How to concentrate sales efforts in the right place

Right place, right time

In part two of a series looking at the effective use of data, Dr Graham Leask addresses how to concentrate sales efforts in the right place.

In the previous article ‘Seize the Data’ I discussed some of the important strategic aspects to consider when working with data to improve your sales. Here the focus is on where to apply effort for the greatest impact and what information can be utilised to do that more effectively.

George Orwell states in Animal Farm that “All animals are equal, but some animals are more equal than others”. In theory, all territories may have equal potential, but the difference between potential and realisable potential can be stark. These differences may be due to either failing to take account of different sets of structural barriers or failing to target effectively.

Barriers

In terms of structural barriers, visualise each of your health authorities (HAs) as a ‘walled city’. Like York, where – in medieval times – such walls served to repel invaders. A similar concept can be applied to HAs. In this instance, the height of the wall represents a barrier to entry which, in some simple cases, may simply mean trying to gain admission to a formulary. In contrast, the barriers in some HAs may be a great deal more complex and difficult to traverse.

These may consist of meeting a few explicit requirements through a range of less visible challenges that require advanced networking and information-gathering skills to understand – let alone breach.

Ultimately, the entry requirements for a given HA may differ markedly from those of an adjacent HA, however, through careful application of statistics we can group these into meaningful practical categories. The second point is that where barriers are low it is easy for competition to enter.

Market shares, therefore, are less stable and switching costs are lower, as practices using the products have more choice. In contrast, where barriers are higher, companies promoting new products find the HA more difficult to enter. Here market shares are more stable and distributed across fewer products; therefore profits are higher.

Action

The difference between actual potential and true realisable potential is the ability of companies to gain access to all potential users, building a strong and stable market share in the process. Access must align with potential – leading us to target it. If we are to gain a good return for our promotional efforts, we must put our efforts where our actions will gain traction. There are four broad options (see Figure 1).

Control

The management activities of the HA are also important. For example, some HAs place greater emphasis on guidelines and NICE guidance than others. The attitude of the HA to ensuring that their practices and hospital departments follow the ‘party line’ is also important.

This dynamic is reflected in terms of the degree of control that the HA exerts over its constituent GP practices or hospitals. If the degree of control is low, then individual practices have greater freedom to make choices and visa-versa.

Research carried out at Aston and Cranfield Universities suggests that HAs can generally be grouped successfully into four main types based on the two dimensions – HA control and the practice’s willingness to prescribe new products. It should be noted that these considerations hold where the HA, rather than NHS England, is responsible.

These four scenarios are:

1. High entry barrier HAs where practices tend to act as directed and the appetite to adopt new products is low.

2. Low entry barrier HAs where practices have more freedom to act, but current appetite to use recent products is relatively low.

3. High entry barrier HAs where practices are positively disposed to new products, but choose from a limited ‘choice set’.

4. Low entry barrier HAs where practices enjoy freedom to act and where willingness to adopt new products is relatively high.

We are all familiar with Roger Everett’s diffusion model, and using this together with the above classification yields four different strategies to follow, depending upon the degree of control exerted by the HA, the willingness of individual practices or hospital departments to adopt new products and the current stage of the product life cycle.

Keep it simple

Given that time and resources are limited the key is to follow a simple guide.

1. Make decisions based on robust quality analysis.

2. Class individual HAs by meaningful behaviour differences supported by sound theory.

3. Choose optimal resource deployment based on the effort payoff balance.

4. At a local level, target designated individual practices within nominated HAs.

5. Finally, remember to consider the environment when targeting. Consider both the environment and the behavior exhibited by the practice, hospital or Health Authority.

Dr Graham Leask is a consultant and writer on the pharma and healthcare industries. He spent 15 years as a member of the faculty of the Economics and Strategy Group, Aston University. To comment on the article, write to grahamleask5@gmail.com