Pharma marketing: The upside of segmentation
How effective segmentation can deliver better returns on marketing investment.By Aug 9, 2010 on
How effective segmentation can deliver better returns on marketing investment.
In todays dynamic and competitive pharmaceutical environment, being able to effectively target your promotional activities towards those customers most likely to respond 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 differently to different components of sales and marketing as well as to different channels.
Yes, most marketers in the pharma industry segment prescribers into high decile, medium decile, low decile, and non-prescribersor even large, medium, and small accounts.
This is certainly interesting, and better than nothing.
It does help us understand the results for these groups of physicians.
But it does little to let us know exactly why these physicians are in these different groups.
What is it that convinced the high prescribers to be high prescribers?
What 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 to understand 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 is very convinced by journal articles; maybe another group is more convinced by KOLs.
Maybe some respond strongly to p.r. or advertising.
Why do these differences exist?
Wouldnt it be great 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?
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 channel?
A variety of segmentation models can be used to look at this.
I have seen approaches based on usage segmentation, behavioral segmentation (both prescribing and social), attitudinal segmentation (e.g., innovation), psychographic segmentation (lifestyle, choices, personality differences), demographic segmentation (age, gender), geographic segmentation (regional, rural, urban), and more.
There are clearly many ways to segment, but which are yielding the best results?
Driving physician behavior
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 behavior.
Studies have shown that it is a combination of emotional and rational factors that make physicians prescribe brands, and the weighting of these factors varies over the lifecycle of a brand.
Physicians dont know why they do what they do, even though they might think they do!
They are humans and, like all humans, they like to believe they are rational and do things for rational reasons.
Think about your own behavior.
You go to the supermarket and buy some bread. What brand do you choose? Why do you choose it?
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 for why they do what they do.
But the reality is, advertising influences behavior and marketing influences behavior, despite the fact that we dont like to think that we are influenced by it.
It is critical to have an approach that allows you to prospectively understand what common needs, behaviors, or characteristics different groups of customers have that lead to varying levels of prescribing opportunities for your brands.
This will help you identify the optimal mix of promotional activities that will deliver your messaging and clinical information with greatest effect.
Maximizing marketing ROI
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.
This, in turn, drives the best market share impact for your brands, allowing you to make trade-offs between different promotional approaches to maximize the return on your financial investment.
So, how do we figure this out?
Eularis worked with the manufacturer of a top-tier primary care brand which found itself with miscommunication among sales and marketing teams that resulted in inconsistent programs directed at the same physicians.
It had ineffectively targeted marketing and advertising materials and a marketing segmentation approach that left out the profiles of its most profitable physicians.
It had no clear approach to classifying, targeting, and being aware of key physician needs
So the company developed a market segmentation strategy designed to develop a needs-based segmentation model for the top five European and North American markets.
It developed a simple, meaningful way to identify and understand key customer groups and to increase the effectiveness of its sales and marketing results.
The model ensured that each segment received relevant and influential product message clustering, channel groupings, and service offerings.
By creating actionable physician groupings, the client was better able to target its sales and marketing.
The result? A more efficient, lean marketing machine that met the needs of the different segments in different waysand a market share and sales increase of 37%.
The benefits of segmentation
Well-executed segmentation projects will quickly identify customer profiles that have higher propensities to generate incremental revenue.
Once the characteristics of a promising segment are identified, the information can be used to target new customers with similar profiles.
By targeting different segments slightly differently and directly, marketers gain higher and quicker return on their marketing investments.
Imagine inviting to your next meeting only physicians for whom the content of your symposia had a strong persuasive influence.
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.
Dr. Andree K. Bates is CEO of Eularis, which applies analytics to determine the sales impact of marketing programs.
Since you're here...
... and value our content, you should sign-up to our newsletter. Sign up here