Forward thinking brand teams are developing a value-based promotional model to promote products in a way which is perceived as offering real differentiation
In 2006, Michael Porter (in partnership with Elizabeth Teisberg) used his considerable expertise on competitive strategy to address challenges of the healthcare system in the U.S. with the publication of the book ‘Redefining Health Care’.
This envisioned a healthcare system focused on improving value where all products must deliver better results or lower costs for the same results with ‘me too’ products either being improved, repriced or phased out. The book also identified new opportunities for suppliers such as pharmaceutical companies.
“In instances where GPs do perceive value is being delivered, they are more likely to open their doors and engage in a manner which presents an opportunity to influence prescribing behaviour”
The value-based model
Forward thinking brand teams are now developing these and other opportunities to promote products in a way which is perceived as offering real differentiation. Examples of
such strategies include:
- Delivering unique value to patients over the full cycle of care – focusing on care not just product, through the support of patients
and the heath care provider
- Demonstrating value-based on studies of long-term results and costs of alternative therapies
- Ensuring products are used by the right patients
- Ensuring products are embedded in the right care delivery processes
- Building promotional campaigns based on value, information and customer support
- Offering support services that add value rather than reinforce cost shifting.
Pharmaceutical companies that start to engage with the NHS by delivering real value to the health service will be rewarded with:
- Improved knowledge of the care pathway
- A better reputation
- The ability to deliver more differentiated services
- The opportunity to develop better value products.
The first step in developing a value-based promotional model is to decide on the appropriate value-based solutions the pharmaceutical company wishes to deploy for its customers. Once these are identified, the company can then set about transitioning its sales force structure and how it markets its products and services.
Fundamental to the process of transition is an understanding of the competitive landscape. The move towards a value-based environment is taking time within the NHS. Therefore, it is important that companies pace their rate of change in parallel with the rate of change within the NHS. A mix of traditional and more value-based promotional strategies is likely to be most effective at the current time.
a. Improving the value of noise’
Many commentators suggest that the noise model is dead and that companies need to look elsewhere to drive sales performance. This is misleading because creating noise is hugely important in any sales environment. The key is the content and whether it is effective. The traditional representative is finding access increasingly difficult as GPs face growing patient demands and administrative burdens. GPs often see interactions with representatives as providing little, if any, value and are simply not willing to spare the time to listen to a detail. In instances where GPs do perceive value is being delivered, they are more likely to open their doors and engage in a manner which presents an opportunity to influence prescribing behaviour. Put simply, pharmaceutical companies should be looking at a sales structure model that encompasses the characteristics in Figure 1 above.
Some observers believe that the pharmaceutical sales representative is one of the world’s most underutilised resources. For most companies, their representatives are still the people who interact with customers far more than anybody else. These customers appear now to be even more important in the buying process and therefore common sense would seem to indicate that the representative’s role is more important than ever, not less so. Yet the only way that this can be the case is if the role of the representative changes from delivering a detail to delivering value, otherwise customers will continue to refuse access and react negatively to any interaction. The footprint of a successful and valued HCP interaction should include as a minimum:
- Intelligent conversations with customers about the care pathway with, of course, the role of product within that pathway.
- Consulting to, and with, the customer about therapies and disease areas.
- Advocating improved patient outcomes and assisting GPs in delivering them.
- Providing additional value based on the individual preference and needs of the customer.
As highlighted earlier, one of the key constants in the NHS going forwards will be enormous time pressure, and therefore any new role for representatives must also be supplemented with new ways of accessing customers, for example through multichannel processes which deliver engagement and value in an acceptable manner and at a time and place driven by customer preferences.
b. Why customised value wins
A key role of the sales force is to provide value to customers that is value over and above that provided by competitors and so enable the company to grow market share. Historically, much promotional activity to GPs has been based on a key fact, that all the customers are the same. This is obviously not the case. However, marketing departments wishing to provide customised value to customers are often unable to do so for several reasons:
- Representatives and others are not skilled in nor indeed tasked with identifying individual value requirements of customers.
- Technological solutions have so far been found to be ineffective or companies have failed when attempting to execute them.
New recruitment & management models
To support sales excellence in a value-based promotional model, new recruitment and management models need to be deployed to find the right people and ensure they are implementing the right things.
In the face of overwhelming evidence, top performing companies have accepted that world-class recruitment processes are of strategic importance to their future and in driving sales excellence. The key issues in developing a strategic recruitment process in an organisation include:
- The need for a holistic approach to recruitment; incorporating the recruitment process itself, retention strategy and the total package offer
- The identification of the new skills required to perform in a value-based promotional economy
- Assessing for those skills through innovative recruitment processes that identify talent, competencies, cultural fit and mental toughness.
Similarly, new models of management are required to support employees to engage successfully in the new economy. These new models are outside the scope of this article, however a key determinant of success is an effective process that trains and develops people to identify and implement the most appropriate customised solutions for each specific customer. For example, key account managers who are promoting to clinical commissioning groups are faced with approximately 200 customers with very specific requirements, which requires a tailored approach. Many employees need extensive help in transitioning to this environment, which presents a considerable challenge to many management teams.
Ahead of the competition
Sales excellence is the ability to engage with customers in meaningful ways which allow the customer to recognise the added value from the interactions they are having as well as the value being brought to their investment decisions around which therapies to recommend. Failure to do this will reduce customer access and open opportunities for the competition.
All customer interactions should be delivered by empowered, informed and appropriate staff at the right time and with the right speed of delivery. In addition, all solutions deployed must be based upon delivering value initiatives which create success for patients, success for the NHS and deliver a reasonable return on investment for the pharma company.
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