Sales and marketing: The seven levers of sales and marketing performance that drive sales growth and deliver sustainable competitive advantage.

1. WHITE PAPER:
SALES & MARKETING
April 2014:
The seven levers of sales and
marketing performance
that drive sales growth and deliver
sustainable competitive advantage

2. Sales & Marketing 2
A white paper from IMS Health. April 2014.
The seven levers of sales and marketing performance that drive
sales growth and deliver sustainable competitive advantage
• Profiling and segmentation
• Differentiated brand strategies per
customer segment
• Customer-weighted portfolio value
• Customer-centric selling
• Optimised targeting implementation
• Optimised territory structure
• Performance monitoring and incentives
We have had the opportunity to work with all of the top 10 international pharmaceutical companies and
have supported and analysed over 50 of the leading global brands’sales and marketing effectiveness
initiatives in a variety of product life cycle stages.
Many of these projects have allowed us to measure and monitor the impact of these sales and marketing
initiatives over several years.
During this process, we have sought to challenge the most critical‘levers’of performance and to
understand how well companies implement these to drive their sales growth and to achieve sustainable,
competitive sales and marketing advantage for their company and their brands.
This article seeks to explain seven major levers we have identified as critical to a company’s success and
to identify some of the pitfalls for those of you who are prepared to take the challenge to review the way
you are doing things today.
The seven major levers are:
1. Profiling and segmentation
We often find confusion between the terminology and meaning of a‘profile’and a‘segment’. The reason
for this is that doctors (and other customer groups) are typically‘profiled’only on a single profile element
(in the case of GPs – typically therapeutic area potential). If only a single profile element is captured,
those profiles will be grouped into‘segments’(e.g. As are the top 10% of the profiled universe, Bs the
next 20% and Cs the next 20%), so profiles are considered the same as the segment.
Based on this type of basic segmentation, it is very difficult for companies to identify meaningful results
from any strategic analysis of these segments. The types of analysis we are referring to would include
resource allocation modelling, scenario planning and response curve analysis. The results typically show
little variation across segments due to the coarseness and heterogeneity of the segments used. This in
turn often leads to the wrong business conclusions being made (i.e. there is no difference in the sales
responsiveness of customers to call frequency, or customers in the A segment don’t seem to be any
different to the C segment customers).

3. Sales Marketing 3
A white paper from IMS Health. April 2014.
We recommend capturing at least two profile segments and creating a 2x2 matrix of these profiles
results to define four segments.
By intelligently capturing additional relevant profile elements about your customers and then
building segments based on these aggregated profiles, we have seen a ten-fold difference in sales
response between customers with the same level of promotional activity who were all previously
defined as‘A targets’.
MARKET VALUE
LOW HIGH
BRANDVALUE
LOWHIGH
2x2 customer segmentation model. By incorporating two profile elements and capturing the value
of customers on these two dimensions, each customer can be placed into a discrete segment. In this
example, scores of 1–5 are typically used to define‘value’for each profile element, with 1–3 being
grouped as HIGH. A customer who scores 1–3 for the brand value and 1–3 for market value will fall
into the green segment. They have high brand value and high market value. A customer who scores
4–5 for the brand value but 1–3 for the market value will fall into the orange segment. They have low
brand value, but high potential. Traditionally, both groups would have been defined as As (because of
their market value), yet they are quite different (as defined by their use of your brand) and need to be
marketed to differently. This provides sales and marketing with opportunities to differentiate strategy
and resources to these new segments. Importantly, a greater understanding and ability to measure
cause and effect on sales also allows the organisation to measure ROI moving forward.
2. Differentiated brand strategies by customer segment
We often see relatively undifferentiated brand strategies to each of those segments. Brand strategy
is often limited to call frequency objectives per segment and little other differentiation (e.g. As need
12 details p.a., Bs need 10 and Cs need 8, etc.).
The appropriate level and mix of resource to well-defined customer segments will drive vastly different
revenue and ROI. Effective marketers consider brand strategy differentiation by segment including:
• Brand message
• Sampling
• Call frequency
• Value added service strategies
The most effective marketers also go beyond sales representatives to include all sales and marketing
channels as part of their brand plan.
Complementary strategies and/or supplementary strategies are also often not fully leveraged.
• Supplementary – utilisation of other channels where sales representative access is an issue or for
low value customers (red segment) with whom sales force activity is too expensive.
• Complementary – through direct mail and other channels to increase the effectiveness of sales
force activity and create opportunities for additional sales force promotional exchanges with
key customers.

4. Sales Marketing 4
A white paper from IMS Health. April 2014.
3. Customer-weighted portfolio value
A sales representative will typically have responsibility for a number of brands that they must
promote – often in multiple therapeutic areas. Customers are often defined as‘targets’based on a
‘lead’brand, so individuals who are strongly relevant for the other brands (but not that particular
brand) fall out of the target audience.
MARKET VALUE
LOW HIGH
BRANDVALUE
LOWHIGH
MARKET VALUE
Dr Black
LOW HIGH
BRANDVALUE
LOWHIGH
MARKET VALUE
LOW HIGH
BRANDVALUE
LOWHIGH
BRAND A BRAND B BRAND C
Dr Blue
In this example , both Dr Black
and Dr Blue are interesting for
the company, but if Brand A is
driving the targets, Dr Black
would not be a target (despite
his value for Brands B and C).
Lead brands may change from cycle to cycle and targets may change with them, so consistency of
promotional activity with key customers can be lost.
We advocate a more holistic approach to defining customer value for your company based on the
aggregation of customer’s value for each of your brands as follows:
• Determine a process that allocates a‘points value’for each customer for each of your major
brands – based on their segment for that brand.
• Factor the points value to allow for each brand’s strategic importance, product life cycle and customer
segment responsiveness.
• Aggregate the individual points values for each brand (weighted or factored) to determine a
customer-weighted portfolio value for each customer (their value to your company).
• Use this methodology to drive sales force and marketing activity towards the‘most valuable’
customers for the team/company, while being able to define what constitutes each customer’s value
at the brand level and drive brand strategies accordingly.
4. Customer-centric selling approach
Many companies stipulate a specific order in which they want each brand to be presented during every
sales call.
While this makes it easy for the company to administer, the relevance of the first and/or second brands
discussed may be lost to the customer.

5. Sales Marketing 5
A white paper from IMS Health. April 2014.
Companies that measure details per call without reference to the relevance of that brand to the
customer are often surprised to find that while they are achieving 2+ details per call, only 50% of these
were‘relevant’to the customer – i.e. half of the brand details were to non-targets for that brand.
Assuming you implement a portfolio value approach as described earlier, the most successful companies
have also included the following in their brand plans:
• Introduce brand call objectives rather than sales call objectives. What we are interested in is not how
many times a customer is seen , but how many times our brand was detailed to that customer in
detail position 1.
• To help achieve this, introduce a customised brand detailing order (within a call) based on the sales
representatives achieving a brand call frequency objective for each customer for each brand.
• Flexible detailing has also been shown to drive call value by increasing the number of‘relevant’brand
details per call – where the detailed brands are‘relevant’to each particular customer.
5. Targeting implementation
A number of companies find it very challenging to drive clear implementation of call plans down to the
sales force. Consequently, we often see a very high percentage of valuable sales and marketing resource
going to non-target customers (50% is not unusual).
The reasons for this can be quite varied and, in addition to those issues already mentioned above,
may include:
• Lack of coordination between business
objectives and sales force performance
incentives and rewards. A poorly thought-
out call activity metric that is financially
incentivised will always encourage‘call
fodder’. Worse, it may also encourage
inappropriate profiling (to ensure activity
metrics to‘targets’are also achieved).
• Inappropriate territory structures or
resourcing to achieve the call plan
(under/over resourcing by geography).
CALLS (MAT)
A B C All
Required
In this example, calls by customer segment
are shown (stacked bar) and a black line (|)
depicts the required calls to achieve the
brand strategy (based on call frequency
objectives to each target segment).
As seen here, the number of calls needed
to achieve the brand plan is physically
impossible.
• Lack of alignment between the brand plan, sales action plan and their implementation.
• Lack of a sales representative customer level activity reporting to identify individual customers
who need to be seen in order to achieve brand strategy.
• Lack of a robust monitoring process to support sales management corrective action.

6. Sales Marketing 6
A white paper from IMS Health. April 2014.
Recognising that improved customer segmentation and appropriate brand strategies to the most
valuable segments will put tremendous pressure on sales forces’time and planning efforts to see these
customers, organisations need to consider weighing call quality versus call quantity (where quality
is defined by the message relevance and value of the customer this is being delivered to) and decide
which behaviours they want to encourage, measure and reward.
A significant point of leverage that is often overlooked is
the value of the target audience. No amount of resource can
significantly drive sales from customers with little or no value.
By comparison, carefully planned and executed resource to
high value customers will provide a significantly better return
on investment.
We have implemented a customer-weighted points value metric to replace calls per day as a KPI. For
example, customers are valued from 2 – 20 points (based on their segment) and absolute calls per day
are replaced by call points per day (call points = customer points value x calls). This takes the focus
off the‘6 calls per day’quantity mentality (where all calls are of equal value), and replaces this with a
quantity x quality approach.
This also encourages planning and execution of sales force time and effort to high-value customers, with
the sacrifice being a shift away from calls to low-value customers.
6. Optimised territory structure
A common issue is existing territory structures that have been built on similar total customer numbers
and/or based on therapy area sales, often for a product that is no longer promoted, despite the
introduction of other new product launches and/or external factors in the market. By not addressing the
territory structure, this becomes a major rate-limiting step to setting customer targets. Each territory is
typically given equivalent numbers of targets and sales representatives are asked to profile doctors into
these predefined categories – irrespective of whether this represents the true value of customers for
each brand.
We have seen extreme variance in‘territory value’as a result of this approach, and the existing profiles
and forced distribution bear no relevance to the‘real world’(see PREO™ Performance Quadrant report
example below).
A‘catch-22’situation prevails – many companies find this too difficult to tackle and as a result, profiling
accuracy and segmentation cannot be addressed either.
Rather than considering total customers in a geography and/or total revenue in a geography, territories
should be built based on resourcing requirements (based on brand plans) to ensure optimal territory
serviceability for your defined customer segments.

7. Sales Marketing 7
A white paper from IMS Health. April 2014.
7. Performance monitoring and incentives
We have all seen companies with enough reports to keep a sales representative and their sales manager
‘busy’for a day each week. In reviewing the purpose of each report and asking the question‘What
business decision(s) does this report enable you to make?’, the majority are generally found not to
add value.
• Make sure there is a clear understanding of the key performance metrics that drive revenue and
profitability. Successful businesses have a maximum of 10. How many do you have?
• Ensure that the key performance metrics are presented clearly and consistently across your
company – from the board level, senior management (sales and marketing), regional and area
sales management and finally to the sales representative.
• Ensure that the right people are getting the right information. Don’t give them information they
don’t need.
• Ensure there are strong connections between what your company measures and what (behaviour)
is rewarded.
We have seen a number of companies embark on a change management process that requires a
behavioural change in a certain direction, only to see them measure and financially reward diametrically
opposed behaviour.
There are a number of performance metrics that are well worth measuring but only a few of these
should be selected to‘reward’teams or individuals. All‘reward’metrics should be part of those
determined relevant to drive revenue and profitability.
This report visually demonstrates a
forced number of targets per territory
(dark blue bars in column 2 are all
equal), versus calls to targets and
non-targets and required calls per
territory (column 3), and shows the
disconnect of this forced approach
versus brand sales and therapy area
sales in the last two columns.
ABOUT
IMS Health Commercial Effectiveness Services provide
the healthcare industry with strategic sales and
marketing consulting and outsourced performance
management services to help clients optimise sales
and marketing performance.
CONTACT
David Ledger
Principal, Commercial Effectiveness
Services, ANZ
Direct: +61 2 9805 6903
Mobile: +61 419 764 881
Email: DLedger@au.imshealth.com

8. ABOUT IMS HEALTH
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payers, government agencies, policymakers, researchers and the financial community. Additional information is available at www.imshealth.com
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