Sewing Up New Sales
If you look at pharmaceutical companies' traditional sales and marketing practices, you might think that all customers are identical. Why else would they treat all physicians nearly the same? In fact, there are many important differences between prescribers, even within the same specialty in the same town. Some are early adopters of new drugs and technology. Others take longer to be convinced. Many physicians are active participants in the sales process: They speak at peer-to-peer functions and lecture about the diseases they know well. Other doctors don't even like to see sales reps.
So can pharma design an approach to fit all of its customers? Probably not. And based on sales practices in other industries—where "one-size-fits-all" approaches have given way to tailored, more flexible sales and marketing models—pharmaceutical companies probably need to step away from traditional "reach and frequency" methods. More than high-call frequency will be necessary to succeed in an increasingly competitive sales environment.
Strong prescriber relationships will be a key source of competitive advantage in the years ahead. To build these relationships, companies should rethink prescriber requirements to tailor their sales approach to the disparate needs and attitudes of physicians.
But first, companies need to look for ways to meet needs that otherwise different groups of prescribers have in common. These prescriber interactions, which typically include simple transactions like providing product samples, sharing basic product information, and e-detailing, present opportunities for standardization. Centralized, cost-effective, and consistent delivery of these basic services should be a core function of sales and marketing—it is the "lean backbone" of a marketing strategy.
To develop such a multi-tiered marketing strategy, pharma companies need to take certain steps:
IDENTIFY PRESCRIBER SEGMENTS Physicians need much more than information from pharmaceutical companies and their reps. Thought leaders within a therapeutic
category, for example, might want to get involved in clinical trials, speak at peer-to-peer events, and get help determining
which patients would benefit most from a product. In general we distinguish four types of primary care physicians:
CREATE A STANDARDIZED, LOW-COST BACKBONE The "lean backbone" comprises the set of sales and marketing activities that a pharma company has to perform across its entire
product portfolio, which can be standardized and streamlined. This represents the bare minimum of service that the company
would provide to prescribers, primarily information and "self-serve" transactions. These might include:
DEVELOP "HIGH-TOUCH OVERLAYS" for delivering tailored messages to prescribers who value higher levels of sales and service support, and have prescribing
potential that's high enough to cover the cost. "High-touch" services include:
In December 2005, The Pink Sheet reported that Eli Lilly is using "portfolio specialist" reps to engage with "no-access institutions"—those that refuse to see standard reps. John Lechleiter, Lilly's COO, said, "Portfolio specialists are single points of contact for these customers, providing product and disease-state knowledge, samples, and referrals to outside expertise." According to Lechleiter, portfolio specialists are helping Lilly get "back in the door."
Financial services company Charles Schwab & Co. does a superb job of segmenting and providing high-touch services. Frontline retail staffers are trained to categorize customers by segment. The company guides them to the appropriate channels. Everyone has access to the backbone of services, which includes easy-to-use online access to accounts. More sophisticated investors get access to more information, while the most affluent get personal attention from independent advisors.
Similarly, Dell was among the first companies in the computer industry to recognize wide variations in what customers want from marketing, from simple transactions to in-depth consultative services.
Our research has shown similar—and growing—variations in what physicians want from pharma sales reps, but many pharma companies have yet to adjust their marketing "touches" accordingly.
Better Product Launches
The benefits of the model are likely to be magnified for growth products early in their lifecycles, when effective promotion will have the greatest impact in shaping long-term physician perceptions and prescribing behavior. And high-touch overlays play a crucial role in launches, primarily to help the product message reach early adopters and key opinion leaders. A high-level blitz of touches is vital in the critical six-month period after launch, when physician perceptions are established and the eventual peak uptake of the product is determined.
Developing a winning physician-interaction model isn't easy. Any change to the existing approach is a bold step, particularly for companies anticipating imminent product launches or promoting recently launched growth products.
The physician-interaction model for each company should be optimized for a given product and customer mix. Small-scale pilots, run before a national rollout, should test and refine key implementation and sequencing considerations, such as segmenting customers based on interaction needs, building the lean backbone and necessary skills for high-touch overlays and tailored messages.
Recent technological advances make it possible to measure prescriber behaviors in real time. Traditional measures, such as TRx/NRx (total vs. new prescriptions), can now be combined with "point-of-prescribing" data and physician feedback on detail execution. Metrics include office access relative to competitors, message believability, visual-aid usage, and intent to prescribe. These measures can help control "external" influences, including geographical differences in managed care status, and inform adjustments to the prescriber-interaction model.
Next Generation Sales Metrics
Mobile hand-held technology has changed the game. Using hand-held data-collection tools supplied by pharma, physicians can report on all promotional activity. By equipping physicians with PDAs or smart phones, pharma companies can economically track a significantly greater percentage of sales-rep office visits—and measure the impact on physician behavior in real time, including office-based (written) prescription sales.
Sales-force performance models based on rep-reported data are missing a key ingredient for analysis: the role played by competitive details in changing physician behavior. Data collected from physician customers via an "always-on" PDA system provides sales managers with feedback they can confidently compare with industry and competitive benchmarks.
For years, sales force performance was measured by comparing performance of one company with another—often on an annual basis.
The most sophisticated sales teams are now using detail execution and sales rep quality metrics to:
Integrating metrics across promotional channels can allow a company to optimize the marketing mix. When using lean backbone and high-touch overlays, companies must measure not only the ROI of each promotional channel, but also the interaction between channels.
For example, instead of measuring the ROI of e-detailing alone, the new metrics can allow a company to understand how e-detailing might change the impact of other activities, such as sales-force detailing. Best-in-class firms will customize integrated metrics for each physician segment so that they can optimize the marketing mix at the segment level.
Sales and brand managers should pay special attention to the share of patients who are newly diagnosed and switching for the first time ("written Rx"), since this is the "dynamic" market segment most subject to promotion. Written Rx is the purest measure of promotional effectiveness, since it occurs before formularies and patient behaviors erode the number of prescriptions. Comparing written Rx with pharmacy-dispensed Rx (NRx) can reveal how much "leakage" is occurring outside the doctor's office.
Focusing on a brand's share of the dynamic market quickly generates the feedback needed to adjust tactics in a fast-paced
marketplace. Using the new written Rx as the dependent variable enables teams to identify what's working and what's not, including:
New customer-driven sales metrics are connecting previously siloed parts of pharma organizations. Sales, marketing, and managed
care groups are collaborating based on a common data set. The three groups can compare notes on marketplace, company, and
competitor performance, since new data make discussions with their counterparts fruitful; they can hold each other accountable.
Here's how this would work:
A new sales model requires companies to adapt to the needs of different physician segments. The learning curve associated with the model is steep. A multiyear rollout that tracks progress with appropriate sales metrics may work better than an abrupt, one-time change in the commercial model. Even so, incumbents may find the transition to the new model difficult, since the marketplace has changed and the players must take risks and adapt or pay the consequences. For those companies that succeed, however, the payoff is great.
David Stievater is VP, business development, for ImpactRx. Alexander Petersen is associate principal and Rahul Bhatia is engagement manager for McKinsey & Co.
How Digital Medicine Can Pinpoint Dosing Regimens to Optimize Drug Efficacy and Safety