Segmentation: The hidden source of commercial success in a multi-channel world?

Multichannel has been a hot topic in pharma for many years, specifically the quest for the right integrated customer engagement model. 

The focus has been to implement sophisticated orchestration models with CLM and standardise approaches for each personal/non-personal archetype (i.e. to use ‘pure digital’ for mature products, for all customers in all markets, or use hybrid key account managers (KAMs) to orchestrate all key local customer engagement) leaving some of the critical processes to take a back seat. Which brings us to segmentation in a multichannel world.

The hidden source to creating the right engagement decisions is to use meaningful and actionable market segmentation and place it at the centre of all things multi-channel. Getting this ‘right’ and systematic delivers the Holy Grail of the right customer, through the right channel, with the right content and importantly, a step change in results.

This may sound obvious, as segmentation has been the core of pharma marketing for decades. The big question is whether the practical use of segmentation throughout the organisation is as effective as it should be, and whether current approaches are fit for a multichannel world.

Mind the gap

Bogdan Paraipan, Pharma Commercial Excellence Executive, says: “In my recent experience I have seen three practical gaps when it comes to customer segmentation:

  1. Sales and marketing teams do their own segmentation. They use the same words but have different understanding, so there is no consistent story/approach.
  2. Significant efforts are invested in sophisticated segmentations (account/contextual), but not leading to sufficiently differentiated actions or messages.
  3. Customer segmentations were not updated for years even though the market and brand situations had changed dramatically.”

If you can relate to these, consider a refreshed look at segmentation, the beating heart of multichannel marketing. To close these gaps, we found a three pronged approach to drive effective segmentation practices useful: ALIGN, VALIDATE, ITERATE.

  1. Align

Clarifying and aligning the understanding of the ‘why’ and ‘how’ of segmentation for everybody in the organisation.

Start with ‘The Why’

A simple way to view segmentation is as a confluence of three perspectives: What the company wants; What the customers want (including patients), and How they want it:

This is applicable for segmenting any type of stakeholders: HCPs, payers, or patients. It is also very important to acknowledge that a natural segmentation, i.e. HCP specialty or HCP role in the patient journey, may already exist. Any further segmentation should build on this natural first level.

Differentiating each step is important for clarity and to assign to the right person.

Segmentation is not assigning labels to customers in the CRM, it’s a strategic decision aligning how ‘we’ view and engage their world with our product priorities and lifecycle stage. 

For example, an ‘innovator’ customer may be high priority at launch but less so when the product is mature. The customer profile has not changed, but how we view the customer has.

There are other ways to define the process but it is always important to:

  • Differentiate between data gathering (profiling) and the decisions on grouping customers into prioritised segments (segments design)
  • Tightly integrate segmentation into planning decisions and make sure it drives differentiated engagements (including messaging)
  • Discuss how granular you need it – if it doesn’t create differentiated actions you’ve gone too far!

2. Validate

The next important discipline is to run ‘sanity checks’ both after the design phase and once the tactical plan is defined.

Consider:

  1. Is every dimension helping answer the three questions from above ‘The Why’?
  2. Do we have differentiated business objectives for each segment? Are we covering all brand objectives?
  3. Are the tactics, channels and content different enough between the segments defined?
  4. How are the defined segmentation rules reflecting the brand life stage and strategic imperatives?

3. Iterate

Segmentation should be reviewed regularly; it’s both an art and a science to update and fine tune because the customers and the competitive context change; a change in a customer profile provides insights on how the customer reacts to your actions; and your original assumptions may no longer be relevant or valid.

It is highly unlikely that you will design the perfect segmentation. The right approach is based on systematic test and refine loops connecting segmentation effectiveness to measurable improvements in the impact of your multichannel engagements and subsequent business results.

Practical considerations

Conceptually, it sounds clear and simple, but in practice it’s not as easy as it appears. Segmentation, like many other critical processes, needs to be integrated across functions cycle by cycle to become truly embedded as a way of working. Traditional approaches of rolling out new frameworks and ways of working as one-time training is not enough.

Software technology can provide a more practical and sustainable approach. That is why we have created a software solution called CEX. It has segmentation as its heart to manage the complexity of translating brand strategy, to effective integrated customer engagement actions – delivering optimal and consistent multichannel customer actions.

We think it really helps get back to the Holy Grail: ‘The right customer, through the right channel, with the right content’!

Segmentation is THE critical gate and hidden source of effective multichannel marketing. To achieve the required rigour and consistency on a wide scale, a software solution is a compelling option