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Avoid the flat sales trap

All drugs launch with high expectations but good planning is necessary for sales success

What is the difference between stellar sales and lacklustre mediocrity?
The answer lies in our assumptions and the facts on which they are based. Are our assumptions about market growth accurate? How large is our target market and is it growing faster or slower than the market as a whole in terms of prescriptions?

This distinction is important because growing sales in a rising market with a wealth of new scripts to compete for is easier than having to displace a competitor with the benefit of doctor confidence, based on greater clinical experience and possibly a lower price.

Then, is our target audience reachable? What are its characteristics and do our criteria for segmenting it make practical sense? Slavishly following a target list based on potential, for example, is not the answer as it is based on a number of flaws.

Firstly, is the criteria difficult to check
independently and secondly, the weight of competitor activity is probably based on precisely the same data so we are concentrating our efforts in the most competitive sub-segment; not a good strategy!

The alternative is to be creative with segmentation and choose criteria clearly linked to our value proposition. If, for example, our USP is based on a low side effect profile, it is likely to be more important in an elderly population. Here demographic profiles can identify rapidly the key areas, while selecting the senior partners in larger practices will generally ensure that our efforts are concentrated in the right areas.

Although doctors are influenced by repeat scripts, concentrating efforts on practices rather than individuals, makes more sense strategically and avoids the madness of reps actually turning down opportunities to see people, simply because they do not appear on the target list.

Thirdly, does our strategy address how we are going to see them? What mechanism will allow us to contact chosen individuals with a higher-than-average probability? Which activities in our plan are designed specifically to accomplish this and why will it work better than those of our competitors?

Donít rely on we shall call on GPs and convince them to use the product. That is not a plan, it is bland, meaningless statement which, as a marketing director, I hear far too often from experienced marketers!

Fourthly, do we have a compelling value proposition that clearly positions our product within our chosen sub-segment and provides straightforward rationale for why it should be used in preference to the competition?

Sales targets

What is our target segment position? Which customers are we aiming for in order of priority? What are the criteria for choice of brand in our market and how are we positioned with respect to them?

These questions will determine our marketing plan. To define our sales objectives, we must examine the size of our target market segment. Given our product licence, which segments can we address in what order?

Next, we must work out our proposed sales target in terms of prescription share. What are the prescription dynamics of the segment and how are they allocated between the established competitors? How many new prescriptions are generated monthly versus switches and where do they come from: unmet need or lack of efficacy/side effects?

If the sales target is attainable, we should know where the bulk of our prescriptions will come from. This information, compared with a realistic assessment of our strengths and weaknesses, will define a strategy, ie, the how which links the market opportunity (need ñ customer ñ segment) to our resources (salesforce ñ marketing ñ budget), in order to deliver our value proposition and capture target share (sales objective).

This seems simple enough so why arenít new launches consistently successful? There are two main reasons: errors of omission and errors of commission.

Errors of omission are when we havenít done something we should have done. This commonly manifests in poorly thought through plans that donít effectively link segment to customer to proposition.

In short, the positioning is not thought out and something important is missed. The easiest way to check through this is to view a marketing plan as an objective linked by activities, through a strategy, to a budget within a specific time frame. Firstly, we must examine whether our objective was achievable and what the variances in terms of regional performance are telling us about it?

Secondly, did we carry out each of the activities that were planned on time, ie, co-ordinated correctly and directed against the right customers?

Thirdly, was our value proposition delivered effectively, for example, by post detail follow up and New Change Therapy Enquiry? If yes, then our strategy is at fault and we need to identify what is missing. The fault generally lies with implementation; good implementation will rescue bad strategy nine times out of 10.

Good strategy is easy to spot. It comprises a series of clear, well-directed steps, each reinforcing the previous step. Unfortunately, this is rare for two common reasons. Firstly, we base our actions and assumptions on past experience but markets today are not the same as they were previously. More importantly, we over compensate for our mistakes and repeat our successes, making it very easy for our competitors to read us.

Secondly, we lack confidence in our actions and rely too much on following industry patterns, notably those of our competitors. We rarely zero budget and start with a blank sheet of paper in order to identify what our priorities are, how we shall accomplish them and what we need to realistically budget in order to carry out our strategy as planned. This means that we build past mistakes and past assumptions in to our budgeting process.

Thirdly, we over complicate things and confuse our customers as a result. This is demonstrated by the dispensing doctor omnibus, which identifies that they are unwilling to see contract reps because they merely reiterate the basic product message.

Certainly recent return on investment (RoI) analysis supports the view that contract teams may deliver similar numbers of calls but that sales, due to these calls, may fall a good deal short of in-house teams. Adding a extra sales team may actually confuse rather than clarify and effectively act against the existing team.

Fourthly, we fail to stick to the knitting. We change strategy mid stream without measuring the effect of our previous strategy. This is sheer waste and madness because it is relatively straightforward to objectively measure the effect of previous strategic actions using RoI analysis. The RoI analysis will provide a clear ranking of what has worked, what we should keep, and what actions were not effective and should be changed. This assessment also gives us a base case against which we can measure the actual effect of our new, hopefully improved, strategy.

Not doing this is like trying to nail a jellyfish to the wall with rubber nails, everything moves, which means that we canít actually see what improvement we are making. Not choosing to measure something, when excellent methods exist, is simply ineffective marketing.

Finally, keep it simple. Kitchen sink strategy ñ the art of throwing everything in ñ just doesnít work. It dissipates our focus and
confuses our customers. This is reiterated in many RoI analyses where, on average, 30 per cent of the promotional budget is wasted and some actions actually antagonise sales. Cutting activities out of our budget will make more effective use of it and allow us to concentrate on the factors that will actually drive sales.

Often it is not actually our fault that the customers get confused. We get promoted because of our efforts and the new marketing manager chooses to change the ad. This, again, is nuts particularly when you can accurately measure both the current and cumulative effect of advertising. The individuals who denigrated the Naprosyn lion to a small symbol on a door knocker, or dispensed with the Ventolin eagle or the Brufen carthorse, effectively flushed many thousands of their companiesí promotional investment money down the toilet, not to mention the resulting damage to hard-earned product position and customer confidence!

Alternatively, we may be forced to change strategy, like Takeda which couldnít afford to keep trying to enact a Pfizer strategy. Some say the reason behind Takeda outsourcing its sales team was that they had spent a comparative fortune on conventional promotion and not achieved the sales. Figures show how far away from the industry line its promotional strategy had taken it and perhaps explains the need for a rapid, but well sold, change of focus!

Where then do we concentrate our efforts when sales growth starts to drop? First we should look at the regional variances from budget in the sales figures. This is a sensitive and useful indicator because if we are achieving our sales targets in some areas it is unlikely that our overall strategy is flawed. It is important to realise that only a small proportion of our salesforceís time is actually customer facing (about 6 per cent of sales time).

For this reason the old tools of coverage and frequency often let us down. While they are useful at a macro level, what actually happens at the grassroots can be very different. Research at Aston shows that on average, most fieldforces contain between six and eight different realised strategies. This explains a great deal of the variation, both in company sales and time spent face to face with customers. Here the winning realised strategy may deliver 50 per cent more sales than on average and illustrate how strategy can actually work if it is
delivered effectively. Understanding the field force strategies enacted by the fieldforce is an important key to competitive advantage.

Secondly, measure each promotional cycle and compare it against the last using modern RoI analysis. This will ensure you know what is actually working before you make expensive, ineffective changes. Thirdly, be creative and have the common sense not to over complicate things. Finally, implement the strategy well and concentrate on the time spent in front of customers. Have a clear, convincing rationale for why they should switch to your product.

Dr Graham Leask is a member of the Economics & Strategy Group at Aston University and may be contacted at g.leask@aston.ac.uk

17th September 2007

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