Return on Opportunity - Pharmaceutical Executive


Return on Opportunity
Investment in Convention Marketing

Pharmaceutical Executive

What's the Return?

Product and brand managers know that the measurement imperative has never been stronger. With the impact of Sarbanes-Oxley, not only will budgets receive intense scrutiny, but the processes used to find meaningful, relevant methods to determine the impact of marketing initiatives are scrutinized as well. The demand for accountability across all processes is intensifying. Debate ensues as return on investment (ROI) and return on objectives (ROO) proponents both declare themselves winners.

But there is an alternative approach, one that arose out of the technology industry: return on opportunity. Where ROI focuses on costs, return on opportunity focuses on the ability of a new action to grow the top line, to alter the nature of the business or to achieve other goals. As the pharma marketplace rapidly evolves in the next few years, return on opportunity offers a meaningful platform for marketing resource allocation.

In planning for growth, the numbers are not always the best initial indicators. Before the numbers come into play, analysis of marketing opportunities can be an interesting and revealing exercise. Stepping back from the traditional paradigms, brand managers might want to review their investments in marketing initiatives the way any investor would review a portfolio. If the portfolio of investments is solid, there is diversification and synergies in the planned growth. If the portfolio is vulnerable, there is too much risk in a particular area.

What's wrong with ROI? Consider the inherent weakness of the traditional model. To determine a simple return on investment, you take Gains (G) minus Investment Costs (IC) and divide by Investment Costs. The problem with this in pharma marketing is that a specific G is not easily measured for any single initiative or program. The G can be total sales, growth in market share or individual prescribing behavior. Any of these can be linked to total marketing impact or multiple touch points. However, it is very difficult to tie gains to any single initiative. Return on opportunity compares the strengths and weaknesses of different initiatives and yields data that is derived not only from investments but from observable, favorable situations.

Face-to-Face Opportunities

Measuring the return on opportunity is not quantitative but comparative. However, numbers play a key role, and the numbers generated are used to compare one opportunity with other initiatives designed to achieve similar goals.

Before any comparative measurement can be made, groundwork has to be laid:

Define the goal/objective Before measuring any kind of return, it is necessary to know what is being measured and why. Measurement could include prescription volume change, shift in market share, or physician preferences. All of these are measurable.

Define the best methods to achieve the goal or objective.

Know the cost of other methods.

To measure the return on opportunity for conventions, first obtain preliminary data. The sales organization should be able to supply company-specific numbers—the average cost per contact, the detailing order, and the average length of the contact. This data should be compared with data from outside agencies, such as Health Marketing Systems, and various convention services, such as the Center for Exhibition Industry Research (CEIR), HCEA, and similar agencies.

Once the data is obtained, avenues used to achieve the convention opportunity need to be reviewed—and the cost of each of these options has to be compared, first with one another, and then with convention spending. This comparison will indicate the relative cost associated with achieving goals.

Reviewing the total cost of attending the convention and dividing that by the number of targeted details achieved will yield cost per contact. Compare this to what the same opportunity would cost you in the field, and you will almost always be surprised by the total savings of the convention over the field detail. This certainly does not eliminate the need for a sales force, but it shows the effectiveness of a well-planned and -executed convention program, and helps with allocation of resources.

In measuring and analyzing data, it is important to remember some basic tips:

Understand the objectives In the case of conventions, the objective is for doctors and reps to have face-to-face contact.

Know the key message you wish to be communicated when the contact takes place. It should be the same message that the reps would use in office detail situations.


blog comments powered by Disqus

Source: Pharmaceutical Executive,
Click here