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All things Pharma

Market segmentation: the field’s perspective

By Baba Awopetu and Akin Sawyerr

 

 

Achieving ‘customer intimacy’ increasingly depends on synergies between field force and head office.
Market segmentation holds the key to achieving this.

WE HAVE ALL BEEN on the receiving end of wacky ideas from marketing departments, often disguised as strategies with names like ‘branding’, ‘customer relationship marketing’ or ‘one-to-one marketing’. Surely ‘segmentation’ is just the latest in a series of fads designed to keep marketers amused while disrupting the daily activities of the field force? This could not be further from the truth: our research into this area unveils some compelling lessons for the field force and marketers.

First, let’s clarify what is meant by segmentation. Most representatives readily accept the fact that all customers are not equal, whether in prescribing potential or in attitude. Often it is these differences that inject variety into the role. Segmentation is simply the ability to identify and capitalise on differences by serving groups of similar customers based on their needs.

Despite the furore over future models of the sales force, medical representatives operate at the critical customer interface. Therefore any development or adaptation of customer targeting processes must involve them or be doomed. Customer segmentation presents real opportunities to field representatives as well as head office strategists. It is an ideal opportunity to get closer to customers and deliver on the much-discussed ‘customer intimacy’ mantra.

Segmentation in action

The origin of a segmented approach to marketing goes as far back as the 1950s, and is a tried and tested business principle. For example, the washing powder market naturally segments itself around the benefits sought (e.g. whitening, freshness, bleaching, softening, stain removal). These are segments based on the needs of customers, and an attempt to segment this market based on usage or demographics would be far less effective.

How does this transfer to useful guidance in the pharmaceutical market? Remember the earlier point that all customers are not equal in terms of their needs – so meeting these needs effectively requires different marketing mix elements: differentiated messages, meetings and promotions.

Historically, the industry has not tended to utilise this grandfather of all marketing principles. However, it is increasingly being adopted by pharma executives as the mature market impacts. Reluctance to use it usually boils down to market peculiarities and the difficulty of implementing such strategies.

Our research has shed some light on this problem. Representatives regularly differentiate between their customers based on their needs. Here is a simple example of how one experienced representative segmented her customers in the field for more effective service delivery:

  • Clinical Clerks base their decisions on published clinical information that involves an in-depth look at head-to-head studies. These customers respond to engagements focused on clinical benefits and hard facts.

  • Hungry Harrys (aka the Munch Bunch) enjoy the social scene and getting together with colleagues for lunch and evening meetings. Clinical discussions are more productive over a meal after a meeting, and ensuing decisions are influenced by relationships.

  • Caring Joes always consider what’s best for the patients, so decisions are always viewed from the patient’s perspective. Engagements with these customers are productive when patient benefits are emphasised.

  • Me-Mes are interested in what’s best for them, so patient benefits are only a turn-on (or relevant) if linked to tangible benefits for them. Clinical benefits are best appreciated if they result in a gain for them, such as more time.

This representative employed different tactics in the field according to which segment she felt the customers were in. The appreciation of the underlying factors that made the customers tick enhanced the relationshipbuilding process and allowed resources to be deployed appropriately. Most representatives and marketers recognise the customer segments described above or similar ones – so where does the friction come from where implementation is concerned?

The wages of synergy

The knowledge that goes into identifying these segments must come from the representatives in the

 

 

field as well as the marketers in head office. One without the other will result in a sub-optimal view of customers. We know that segments are not a ‘one size fits all’ proposition: the approach varies according to therapy area, sales force size, culture and other market peculiarities. Segmentation will not give a definitive perspective on individual customers, but on clusters. It is a scientific art rather than a pure science. Accuracy is critical at a cluster level (groups of customers) rather than an individual level.

Alignment of sales and marketing means that marketers can design relevant programmes and core messages to serve specific segments of the market. Insight into the traits of each targeted segment will lead to innovative and differentiated activities to engage the customers. The field force can enhance relationships with customers through the delivery of bespoke engagement plans based on the needs of each segment. Research by Agnito has demonstrated a dramatic improvement in time spent with customers when a segmented approach is deployed.

Making it happen

Given the general agreement that market segments are real and important, is there a way to bridge the gap between field and head office? Marc Wells, Brand Manager at Lilly, offers a perspective: “Good attitudinal-based customer segmentation holds the key to effective communication of key messages and ensuring the most appropriate use of resources to impact on uptake and ultimately maximise ROI. Segmentation lives in the minds of everyone touching the brand and forms the basis of all decisions, from channel selection to message communication. It has been an extremely worthwhile exercise and has helped us become a lot smarter in what we are doing.”
Effective segmentation depends on:

  • Evidence base – although the data utilised are unlikely to be perfect, the robustness of the evidence that supports the approach must be communicated.

  • Training – due to the inevitable changes in practice, training departments need to implement relevant programmes to ensure that all involved are clear on the actions required and the benefits.

  • Involvement – the old adage ‘No involvement, no commitment’ is true here. Representatives must be involved in data collection, testing and research. This will ensure that their views and concerns are captured and can be accommodated in the implementation plan.

  • Rationale – mature markets, decreasing access and customer dissatisfaction are some of the reasons why segmentation offers a route to competitive advantage. Assume nothing: the field must be told why!

  • Simplicity – the strategy must be built around the goals and needs of the field force. Keep it simple to make it work! Resources and capabilities must guide the segmentation process, and the outcomes must be actionable.

  • Reinforcement – naming the segments and using these names in ensuing communications will reinforce the message and demonstrate commitment from head office, as well as injecting an element of fun into the process.

  • Share success – early successes at a segment level should be communicated to reassure any doubters.

Segment or die

When applied properly, segmentation represents a win-win scenario. Sales teams benefit from an improvement in their contact and interaction with customers. Marketers can deploy relevant strategies to complement the field force’s efforts. The impact of this alignment on performance should not be underestimated. Given ongoing issues with access, time with customers and slowdown in product introduction, the case for adopting segmentation is compelling for both sales and marketing teams. Segmentation will ensure that the needs of customers, workforce and organisations are met.

The path to a segmented and successful future is laid out. Those yet to adopt it must get up to speed or suffer the consequences. In an unforgiving environment, we all need to adapt in order to survive. The success of market segmentation depends on the effective involvement of the field force.

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