Commercial Excellence 2.0

The pharmaceutical selling model has been established for decades. Much has been done on improving the model and squeezing efficiency from the model using sales force effectiveness tools and IT-enabled solutions. The authors propose six tenets to Commercial Excellence 2.0 which will be elaborated in this three part article series. In brief, these six tenets are:

• Move beyond share of voice: Engage with the customer to drive value in his business and ensure the messages delivered are differentiated, relevant and absorbed
• Manage performance, not incentives: Understand the behaviour of the sales force segments and then customise incentives and coaching to address specific patterns
• Let the market drive marketing: Zero-base your marketing spend and then align your initiatives with where your brands are in the product lifecycle
• Integrate to differentiate: Align the commercial model across sales and marketing and close the loop effectively
• Middle managers manage a business: Equip Zonal / Regional managers with the right skills to manage a business vs. just managing sales
• Sharing is caring: Pockets of excellence exist, but best practice sharing is rarely institutionalised, getting teams to learn from each other is key.

In the second part of our series, we focus on the marketing model, particularly ensuring marketing initiatives are aligned to the state of the market in which the brand competes and outline a concept of an integrated approach to sales and marketing.

Let the market drive marketing

Return on marketing investment is an interesting concept, but often times difficult to implement. Companies push back saying the impact of different marketing activities on sales and the direct linkage is often difficult to pin down. Often times, companies under-invest in tracking their marketing spend effectiveness because of these fundamental ‘shortcomings’ of the marketing process.

On the topic of measuring returns, first we need to look at how spend is determined. Rarely is marketing investment built from a ‘zero-based point of view. Marketing budgets are typically defined as incremental over the previous year. How often have you heard the justification “last year we spent 12 per cent of sales on marketing, this year we believe it needs to 12.5 per cent because brand x, y are at those levels.” Budgeting processes, for lack of time are typically run as an increment over the previous year. “We did 15 events this year, if we need to sustain a growth of 20 per cent, then we need to do at least 18 in this year” is often the argumentation put forward.

Products, however, are in different lifecycle stages and the marketing deployment needs to evolve throughout the product lifecycle. With an incremental budget, rarely is the deployment checked with a critical eye.

Let us elaborate with an example: Take a brand which has been now in the market for five years in a well established molecule. In the initial lifecycle, marketing spend was allocated to education of the doctor on the brand i.e. awareness generation. Over time, the brand has been established with newer brands entering the market place. The dynamic has shifted from educating the doctor about the molecule, to a more competitive dynamic both against other molecules and against other molecules within the ATC-3 as well. While marketing spend has probably increased over time to address this shift, how many times has a brand really looked at its promotion spend from a zero-base and re-aligned it to this shift in the market. A rough analysis of marketing spend will reveal awareness based promotions even for brands which have been around for 10+ years or more in molecules where doctors don’t really need to know much more about the molecule. And that is just marketing; sales messaging, detail aids often don’t sync up with this change in market either. Take for example iron supplements, almost every doctor today knows about anaemic deficiency in women. Is there a point then in continuing to drive awareness programmes with doctors or is the money better deployed in driving compliance with the patient base that you have already?

To test the effectiveness of your marketing spend we suggest you build a matrix of the product lifecycle (i.e. awareness, treatment, compliance) and map your marketing spend by marketing levers (i.e. free good offers, sampling, CMEs etc) against these as outlined in the exhibit.

Tracking the spend increase over time in this matrix will reveal much about your marketing spend alignment with market realities. We have found in our experience, taking a zero based view on the marketing budget could optimize spends up to 20 per cent depending on the starting position of the company. In this competitive environment, an extra 20 per cent to deploy against the right levers could certainly go a long way in driving differentiation for key brands.

Integrate to differentiate

Sales and marketing have existing in traditional silos. While much has been done at the organisation structure level e.g. BU structure to ensure alignment, much still remains to be done at the ground level. Aligning an organisation to deliver a seamless approach i.e. aligned strategic priorities and the subsequent allocation of budgets and activities, timely tight and coordinated execution and feedback and tracking still remains a challenge. Ask yourself this, when the last time availability in the market was was truly synced up with a promotion run at Head Office.

Lack of robust IT systems has truly complicated matters on this front. Do you know today, how much you spend per customer? If you do, fantastic, but then the next question is has this been synced up across BU’s and do you have an integrated view on promotion spend and whom it is targeted to? Do local on the ground promotions and centrally driven marketing events tie up with sales uptick over the promotion horizon?

Very few of the clients we have worked with have established a tight link across the value chain of events, from the fact that promotion has been done, has it effectively reached the right set of doctors, was it executed well and did we track and measure feedback and did the sales force know and refer to it in their next visit.

Practically speaking, having good data in India is tough to achieve. What is a practical model to achieve integration in the sales and marketing approach? Automation tools are touted as the panacea to drive this integration, but as we know garbage in – garbage out apply. The place to begin is with the good old fashioned 80:20. Building off the call list with the right segmentation and tracking of a core doctor set is the first place to begin. Aligning this list across the BU’s and working with the sales team to ensure the list is accurate and up to date is important.

Once this is in place, sales automation tools can help ensure a coordinated effort and help drive alignment in spend and tracking of the results. Driving this is critical, ensuring that you have the right deployment will go a long way in ensuring you are able to deploy and track your spend in the right way.

We hope this article compels you to drive a more integrated and zero-based approach to marketing in your organisation. In the third part of our series, we focus on people, ensuring you build capabilities at the right level for business management and more importantly ensuring pockets of excellence in the organisation are deployed more broadly.