Segmentation and Targeting Process in the Pharmaceutical Industry | Today’s pharmaceutical market is full of dynamic changes driven by highly informed customers wanting to get the best product at a fair price. Opening new digital communication channels speeds up their learning and their decision-making processes. Understanding the decision-making triggers is key in earning the customer’s approval at the crucial moment in the selling process.
There used to be times when a simple 2-dimensional segmentation - typically potential / adoption - was creating a competitive advantage and driving sales up. But now that everyone is using the same approach in segmentation & targeting, what is the real differentiation element and advantage? Is there still one as some companies are already using automated multidimensional S&T processes incorporated into their CRM system and linked to their correlation analysis with sales results and market share development?
However, every segmentation and targeting set-up usually uses retrospective customer data collected by sales reps or market research agencies (or a combination of other sources). What if we could predict our customer’s future behavior? This would be our key advantage in the S&T process with our competitors crying in the corner!
Effective segmentation & targeting: the Key Success Factors
Typically, there is a natural conflict between Marketing, defining strategic customer segments, and Sales, defining “the best customers” most often based on face-to-face experiences. The role of FLSM and Marketing here is crucial. You can have the best S&T set-up, but without full buy-in from your Sales Reps the implementation is out of order only 3 weeks after cycle meeting. The best results come up when segmentation and targeting set-up is a cooperative and iterative process driven by hand in hand Marketing and Sales collaboration.
There are 2 critical components in the segmentation and targeting process:
- Really well trained sales reps and FLSM who truly believe in their S&T processes as being the best tools to reach their goals and get their top bonuses.
- Data quality and reliability. Well designed and managed market research, usually 24/7 monitoring 365 days in a year is a must. A good example might be any PromoMonitoring tool you can purchase with online live data per customer group or panel.
Data matters more than ever in the S&T process
For a segmentation and targeting process to be successful, companies also have to manage external stakeholders: data providers.
When customer prescription data aren’t available, for example in Europe, market research agencies or ongoing PromoMonitoring tools fill in the void. In the US, you can track daily prescription data for every prescriber, which can result in an automated and daily S&T data update. It’s always amazing to watch US sales reps waking up in the morning and checking their daily updated route journey on iPad, based on yesterday’s prescriptions!
Sales data coming from providers and from PromoMonitor, where there are limited “friendly over-positive” answers, are considered to be cleaner as data are provided by a third party. Unfortunately, only a panel of customers is involved – usually 5-8%, which is a good indication of the whole customer set of behaviors. Internally, data are usually provided by sales reps and history records as the best sources of information.
Cooperation between departments is essential in this process
As we said earlier, the key factor for success in this process is cooperation between sales reps with FLSM and Marketing (PM).
In the pharmaceutical industry, specific segmentation and targeting skills and capabilities are needed to understand the critical importance of this process, of gathering and cleaning valuable customer data, adapting sales tactics to different customers’ needs accordingly and gaining customer commitment. In addition, support and coaching from FLSM with a push & pull approach based on a continual territory business planning process (with SMART-ly defined objectives adapted and reviewed regularly) are strongly needed to ensure full sales success.
As Eisenhower said (old quote but still very true): “Plans are nothing. Planning is everything.”
In the second part of this article, we will explore the different approaches to conduct and optimize segmentation and targeting effectively in your company.
The Actando Consulting Team