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  • Writer's pictureKarsten Schmidt

How to succeed in the market with optimal segmentation and targeting

Even though a standard approach to build segmentation matrices in Life Sciences exists there are some potential pitfalls in the process which need to be avoided in order to be successful in the market.

Here is a standard example of the two-dimensional approach of potential and propensity. Segmentation Matrix illustration

The vertical axis represents the overall potential (i.e. number of patients treated in a given therapeutic area) and the horizontal axis the proportion of patients treated with the promoted brand of the Life Sciences company.

Customer segments then often named into the categories like WIN or GROW, DEFEND or MAINTAIN and LOWER TIERS. While the GROW customers still need to be moved up the adoption ladder the DEFEND customers are already regular users or advocates of the product in the therapeutic area. Illustration of adoption ladder:

To establish both dimensions it requires the field intelligence which means that sales representatives capture customer profile data in their territories. This data is then processed by the central Commercial Excellence/SFE team in a thorough analytical exercise running statistical analyses on the profiling data and combining it with other available data sources like e.g. brick level sales data and prescription data. The outcome of this exercise will be a matrix to which all relevant HCPs will be mapped. It is important to decide on the cut-off points for both dimensions potential and propensity in order to build customer segments of appropriate sizes. The segment to which the customer belongs to will determine the amount of resources that will be allocated. Higher potential segments naturally receive a higher allocation of efforts i.e. number of interactions and multi-channel activities whereas the lower ones receive less efforts. The potential is a less dynamic dimension whereas the propensity dimension is the more dynamic one. This is due to the fact that the potential of a Healthcare professional is not expected to change significantly in a short time horizon of e.g. one year. In contrast within this same time horizon the adoption of a given brand can very well change if the sales representative can change certain attitudes and beliefs of the physician which until now have been standing in the way for a more pronounced product adoption. The sum of all planned calls should be in line we the call capacity of the promotional team. And the optimal team size should have been decided earlier already through a promotion response analysis (see also my previous articles published on Linkedin related to this topic). Now it is important to follow a Segmentation and Targeting (S&T) process as described below in order to avoid certain pitfalls.

Illustration of running the Segmentation and Targeting process and locking it down in the CRM system

After customer segments and target frequencies have been decided they should be locked down in the Customer Relationship Management (CRM) system. This will ensure that sales reps do not modify the segmentation and targeting matrix values which have been defined centrally by the Commercial Excellence / Sales Force Effectiveness team.

Taking this step will avoid situations like the ones depicted in the following two examples:

1.- A Healthcare professional is categorized as high-potential but due to limited access the sales rep grades him or her down to medium potential in order to establish a lower planned frequency. Instead the inital segment information and centrally proposed frequency for the customers should be kept/locked and then there should be separate fields in the CRM system with the frequency that the sales rep is committing to deliver as well a field which established the rationale for deviating from the centrally proposed frequency.

2.- High potential customers are downgraded or low potential customers upgraded in terms of their potential in order to make them “fit” with the call capacity of a given territory. This should not happen and and sales reps should be asked to do the profiling regardless of the call capacity in their territory as there will be the possibility to still adjust sales territories if workloads per territory are not balanced (see also my article on Linkedin related to territory alignments).

Overall, there should only be a small proportion of frequency changes upwards or downwards (between 5%-10% of the total number of targeted customers) if the inital analytical process has been done thoroughly. Also, as the centrally defined segmentation and targeting data is kept it is possible to quantify the magnitude of changes proposed by the sales team and the rationale for the frequency changes. Finally, the frequencies that the sales representatives are committing to need to be locked down in the CRM system prior to starting the next promotional cycle. Otherwise the “moving target dilemma” will impede proper tracking of call plan achievements which is an important lead performance indicator.

In some markets for certain types of Healthcare professionals (e.g. dispensing physicians, veterinarians, pharmacists) the level of company sales is well-known by sales representatives. From my experience this often has the consequence that sales reps tend to focus too much on defending existing business but do not put enough attention on exploiting opportunities for untapped potential. Consequently, growth opportunities may be missed.

In summary, both dimensions of customer potential and propensity and their derived segments need to be built in a thorough analytical process and sales representatives shall have the possibility to slightly fine-tune their interaction plans prior to the start of the promotional cycle. There needs to be a balanced approach between defending existing business and conquering new growth opportunities.

Is your Segmentation and Targeting process similar to the one described above? I would like to hear about your experience related to this topic. So please to contact me directly at for feedback.

Important pitfalls in the #Segmentation and #Targeting process to be avoided in order to be successful in the market. #SFEhashtag#Commercial Excellence #BusinessExcellence


Xeleratio Consulting Ltd.

We help Life Sciences executives improve sales performance with innovative best-in-class Business Excellence tools and methodologies . Expertise in Business Excellence has been gained with over 12 years of working in different global and regional roles in the Life Sciences industry.


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