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Bayser Consulting
Skokie, IL 60076

Dear Professional:

I’d like to share with you some of the expertise and wisdom we have accumulated over the years by repeatedly addressing a handful of sales and marketing issues for a slew of clients. If you are involved in targeting, sales force deployment, incentive compensation, physician training, and licensing/acquisition business opportunity, read on, this is for you.

Targeting – Which hospitals to target?

We use hospital-level data such as ICD-9, DRG, CPT-4 procedure/diagnoses to gauge the activity of the establishments relative to certain therapeutic areas. Needless to say we are cognizant of the caveats involved in the data sources when articulating analyses to bring to bear. In several instances, we draw upon physician-level data to zero in on physicians that fulfill certain criteria and use hospital affiliation information to “translate” those physicians back to hospitals to target. One of our favorites is unequivocally prescription activity at the physician level from IMS and NDC. Their products, respectively Xponent and Source Prescriber, indicate for each physician the number of prescriptions written by drug in a given time interval. Say you want to identify prominent physicians involved with heart procedures. In that case, you would track prescriptions of Amioderone, CCB’s, ACE’s, diuretics, beta-blockers, ARB’s, and the like. Other useful sources include membership lists of associations (e.g. CVS, NASPE), participants of training programs (e.g. TCTOnline), subscribers of journals and magazines, and so on.

We typically leverage the 80-20 rule, a.k.a. as Pareto rule, when defining target lists. The Pareto rule, as you recall, stipulates the bulk of the business is done by a relatively small number of accounts, suggesting that the long list of minuscule accounts may not be worth pursuing. Indeed, we rank order candidate facilities by activity and target the top accounts based on a cut-off that strikes a good balance between the cost of covering the account and the marginal business that can be gained by calling on that account.

Sales Force Deployment – Sizing, Alignment, and Comp

What’s the right number of reps needed? Too few reps means leaving money on the table and inviting the competition to make inroads. Too many reps, on the other hand, directly takes away from the bottom line. To establish the optimal size, we start by analyzing the underlying market dynamics. We look at the market structure and outlook (concentration, number of players, adequacy of current offering, unmet needs), competitive strategy (positioning, new entrants, upcoming technology), and the actual sales call (requisite skills to close the sale, product knowledge, size of the bag the rep has to carry, etc.). We then conduct workload build-up and/or promotion response analyses to establish the recommended size of the sales force.

Territory alignment consists of establishing which target accounts should go to which rep. Practically, this means cutting up the country in territories. To leverage the rep’s ability to service accounts, the territory needs to be designed so accounts of the territory can be covered in a time-efficient manner. In many instances, this can be achieved by an astute selection of the accounts that will make up the territory. In other instances, one has to resort to rep relocation, hiring of additional reps so bring down the territory to a more manageable size, or dropping of small and far-away accounts, etc. To that end, we routinely use mapping and automatic alignment tools, some of which are homegrown. A jumbo printer prints out crisp 3’ x 4’ color maps that are used both as working documents during the alignment process and as framed wall maps once the alignment has been finalized.

Incentive compensation plans spell out how much the rep will make in addition to the base salary (commission, bonus, spiffs and the like). Depending on the dynamics at play, the rep may be paid on sales, growth, gross margin (based on an official COGS that may have little to do with the actual COGS), incremental performance above plan, or a combination of the above. When putting together a comp plan, one has to make sure the rep has the ability to grow the territory and make money. This may be a challenge when the territory has been cut up more than once as a result of expansion. The comp plan should make defecting to the competition not such an attractive option. Indeed, ample care is in order when handling the very top earners of the sales force. We have been involved in developing quite a number of comp plans. Simulation is arguably the best approach. First, we forecast territory sales under a given comp plan. Second, we compute the payout based on that plan. Third, we evaluate the adequacy of the plan by looking at multiple things: total payout vs. company objectives, payout comparisons among reps, current payout vs. future payout for each rep, etc.

Training – Who and what format?

Forget about sales if the physician does not know how to use the device. Because training is such a large ticket item, it is worth making sure we get training right. This means establishing the actual list of physicians to be trained, the location of the training, the format of the training (e.g., one-on-one, group of 8-12 physicians, large conferences in attractive places involving spouses, etc.) and what format is more appropriate for which physician profile (freshly minted from medical school, senior partner in a practice, head of hospital, already trained on competitors’ products, etc.). We have indeed done several client projects to measure the impact of training on sales and establish who needs to be trained and under what format. Many of the analyses we conducted involved tracking the sequence of procedures performed upon training, and explaining the uptake pattern in terms of training format the physician underwent, geographic location of the training, and physician characteristics such as number of procedures under the belt, years of practice (old physicians tend to be set in their ways), specialty and subspecialty, hospital affiliation, etc.

Business Opportunity Identification – Who to contact?

Grow the business! Grow the business! Grow the business! To honor this winning mantra, one needs to be abreast of the devices that are out there and be able to effortlessly contact those offering them. Indeed, that one device or company may be that long sought opportunity that fits snugly in the company’s portfolio, is aligned with the company’s objectives, and will fuel that next growth spurt of the company.

We have a database of all the devices that are marketed in the US (in excess of 100K devices) with contact names.  It may be worth taking a peek at. We run custom analyses depending on what you are looking for.

*****

By the way, I am Jean-Patrick Tsang, the president and founder of Bayser, a consulting firm dedicated to sales and marketing for pharmaceuticals, medical devices, and diagnostics companies. If the above relates to what you do and you wish to explore further the issues we touched upon, give us a call at (847) 920-1000 or send us an email at bayser@bayser.com. Our web site http://www.bayser.com/ has some information on our practice for your review.

 

Yours truly,

Jean-Patrick Tsang
President of Bayser

 

Testimonials:

“One of the brightest individuals that I've met in my career. JP has an incredible skill regarding simplifying issues, and preparing presentations for senior management." -- Director, Large Pharmaceutical Company

“Extremely brilliant and gets it right away.” --Director, Large Pharmaceutical Company

“Very professional!” --VP, Large Medical Devices Company

“JP and I are a great team. I get all kinds of ideas and he gets them implemented.” --VP, Large Pharmaceutical Company

“Always does quality work.” --Director, Large Medical Devices Company

"The amount of knowledge that they bought, not only about their tools but about the industry & tool applications.” --Market Researcher, Large Pharmaceutical Company

“I am very pleased with Bayser’s work. ” --Director, Large Diagnostics Company

“A real guru at Excel. Taught me everything I know about spreadsheets.” --Account Manager, Large Diagnostics Company

Reaction to a demo of Bayser’s Rx Tracker: “I am having an out-of-body experience right now.” --VP, Large Pharmaceutical Company

 

 

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