How about considering profitable segmentation?

Dr. Andree K Bates

Eularis

In today’s dynamic and competitive pharmaceutical environment, being able to effectively target your promotional activities towards those customers most likely to respond, in order to drive best financial return on your investments, is vital. You need to understand what components of your sales and marketing are driving prescribing behavior, and with whom, if you want your sales and marketing campaigns to generate higher revenue and profit.

What I feel is missing in many companies is the utilization of the fact that different physicians can respond to different components of sales and marketing differently as well as to different channels.

Yes – most marketers in the pharma industry segment prescribers into high decile, medium decile and low decile and non prescribers where they can, or even large, medium and small accounts. This is certainly interesting, and better than nothing and it does help us understand the result for these groups of physicians, but it does little to let us know exactly why these different physicians are in these different groups. What is it that convinced the high prescribers to be high prescribers, what it is that is stopping the low or non-prescribers from prescribing your drug?

It is critical to understand exactly how to market to the different groups and that the different volume groups have become part of that volume group due to their perceptions of specific things. Maybe one part of the high prescribing group are very convinced by journal articles, maybe another group are more convinced by KOLs. Maybe some respond strongly to PR or advertising. Why would there be these differences and wouldn’t it be great to be able to know which messages, which content and which channels within each therapy area are driving each kind of doctor into a high decile prescribing frame of mind? Also, what about ideal marketing mix bundles for specific segments of physicians so we can know which types of physician respond to which types of marketing channels?

"…wouldn’t it be great to be able to know which messages, which content and which channels within each therapy area are driving each kind of doctor into a high decile prescribing frame of mind?"

Many of our pharmaceutical clients have used a variety of segmentation models to look at this. I have seen approaches based on usage segmentation, behavioural segmentation (both prescribing and social etc), attitudinal segmentation (e.g. innovation etc), psychographic segmentation (lifestyle, choices, personality differences etc), demographic segmentation (age, gender etc), geographic segmentation (regional, rural, urban etc) and more. There are clearly many ways to segment - but which are yielding the best results?

So, in order to really make sure our marketing is meeting the right needs of the right segments (whatever method is being used) we need to understand what it is that is actually driving physician behaviour. Studies have shown that it is a combination of emotional and rational factors that make physicians prescribe brands (and the weighting of these vary over the lifecycle of a brand also). Physicians don’t know why they do what they do (even though they might think they do!). They are humans and like all humans we like to believe we are rational and do things for rational reasons and will argue this to the death. That reminds me, there was an excellent chapter on this in Malcolm Gladwell’s book ‘Blink’ – well worth a read. But, I digress. Think about your own behaviour as an example. Say you go to the supermarket and buy some bread. What brand do you choose? Why do you choose it? Really? You may say ‘because it is the healthiest’ or ‘because it tastes the best’ or ‘because it is cheapest’. Humans will usually have a rational explanation in their mind for why they do what they do. But the reality is, advertising does influence behaviour, and marketing does influence behaviour, despite the fact we don’t like to think that we ourselves would be influenced by it.

It is critical to have an approach that allows you to prospectively understand how different customers segment, i.e. what common needs, behaviours, or characteristics different groups of customers have that will lead to varying levels of prescribing opportunities for your brands, and that will identify the optimal mix of promotional activities that will deliver your messaging and clinical information with greatest effect.

"Physicians don’t know why they do what they do (even though they might think they do!)."

Being able to effectively know which components of your sales and marketing mix (including what content and which channels) are driving sales and prescribing for your therapeutic category, in which types of customers, allows you to target your investment precisely, driving the best market share impact for your brands and allowing you to make trade-offs between different promotional approaches to maximize the return on your financial investment.

So, how do we get to the bottom of figuring this out?

Eularis has a robust proven methodology (94.8 analytics) for getting the root of the cause (both rational and emotional) prescribing behaviour and are finding that this approach can be utilized to effectively optimise and verify numerous types of segmentation approaches, and to accurately profile the segments that result in terms of the ideal content and channels to target them with. By running 94.8 analytics with various types of segmentation approaches, we can see which ones are having the strongest correlations with changing prescribing behaviour, and therefore within those sub-segments, exactly what content, what source (peers, KOLs, reps etc), and what channels (advertising, journal write-ups, meetings, PR , reps etc) should be used for these sub-segments to have the highest impact on the physicians prescribing behaviour.

Case study: Increasing sales through market segmentation

When a primary care drug marketer was able to identify actionable physician groupings, it developed both customized marketing efforts and next-generation products and services.

Situation

The manufacturers of a top-tier primary care brand found themselves with:

• Miscommunication among sales and marketing teams that resulted in inconsistent programmes directed at the same physicians

• Ineffectively targeted marketing and advertising materials

• A marketing segmentation approach that left out the profiles of its most profitable physicians

• No clear approach to classify, target and be aware of key physician needs

Approach

The company developed a market segmentation strategy. The client's objectives:

• Develop a needs-based segmentation model for the various top 5 European and North American markets

• Develop a simple, meaningful way to identify and understand key customer groups

• Increase the effectiveness of sales and marketing results

• Ensure that each segment received relevant and influential product message clustering, channel groupings and service offerings

Results

By creating actionable physician groupings, the client was better able to target their sales and marketing. The result? A more efficient, lean, marketing machine that met the needs of the different segments in different ways, and a market share and sales increase of 37%.

Conclusion

Well-executed segmentation projects will quickly identify customer profiles that have higher propensities to generate incremental revenue than the average. Once the characteristics of a promising segment are identified, the information can be used to target new customers with similar profiles. Eularis is successfully using robust analytics that get to the core of which content and sales and marketing activities are influencing different physician segments to accelerate brand growth and get more from the marketing spend.

"By targeting the different segments slightly differently and directly, marketers gain higher and quicker return on their marketing investments"

By targeting the different segments slightly differently and directly, marketers gain higher and quicker return on their marketing investments. Imagine inviting only physicians for whom the content of your symposia, and indeed symposia activities had a strong persuasive influence to your next meeting? Imagine sending your sales reps only to physicians for whom this was a strong influencing activity? Imagine utilizing your marketing spend for each activity only on the specific physicians for whom this was beneficial? And there is an additional benefit of market segmentation: identifying existing customers whose profiles are predictive of high value for targeted up-selling.

About the author:

For any assistance with segmentation for greater impact from your sales and marketing spend, please contact the author, Dr. Andree K Bates at Eularis www.eularis.com.

Do you segment your customers based on how they are influenced?