A well-informed sales strategy will guide the sales force towards success.
Building new relationships
Life was so simple before the recent NHS changes. GPs, in the main, saw representatives. Optimal call frequency was proven to optimise prescription rates. And switching trends could be easily remedied by increasing the call rate.
Those days are long gone. In the new NHS, the sales process is changing fundamentally. The face-to-face GP detail is increasingly being replaced by group ‘lunch and learn’ sessions. Making a sale, today, is less about providing evidence of drug efficacy and safety or comparing drug costs, and far more about building long-standing relationships.
With practices and commissioning groups looking for support in improving their QOF scores and meeting key Government targets, the pharma company needs to invest heavily in these new relationships. Increasingly, the emphasis is on building projects to co-fund nurses or trials, and enabling account representatives to work with practices, commissioning groups and PCTs to improve their understanding of patient needs in order to support specific Government initiatives.
The result is a cost of sale that far exceeds the traditional detailing model. Indeed, according to figures from Cegedim, companies are now spending three times as much on meetings per quarter as they previously spent on details. Furthermore, practices now have predetermined prescribing guidelines (often within a PBC group) that will only be broken if a patient experiences side-effects or is taking a specific combination therapy.
And once a sale has been made, encouraging switching will become increasingly difficult. Therefore, as the incidence of switching drops, achieving that initial sale is increasingly important.
In a competitive environment with increasing pressure on prices, maximising the sales investment is becoming ever more critical. And as the cost per interaction increases, failure to get the right message to the right audience will become more and more damaging.
To ensure effective sales and marketing in this new environment, pharma companies need to deliver differential messaging, create targeted campaigns and provide relevant support to each practice and commissioning group.
|HOW THE MEDICAL SALES FORCE CAN HELP THEIR MANAGER TO MEET THE CHALLENGES OF THE NEW NHS PURCHASING ENVIRONMENT
|1. Exploiting information. To create targeted campaigns and provide relevant support to each practice and commissioning group, a far greater understanding of the background and local demographics of each practice is required. Representatives must have access to the local health economy and be able to see what is happening within practices and why.
2. Using milestones to measure the success of different sales methods, discovering what works best for individual practices and delivers a quantifiable return on investment (ROI).
3. Improving account management skills. Representatives need to develop their skills beyond one-to-one communication. As messaging comes to depend more frequently on addressing many individuals at large meetings, representatives need to improve their public speaking and presentation skills as well as providing support in accessing and securing relevant Opinion Leaders.
4. These changes also affect the marketing team. Rather than providing a single, consistent product message, marketing needs to be able to work with the sales force on modifying the message to reflect the issues and needs of each specific customer group.
To achieve this requires far greater understanding of the background, history, relationships and local demographics of each practice. Furthermore, it is essential to measure the effectiveness of the differential messaging to ensure that marketing spend delivers quantifiable ROI. Without a good understanding of performance in this new environment, organisations risk wasting both time and money on poorly-directed sales efforts. Yet, while companies are increasingly evolving towards this differential messaging model, just how many have the right measurements in place to allow continual refinement and improvement?
With an increasing cost of sale, prioritising activity has never been more critical. Why spend money on lunches, paying speakers and creating tailored material if a practice does not have high potential, and so there is little chance of achieving any ROI in the short or the long term?
Obviously representatives need to be provided with information that allows accurate and up-to-date account profiling at practice, commissioning group or PCT level. Combining local demographic information with information on targets, prescribing practice and adherence to PCT guidelines enables representatives to profile, segment and target accounts effectively.
It is also critical for the company to have excellent account-level performance monitoring to track the success of representative activity and assess the impact of specific marketing strategies (such as co-funding nurses).
This requires a fundamental shift from traditional national or regional performance measurement to a far more granular, account-based metric. Indeed, traditional field force measures of coverage, frequency and territory sales are no longer relevant. Pharma companies need to look at measuring behaviour and tracking where money is being spent across multiple channels. The measure is now one of quality, not quantity.
And the measurements are no longer straightforward. The issue now is not just the number of leads, but the impact on decisions. Rather than measuring representatives’ performance on sales, companies are evolving towards a market share model: they are opting to measure demand rather than value, taking into account issues such as discounting within the supply chain.
The bigger picture
As the complexity of the sales model grows, companies need to measure interactions across multiple channels and teams – all of whom can influence prescribing outcomes. With an increase in combined primary and secondary care ‘lunch and learns’ and the interaction of diverse Key Opinion Leaders, companies will increasingly need to pull cross-territory information together to achieve a complete picture of the sales process.
There is also a trend towards sharing budgets between account management teams as similar groups or individuals are brought together for specific events. As a result, detailed costing and performance measurement will be essential both to track ROI and to allow reliable representative or account manager assessments.
The latter measure will be critical over the next 12–18 months, as pharma companies evolve the field force from representatives to account managers. Tracking performance in real time will allow targeted training and provide a clear indication of the underlying skills required to make a successful transition. It will also be important to measure performance against defined account milestones, such as the creation of co-funded projects or a practice’s performance against Government targets. This will provide real insight into the effectiveness of the differential messages to specific target groups, enabling rapid refinement of strategy and message to maximise the sales investment and ensure that money is spent in the areas of most potential.
In fact, there has never been a greater need for granular information that will allow better decisions, measure performance and ensure ROI. Whether it is carried out internally or via a third party, the availability and analysis of detailed information at practice, commissioning and PCT level will increasingly underpin the effective delivery of differential messaging that will drive ROI.
|Cegedim is the European leader in the production, use and distribution of data and services linked to medical information and CRM activities. For more information, contact Cegedim UK at www.cegedim.co.uk