Payer Influence on Product Performance in Pharmaceutical Industry
Understanding a Payer’s ability to control its formulary is an important issue and one that Pharma needs to factor into contracting decisions, allocation of promotional budgets (personal & non-personal), and other commercial areas. Without a true understanding of a Payer’s level of control, Pharma may make sub-optimal decisions with regard to rebates and/or the level of resources required to effectively manage pull-through activities.
Linking ‘Customer Focus’ with ‘Business Performance’
The concept of the ‘customer-centric business’ is pervasive, with companies small and large, across every industry, making efforts to improve customer focus. This is no doubt good as businesses would not exist without customers. However companies run the risk that efforts to increase customer focus become disconnected from business performance. If they do not deliver business value, customer-centric initiatives are not likely to stick.
In this paper, we discuss the need for a direct connection between efforts to increase customer focus and performance of the business. We introduce a framework to define how customer-centric initiatives drive value, and then isolate metrics to measure and manage. Our framework is built on the premise that ‘value to the business’ is the ultimate objective of customer-centric initiatives. We differentiate between two paths to value, ‘improving effectiveness’ and ‘generating shared value’. By clearly defining the value ‘outcomes’, we create the basis for identifying ‘drivers’ of value, using customer data. These drivers of value are the basis for selecting a focused set of metrics to measure and manage customer-centric initiatives. We show how advanced analytics are critical for leveraging available customer data to establish relationships and quantify value to the business. Having identified and quantified ‘drivers’ of value and the desired ‘outcomes’, we are then able to design customer-focused initiatives that influence these drivers. Managers should insist that customer-centric initiatives link to specific business objectives and use an analytics-driven approach to define the metrics that matter. ‘Customer focus’ can then become more than a good intention: it can be a powerful tool that delivers true business value.
The Agile and Adaptive Sales Territory Alignment: Managing Change Becomes a Strategic Advantage
Sales territory structures often suffer from inefficiency. Even with regular territory re-alignments, territories tend to ‘drift’ away from optimum. This drift can occur for many reasons: the natural ongoing evolution and shift in customer demographics; market events such as competitive product launches; environmental and regulatory changes; internal events such as changes in company priorities. Over the course of a year, up to 50% of sales territories could become 20% too large or too small due to the cumulative drift. Furthermore, attempts at improving efficiency through re-alignment typically incur a significant cost due to ‘disruption’ of existing customer relationships and the need to form new ones.
To gain full benefit from territory management, we propose an ‘agile and adaptive’ process that allows for more frequent alignment adjustments to maintain an ongoing efficient solution. This approach embeds the culture, process and tools of alignment into the organization – so that adapting to change becomes a skill of the sales rep, significantly reducing the cost of disruption. This approach leverages optimization tools and scenario analysis to support data-driven business decisions that align territory structures with business objectives. Implementing this capability into the organization requires a robust process supported by analytics and technology. We outline the critical success factors for making it work.