best practices in launch optimization: how promotional efficiency can be leveraged to support...

BEST PRACTICES,

®

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Best Practices, LLC Strategic Benchmarking Research & Analysis

Best Practices in Launch Optimization: How Promotional Efficiency can be Leveraged to

Support Multiple Products & Indications

BEST PRACTICES,

®

LLC

Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Research Overview

Participating Companies

Key Trends Observed

Franchise Value Pyramid

Detailed Key Findings & Insights

Level 1: Reducing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Level 2: Gaining Efficiencies & Boosting Productivity Levels. .35

Level 3: Growing the Top-Line. . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Level 4: Enhancing Corporate Reputation. . . . . . . . . . . . . . . . . 73

Critical Franchise Risk Points. . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Appendix: Participant Demographic Data. . . . . . . . . . . . . . . . . 82

About Best Practices, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

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Copyright © Best Practices , LLC

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Key Topic Areas Examined Include: Study Overview

Managing Similar Products or an Integrated

Product Portfolio

Optimizing Sales Resources within Franchise

Operations

Leveraging Resources for:

Sales Force Alignment & Training

Sales Samples & Collateral Management

Efficient Customer Targeting

Better Territory Alignment

Sales Force Effectiveness & Span of

Control

Sales Management & Analytics

Combining Resources for Efficiently

Marketing Multiple Products with Similar

Indication

Optimal Brand Team Approaches for

Product Franchise

Project Overview and Research Methodology

Best Practices, LLC conducted this benchmarking study to identify evidence-based benchmarks on the

pros and cons of managing multiple products via a franchise approach. The study focused on

uncovering proven tactics for efficiently deploying Sales and Marketing resources to reduce the

costliness of launching and promoting multiple products simultaneously.

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Research Objective: The study distills effective

approaches to leveraging and pooling launch and

promotional resources, employing efficient sales

and digital marketing technologies and applying

other innovative promotional approaches to

support integrated product portfolios or franchises.

Research findings can serve as a reference point

for portfolio managers to most efficiently manage

multiple products and indications in the same

therapeutic area.

Methodology: Best Practices, LLC engaged 65

Sales, Marketing, and Commercial leaders at more

than 50 companies through a benchmarking

survey instrument.

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Universe of Learning: Participating Companies

Many organizations have faced the “good problem” of a rich pipeline featuring multiple

similar products to support and promote. Sixty-five executives from 52 leading healthcare

organizations participated and provided experience-based insights for achieving optimal

franchise management.

4


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Building a “Franchise Value Pyramid”

Franchise managers maximize the value of portfolio assets in four distinct but

complementary ways: 1) reducing the average cost of supporting each product, 2) gaining

efficiencies across the franchise, 3) driving revenue growth across products, and 4) reaping

the reputational rewards of therapeutic area leadership.

Level 2. “Gain Efficiencies &

Boost Productivity”

Level 1. “Reduce

Costs” • Greatest Cost Savings Area =

The Field Sales Force (Size, Training, & Effectiveness)

Leverage

technology

Level 3. “Drive Top-Line Growth”

Level 4. “Enhance Corporate Reputation

as Therapeutic Area Leader”

• Smarter Sampling

• Better Customer Targeting

• Single Brand Team

• Shared Performance Analytics

The Franchise Value Pyramid: •Improved Access & Reputation

• HCPs willing to use portfolio products

• Shrink Territories at Launch

• Supplement SF w/ Specialist Teams

5


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Key Findings: Reducing the Cost of Supporting

Multiple Products

• Franchises Are Highly Successful in Driving SFE, Credibility, Access, & Lower Promotional

Costs: 62%of companies have been highly successful in increasing SFE, and a majority have

had strong success in bolstering rep/company credibility and improved access to physicians.

Almost 90% of research partners rated “enhanced sales for all products” and “greater therapeutic

area market share” as modest franchise successes.

• Sales Force Size, Training & Effectiveness Offer Greatest Cost Savings Opportunities: The

greatest factor affecting the cost of supporting any pharma product is sustaining a sales force.

Thus, companies achieve the greatest net cost savings in an integrated product franchise by

improving sales force effectiveness (58% of benchmark respondents), reducing sales force size

(57%), and improving customer targeting (57%).

• Remove Redundancies in Sales Force Size & Customer Details: The most effective

redundancy-removal areas to explore include sales performance analytics (48% highly effective),

rep training (42%), and customer targeting (40%). Companies can benefit from redundancy

removal in sales force size (i.e., not adding another full sales force for new products) and

customer details – which received strong effectiveness ratings.

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The following key findings regarding cost reduction through superior franchise

management emerged from this research.

1.0 Reducing Costs:

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Franchises Are Highly Successful in Driving SFE,

Credibility and Access Sixty-two percent of companies have been highly successful in increasing SFE, and a majority have had strong success in bolstering rep/company credibility and improved access to physicians. Almost 90% of research partners rated “enhanced sales for all products” and “greater therapeutic area market share” as at least moderate franchise successes.

Q. Please indicate in which areas you have been successful as a result of managing similar products as part of an

integrated product franchise.

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Evaluating Franchise Benefits:

4%

4%

4%

4%

15%

8%

15%

19%

12%

8%

8%

12%

28%

35%

35%

19%

31%

31%

27%

42%

50%

52%

58%

48%

42%

46%

62%

58%

54%

54%

46%

42%

36%

31%

24%

23%

15%

Increase effectiveness of Sales organization

Increased credibility for company and sales rep within therapeuticarea

Improved physician access

More motivated Sales team

Enhanced corporate reputation within marketplace

Lower costs of launching and promoting each product

Enhances sales momentum for all products

Greater market share in franchise therapeutic area

Better formulary access

Reduced overall size of field sales force required

Easier to enroll physicians/patients in clinical trials for thatTherapeutic Area

Unsuccessful Neutral Somewhat Successful Highly Successful

26

26

26

26

26

26

26

26

25

26

26

(n=)

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The

Franchise

Reducing Costs across the Franchise: Where

to Begin?

Marketing

Patient Support

Training

Zocor

Customer Targeting

Centers of

Excellence

New Product Planning

Sales Force

Market Research

No two franchises are exactly alike. There are many ways and many areas in which to

cut costs. The biggest driver of absolute cost reduction for a franchise involves the field

Sales force.

Managed Care

Med Ed Digital

Thought Leaders

Therapeutic Area

Business Intel

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“Develop a one, three & five year plan to avoid

making sales force changes too often as a

reaction to market changes.”

-- Senior Director, Marketing Operations

“Reduce sales force size!”

-- Commercial Excellence Mgr

““Define the

organization

based on

customer

needs.”

-- Nat’l Sales

Manager

Reducing

Cost 1.1

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Newly

Launched

Product

New

Compound

Mature

Product

Use Shared Sales Visual Aids to Drive SFE across

Franchise & Reduce Costs

Cost Reduction:

“Less cost with better

impact & higher efficiency”

-- Country Manager

“Saved cost , improved

efficiency” – President

“Decrease platform costs” -

- Senior Product Manager

“Using the same agency to

produce several digital

assets saved money.” --

Marketing Innovation

Manager

Increased SFE:

“Only tool to increase our

SOV” -- Head Marketing

“It improves the overall

branding” -- Key Account

Manager

“Since it’s the same

molecule, makes sense to

combine the sales

aid/selling story” --

Director, US Marketing

Sciences

“To make it easier for

doctors understand the

portfolio approach.” --

Product Manager “Enables focus on a lead product and supporting products, limits duplication of

therapy area/ disease awareness messages. Enables better positioning of

products within the same indication.” -- Product Manager

Shared sales visual aids are a proven way to economically boost Sales Force

Effectiveness. As one executive said: “[They are] the only tool to increase our Share of

Voice.”

Reducing

Cost 1.13

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Common & Modular Training Combined w/ Disease State

Education Can Leverage Sales Force Training Resources

More than half the benchmark class is effectively using common resources for both core and modular training. Using shared disease state education information and other curriculum for multiple indications across sales forces was also rated effective by virtually all respondents.

(n=21)

Q. Please rate the effectiveness of combining and leveraging resources for the following tactics for promoting multiple

similar products in the same therapeutic area.

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Efficient Sales Force Training:

57% 57% 48% 43%

19%

38% 29% 48%

48%

62%

4% 5%

10%

5% 14%

4% 10%

Common Training +Breakout Training:Core training for all

sales forces +differentiated

breakouts by customeror patient type

Modular Training:Insert spot materials

for unique differencesby indication/product

rather than newcourses

Disease StateEducation: Samematerials to cover

multiple indications

Sales Curriculum:Same materials for all

sales forces

Trainer-to-Rep Ratiosrise / fall depending onlaunch or performance(e.g., 1:200 at launch

and 1:500 post launch)

Highly Effective Somewhat Effective Ineffective Don't Use

Efficiencies

2.2

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Primary Care Franchises Can Carry Larger

Spans of Control for DMs & Trainers Franchise regional directors manage an average of 26 people, DMs manage 10, and sales trainers oversee 24. Primary Care sales forces are better suited for leaner span of control ratios – averaging 15 personnel managed by DMs and 50 by trainers (compared to 10 and 12, respectively, for Specialty Care).

Q. Please estimate the number of people managed at each level in your sales organization serving your multi-product

portfolio.

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Sales Span of Control Ratios

(Total Benchmark Class):

Regional

Directors District Managers Sales Trainers

Max 1 : 100 1 : 56 1 : 200

75th Percentile 1 : 34 1 : 10 1 : 20

Mean 1 : 26 1 : 10 1 : 24

Median 1 : 7 1 : 8 1 : 6

25th Percentile 1 : 3 1 : 4 1 : 2

Min 1 : 1 1 : 2 1 : 1

1 : 80-100 1 : 8-12 Not Sure

Efficiencies

2.8

Research Note:

Primary Care Segment

RDs – 1 : 31

DMs – 1 : 15

Trainers – 1 : 50

Specialty Care Segment

RDs – 1 : 31

DMs – 1 : 10

Trainers – 1 : 12

(n=7)

(n=7)

(n=18) (n=16) (n=15)

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Most Franchises Use a Single Brand Team for

Each Indication A majority of companies (58%) use just one brand team to manage multi-product franchises serving a single indication. If a company uses a separate brand team for each product indication, it is much more likely to work closely with the other brand teams in the franchise than it is to operate in a vacuum.

(n=40)

Q. How does your organization structure the brand teams associated with a product /molecule that treats multiple

indications?

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Brand Team Structure Used for Multiple Products/Indications:

A separate brand team for each

product/indication, with no interaction on

the franchise level, 8%

A separate brand team for each

product/indication, with significant

collaboration on the franchise level, 30%

One brand team for all products/indications,

58%

Other , 5%

Efficiencies

2.16

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40% of Benchmark Franchises Have Multiple

Products Competing Under One Indication Multi-product franchises come in different shapes and sizes. Forty percent of benchmark companies have franchises which consist of multiple products competing to serve the same indication, while others support products derived from the same molecule but with different brand names or indications. Regardless, all franchise managers seek to maximize market share through shrewd resource allocations that give each product the best chance to succeed.

(n=62)

Q. Which of the following best describes your product franchise profile?

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Franchise Type:

2%

6%

11%

11%

13%

16%

40%

Same molecule / same brand name formulated fordifferent patient sub-populations (e.g., extended release;

pediatric, etc.)

Same molecule / different brand names marketed fordifferent therapeutic areas

Multiple products sharing a common method of drugdelivery

Fixed Dose Combination (same molecule combined withother active ingredients, e.g. Cholesterol reducer +

Hypertensive)

Same molecule / same brand name formulated fordifferent indications

Different products under different brand names developedfrom same molecule

Multiple products competing to serve same indication

Growth

3.1

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Benchmark partners give voice to the importance of targeting – in multiple dimensions –

as a critical success factor. Superior targeting drives reduced costs, increased efficiency,

and better uptake at launch.

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Voices From The Field: Superior Targeting Is

Key to Cost Efficiency & Growth

“Increased promotional effort on higher

decile targets at launch in specialty

offices. Added extra resources at PCP

level required a re-alignment of

territories.” -- Senior Director, Marketing

Operations

“Smaller territories with more number of

specialties & higher frequency of

coverage” -- Country Manager

“Expanded to cover extra urban space to explore the

potential by reducing low/no contributing customers

within the urban space” -- Head of Marketing

Growth

3.7

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Marketing & Business Units Play Chief Role in Leading

Franchise – with Some Sales Backing While drawing on the skills and insights of many other groups, franchises are generally led by Marketing (72%) and Business Units (59%). New Product Planning, Global Product Strategy, and especially Sales also help lead franchises at one-third of organizations. As one Senior Marketing Director told us: “Get sales leadership buy in from the start - involve them in every aspect , from market research through tactical support creation.”

(n=)

Q. What role does each of the following groups play in managing your integrated product portfolio?

15


Portfolio Team Structure:

64

61

64

60

60

62

61

62

2%

7%

9%

13%

7%

6%

26%

6%

27%

34%

53%

52%

63%

74%

56%

77%

72%

59%

38%

35%

30%

19%

18%

16%

Marketing

Business Unit / Therapeutic Area Leadership

Sales

Global Product Strategy

New Product Planning / Commercialization

Business Intelligence

Managed Markets

Market Research

No Involvement in Product Portfolio Management Support Role Lead Role

TA Leader

4.1

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Best Practices, LLC 6350 Quadrangle Drive, Suite 200

Chapel Hill, NC 27517

www.best-in-class.com

About Best Practices, LLC

Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics, and winning strategies of world-class companies.

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