Loss of exclusivity (LOE) may prompt marketers to make a binary choice— either personal promotion is on or off at the healthcare professional (HCP) segment level1 —but this is not the only, or even the best, approach.
A brand should be in “harvest mode” when approaching LOE. Maximizing ROI is typically the primary focus, not just cutting costs (i.e. eliminating personal promotion, which is the most expensive tactic). This assumes that the mature brand is not part of a franchise portfolio, where the impact on other brands must be considered.
THE RIGHT MIX
Approaching the brand with the goal of maximizing ROI does not necessarily lead to a binary decision around personal promotion. More likely, it should lead to investment allocation and channel mix optimization well before LOE. The channel mix, a ratio of personal and non-personal promotion, will likely change in step with marketplace dynamics and the maturity of the brand.
Additionally, the overall investment into HCPs should and will change. Consider this more strategic approach:
- Start an investment-allocation and channel-mix approach early in a brand’s lifecycle.
- Build a robust customer-level view to include channel preference, patient audience profile, managed care index, and a lifetime-value metric (based upon the current or potential HCP value).
- Continue adjusting the investment allocation and channel mix throughout a brand’s lifecycle at the individual customer level. Individual HCPs will have to be assigned to logical segments for tactical execution.
As the brand matures, personal promotion will decrease as the investment allocation and channel mix are adjusted to maximize ROI. The HCP’s past prescribing behavior in response to various sales and marketing activities will provide insights to future behavior. The HCP’s prescribing history with similar brands undergoing LOE will provide insight to the prescriber’s future script behavior.
GRADUAL ADJUSTMENT
Will personal promotion decrease? Absolutely. Will it be a binary decision to suddenly turn off all personal promotion, even within a specific segment? Not likely. Personal promotion will be continually dialed down and back-filled with non-personal promotion for those HCPs who are affected by non-personal promotion…until personal promotion is eliminated altogether. For loyalist HCPs, the brand may continue with non-personal promotion right up until LOE. The goal of the approach is to continually optimize brand sales and marketing spend for maximum ROI.
In order to be successful with this approach, there are several prerequisites:
- First, create an historical record of HCP-focused marketing tactics to enable an analysis for investment-allocation model development and channel-mix optimization. Fortunately, a mature brand has likely conducted some level of multi-channel marketing, which it can leverage. The typical challenge is compiling the transactional promotion and response data, as this information often has been left with the channel vendors that implemented the marketing tactics.
- Second, the organization must have adopted the goals of maximizing ROI for overall sales and marketing investment, and reducing physician details while increasing non-personal promotion as an acceptable means to this end. Organizational considerations must to be taken into account before enacting these changes to sales and marketing to maintain the morale and effectiveness of the organization’s sales force.
- Finally, a robust process for executing multi-channel marketing must be in place to enable targeting more responsive HCPs at the right time with the right message in order to drive a change in prescribing behavior.
This phased approach, properly executed, maximizes the product value, even at the end of its patent life.
1. Reed, L.D. (2011). Patent expiring? When to pull the plug on personal promotion. PM360 Aug. 2011, p16.
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