The Hidden Revenue Opportunity

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Organic revenue growth in the pharmaceutical industry is getting increasingly more difficult to achieve. The irony is that that the majority of pharmaceutical companies are leaving 12%-35% of MAT revenues on the table each year. The challenge is to find the internal champion to engage the organization in pursuing this unrealized revenue as the causes and solutions cut across multiple departments. This leaves only the most senior levels to accept responsibility to initiate a program to both maximize revenues and minimize sub-optimal spending across all brands and all commercial departments.

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The Hidden Revenue Opportunity

  1. 1. Physician Brand Re-engagement The Hidden Revenue Growth Opportunity
  2. 2. Organic Revenue Growth – Increasingly Tougher to Find • Country Rx Growth – Zero / Single digit • Category Rx Growth – Flat • FM/GP Prescriptions – Increasingly Generics • Specialist Products – Hyper-competition • Pipelines – Fewer NCEs • Market Exclusivity – Months vs Years
  3. 3. The Irony • Hidden in the customer base of your promoted brands is an organic revenue growth opportunity worth between 15%-35% of MAT sales  At least 1/3 of this unrealized revenue is revenue the brand had last year and has lost this year.  Remaining 2/3 is revenue that should have been realized based on level of promotional activity • The promotional spending driving this unrealized revenue is equal to 8%-15% of MAT Sales
  4. 4. The Irony Yes… …I know it seems improbable
  5. 5. How Do We Know? Description Unrealized Revenue Sub-optimal promo Spending Top 10 Pharma Company 18% 11% Women’s Health Brand 40% 30% Biologic Brand 22% 20% Top 20 US Pharma 21% 17% Biotech - US 35% 18% GP/SP Brand 27% 12% • But it is true! • Results from six pilots - the findings are consistent
  6. 6. What is Physician Brand Re-engagement? • Brand re-engagement is a promotional opportunity associated with physicians demonstrating ZERO or NEGATIVE customer share growth over a 24 month period • Typically impacts 2/3 of a brand’s promotional targets • Typically the primary brand opportunity • Typically ignored by brand planning and sales activity
  7. 7. What is Physician Brand Re-engagement? • Therapeutic category agnostic • Lifecycle agnostic • Falls outside the traditional Acquire / Grow / Retain pharma opportunity model
  8. 8. Why is Physician Brand Re-engagement Important? • Unrealized revenue = 12%-35% of MAT revenues  Negative Growth = revenue the brand had last year but doesn't have this year  Zero Growth = revenue the brand should have earned • Often the primary brand opportunity  Opportunity ignored  Brand Planning  Sales Activity • Promotional spending delivering sub-optimal return = 8%-15% of MAT sales
  9. 9. Sales Marketing Analytics Training The Re-engagement Challenge: Cross-functional Solution Who is responsible for addressing this opportunity? YOU
  10. 10. What is the Impact of Brand Re-engagement • 2 key metrics requiring constant monitoring: 1. Level of unrealized revenue  Brand Level  Physician Segment Level 2. Level of promotional spending delivering a sub-optimal return  Including Cost of Acquisition vs Cost of Retention
  11. 11. 1 • Build the Business Case 2 • Data Driven Re-engagement Plan 3 • Execute & Track Physician Brand Re-engagement Solution Workflow
  12. 12. Typical Causes of Physician Brand Re-engagement • Analytical Skills • Sales Conversation • Targeting – Rank • Targeting – Frequency • Skills – Single Patient Focus • Perceives superior clinical value in competing brands • Opportunity Ignored • Clinical Relevance  Brand Positioning  Sales Messaging Sales PhysicianMarketing Internal External
  13. 13. Example – The Sales Conversation Industry Average Sales Conversation Performance 0 10025 50 75 33 Proficient SuperiorUnacceptable MarginalIneffective Results based on Sales Conversation Assessment Test
  14. 14. Example – Positioning Example Based on Current Project • Client Brand Positioning - 1st Line • Physician Brand Positioning - 4th Line Position Armamentarium Product Average Share 1 Brand “A” 63% 2 Brand “B” 27% 3 Brand “C” 18% 4 Client Brand 9% 4 Brand “D” 6% 5 Brand “F” 2% 5 Brand “G” 1%
  15. 15. In Closing What level of Unrealized Revenue & Sub-optimal Promotional Spending would motivate you to explore this hidden opportunity in more detail? ________% of MAT Sales ________% of MAT Sales Unrealized Revenue Sub-optimal Promo Spend ? ?
  16. 16. Unique bottom-up data mining process Not Really Hidden Wisdom - execution Knowledge - application Information - meaning Data
  17. 17. You Do the Math Promoted Brand MAT Sales = $___________ Unrealized Revenue (x 15%) = $___________ Sub-optimal Promo Spend (x 10%) = $___________ Can you afford to leave this revenue on the table? How will this level of unrealized revenue impact your 2014 revenue forecast? Can you afford this level of inefficient promo spending?
  18. 18. In Closing I look forward to continuing this conversation David Delong Chief Customer Evangelist (705)-733-0-739 ddelong@cmg-pharma.com

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