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Sort your sales strategy according to your customers.
Over the past several years, prescribing data has become more readily available, information technology has improved and customer needs have become more varied and complex. This rapidly changing marketplace has forced sales organizations to focus increasingly on higher value customers. This practice is commonly know as targeting.
This article outlines an approach to targeting based on the underlying objective of maximizing territory sales.
Targeting in its traditional form â focusing on the theoretical 20% of customers who provide 80% of business â does help improve sales. However, a more broad perspective of customer value offers greater potential for return.
For example, consider the following two physicians. Dr. Smith is the No. 10 writer of your product, and has a very high market share. Dr. Jones, on the other hand, is currently the No. 20 writer of your product, but has more therapeutic class potential than Dr. Smith. Which of these customers is more "valuable?" What unique needs do they have? Which is the right investment strategy for each? What are the trade-offs associated with selecting between them?
Sustaining performance requires not only bringing in business today, but also identifying and cultivating relationships with physicians who will grow business in the years ahead. Sales reps must assemble portfolios for customers to meet these multiple objectives.
Most territories contain a consistent mix of customers.
Solid customers: The classic 80/20 customers - physicians who provide the bulk of today's business. These doctors know you, they like your products, and they write a lot of prescriptions. Influencers or "thought-leaders" also fall into this category.
Potential converts: High prescribers who don't write a lot of your company's product, but are very active in the therapeutic class.
Prospects: Though these customers are small now, they could be solid customers relatively soon. Examples include the new doctor, or the doctor who just switched plans.
Poor targets: Small or average prescribers who are writing little for your company's product.
Regardless of the size of your territory, there are probably few solid customers in your portfolio, and most of them are already "sold" on your product. It is not always necessary to call on these physicians as frequently as you might expect. You don't have to convince them to change their behavior; just make sure they keep doing what they're doing.
Potential converts, on the other hand, may require significant effort because they are likely another company's solid customers. You have to proactively change the prescribing habits of these customers. A call every two months won't lead to a breakthrough. If you want to change his or her habits, you need to visit as often as three, four or more times per month.
Prospects can be difficult to identify. Examine closely the data available to you. Scan for new physicians, identify major changes in plan data and look for rapid growth from an otherwise unremarkable doctor. If you can be a key influence at a turning point in a physician's career, the long-term value can be tremendous.
Your call strategy should be one of selective investment. First, spend a call or two probing. Then, if the prospect warms to you and you sense that he or she has potential, increase the pace. If you sense that it's a dead end, divest and identify another prospect. You don't have to call on every prospect every month - use a rotation that allows you to see as many customers as possible and develop a solid relationship with each.
A simple test should identify most poor targets in your territory: Assuming a cost to your company of $150 per call, the total dollar value of scripts written by a poor target is less than the value of the time you spend. Customers who have not responded to a sustained, quality calling effort can also be classified as poor targets.
Though you should never write-off a customer forever, the best calling strategy for a poor target is a simple one: Don't.
The final piece of the territory management puzzle is assembling the right portfolio of customers.
Using an earlier example, Dr. Smith can now be categorized as a solid customer, while Dr. Jones is a potential convert. Develop strategies for these customers in light of your business priorities and objectives. If you are losing share in your territory, for example, concentrate on the Dr. Smiths of the world. If you want to emphasize long-term business development, visit Dr. Jones.
Regardless of your situation, some basic rules of thumb apply.
•Â Cover as many of your solid customers as possible.
•Â To achieve breakthroughs with potential converts, select a small group of key targets. For example, if you have 40 or so calls per month to spend on these customers, focus on eight to 10 who can really make a difference.
•Â Use a relatively small percentage of total calls for prospecting.
•Â Identify poor targets early.
•Â Continually monitor and adjust. For example, you may want to re-evaluate your calling strategy for new product launches, or for when your product goes off patent.
Because every rep faces a unique situation and comes to the job with different skills, there will never be a magic formula for success. Managing a territory well is a complex endeavor involving many factors. A thoughtfully assembled customer portfolio that supports your business objectives will establish the solid foundation you need to achieve long term, sustainable growth. PR