Do you ever wonder how to plan your resources across multiple products, channels and customers to ensure it delivers both the brand objectives and the ultimate customer experience? This becomes even more interesting as customers increasingly travel across all channels to get what they want [McKinsey] at a time when pharma is tasked with optimising costs without losing revenue.
Resource optimisation is a set of processes and methodologies used to match the available resources with the needs of the organisation Intelligent Management. Add to this the complexities of a portfolio of products in various lifecycle stages and profitability and sometimes diverse customer needs and journeys, and the task may seem impossible. Historically, we focused resource optimisation on the salesforce, upsizing and downsizing according to the anticipated value of one additional representative to the forecasted sales. The salesforce is a high-value resource in the channel mix and needs to be leveraged optimally within an integrated multichannel strategy to achieve revenue targets and enhance customer engagement. But today, resource optimisation has developed into to something much more sophisticated and comprehensive as we will discuss.
As Commercial Excellence leaders, we are often faced with the task of doing some analysis, balancing costs, benefits and risks, while gaining stakeholder support for any potential resource optimisation model. However, these stakeholders often have differing agendas and are might be competing for limited company resources. Optimal resource allocation is rarely a collective agreement and those dissatisfied with the final decision may even resist implementation of the selected strategy. For all of the reasons given, a robust resource optimisation process is required.
The beginning phase of resource optimisation involves a portfolio analysis. That is an analysis of elements in a company’s product mix, to determine the optimum allocation of its resources. [businessdictionary.com] Market growth and market share are important elements of any portfolio analysis.
Two models that can be used to conduct a portfolio analysis are:
- The Boston Consulting Group (or BCG) Matrix; and
- The GE McKinsey Matrix
The BCG Matrix is founded upon the theory that relative market share is a long-term profitability predictor.
[Relative market share = Our Market Share /Largest Competitor’s Market Share]
The output of the BCG Matrix is a mapping of products across four quadrants, giving a visual of product positions: ‘cash cows’ needing to be maintained for as long as possible; ‘dogs’ needing to be divested unless the market is redefined; ‘stars’ with high market share to be maintained; and lastly, ‘question marks’ - products to be potentially retained and invested in, in order to try to achieve market dominance before the market plateaus.
The GE McKinsey Matrix, on the other hand, considers additional factors.
In this methodology, we consider competitive strengths and market attractiveness, weighting each factor. This provides a 9-box grid, giving a deeper insight into where products are positioned in comparison to each other, enabling decisions on divesting/ investing, protecting/expanding, harvesting and variations in between.
Portfolio analysis is followed by the carryover calculation of each product in order to understand the incremental sales generated by your activities know the real impact of your commercial investments.
Continue with a financial portfolio analysis which prioritising your products portfolio based on their commercial contribution in line with your strategic objectives in order to maximize your return on investment.
ZS Associates, 2016, found that the pharma selling model was very process-driven and formulaic, rather than personalized. The model did not allow representatives to deviate, adapt or improvise to meet customer needs. In many markets, representatives have limited access to physicians. New lower-cost digital channels have emerged, and customer preferences have changed. We have to consider the mix of human, print, and digital channels and how they work together.
Only following an alignment of the company’s portfolio priorities, the financials, customer priorities, and the optimal frequency of contacts across channels are you ready to consider the structure and sizing of your salesforce, and validate it against some scenarios.
Salesforce access to HCPs has been on a rapid decline for some time now. We know too, that we have very informed customers and patients, with access to information from many online sources, adding complexity to every selling situation. The role of the salesforce remains important for driving organic growth as well as providing HCPs with information about alternatives, educational opportunities, patient materials and other support services. Used in conjunction with other channels, the salesforce can have a multiplier effect i.e. by having an impact directly and then by driving traffic to the other channels at the right time. Thus, we need to orchestrate communication across multiple channels with precision and sequence, context and purpose.
Actando’s new online Resource Optimisation Planner connects multiple tools to build, test and validate scenarios for implementation:
- Strategic Portfolio Analysis
- Product Carryover
- Financial Portfolio Prioritisation
- Customer impact per product
- Optimal frequency/channel mix
A second set of tools supports the build, test and validation of scenarios on salesforce design, structure, sizing, promo grid and multichannel mix, providing options for implementation based on comprehensive data and analytics.
If you are interested in our mobile learning solutions on digital channels, contact Actando.
The Actando Consulting Team