Carlos Grzelak Jr.

South America SFE Congress

Buenos Aires

2008,October

Carlos Grzelak Jr.

Theory Practice

3 years Sales Representative - Field6 months Training Associate - Internal2 years DM - Field2 years SFE Manager - Internal2 years Regional Manager - Field3 years Sr SFE Manager - Internal1 year Sales Force National Manager - Field

Carlos Grzelak Jr.

Answer :

When you have a direct correlation between metric and result.A metric must have power to help on decision making

process,show direction, reveal diagnostic

What is an effective metric?

For Sales Area :

if metric results are good

MORE SALES

Traditional sales force effectiveness metrics can lead to poor decisions and may not reveal the truth

Sales force lever Traditional metric Problem

Targeting Percent of market covered

Quintiles

Doesn’t assess quality of target selection, can lead to excess investment

Lack of details to define approach

Frequency Calls per day Leads to high reach strategy, focus on “easy to see” doctors, pencil whipping

Message Impact Intent to prescribe Measure not necessarily correlated to impact of calls

Marketing program evaluation

Number of programs conducted; number of attendees

Doesn’t assess quality of attendees or ROI on programs

Carlos Grzelak Jr.

Example

Effective metrics are available, even in less data-rich markets.

Sales force lever Traditional metric Better metric

Targeting Percent of market covered,quintiles

Based on segmentation

Frequency Calls per day Percent of target doctors seen with desired frequency

Message Impact Intent to prescribe Message recall/retention

Marketing program evaluation

Number of programs conducted; number of attendees

Attendees by segment,atendees’ Rx share evolution, market share evolution

by selected bricks

Carlos Grzelak Jr.

Example

Sales process complexity

Targeting

Marketing Programs

Frequency Message

Alignment

Disruption

Meetings

Carlos Grzelak Jr.

Sales

Carlos Grzelak Jr.

Organizing the Key Elements – Sales Force approach

Internal factors

External factors

1

2

3

4

5

6

Sales Force size/ structure

Customers panel composition

Resource Allocation

Call Effectiveness

Results

Internal and External Customer’s

satisfaction

Carlos Grzelak Jr.

Metrics/tools may help to follow up all steps…Sa

les

Forc

e S

tru

ctu

re Sales Force Size/Structure

Tools:RMCI,IMS,ZS, MDECS, internal

Territories Deployment

Tools:TMS,MAPS,internal

Important:territoriesbalance

Cu

sto

me

rs p

ane

l Segmentation

Rx profil. x Potential

Loyalty x Potential

Behaviour x potential

Needs x potential

Tools :Advizor,Excel,Access

Survey

Tools:KXEN,SAS,Excel,Access

Re

sou

rce

Allo

cati

on

Calls by segmentFrequency and Coverage

Samples by segmentGimmicks by segmentInvitations by segmentEducational support by segmentIncentive Plan

Carlos Grzelak Jr.

Metrics/tools may help to follow up all steps…C

allE

ffe

ctiv

en

ess Message recall and

Message retention

Sales skills

Product knowledge

SR competencies

DM Field Days

Disruption level

Re

sult

s Rx evolution

SOM evolution

Demand evolution

Quota coverage

Marketing Prog ROI

Cu

sto

me

rsa

tisf

acti

on

Internal Customer survey

External customer survey

SALES

Carlos Grzelak Jr.

Smart Resource Allocation project tackles 4 elements

Internal factors

External factors

1

2

3

4

5

6

Sales Force size/structure

Customers panel composition

Resource Allocation

Call Effectiveness

Results

Internal and External Customer’s

satisfaction

Carlos Grzelak Jr.

New metrics introduced to sales force

1.Calls by segmentFrequency and Coverage

2.Samples,invitations,gimmicks,... by segment

5.Rx evolution bymoving quarters

6.SOM evolution bymoving quarters

3.Message recall and Messageretention

4.Disruption level

Resource Allocation Call Effectiveness Results

Carlos Grzelak Jr.

1.Calls by Segment - Frequency and Coverage

Frequency: % of MDs getting the desired number of calls in a selected period ( ex: three cycles)

MDs point of view is what matters

Coverage : % of MDs getting the desired number of calls in one single cycle

Carlos Grzelak Jr.

Cycle 1

1 2 3 4 5 6 7 8 9 10

Coverage: Frequency:90% 90%

Frequency x Coverage

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

Cycle 2

1 2 3 4 5 6 7 8 9 10

Coverage: Frequency:90% 80%

Frequency x Coverage

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

Cycle 3

1 2 3 4 5 6 7 8 9 10

Coverage: Frequency:90% 70%

Frequency x Coverage

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

• Frequency – Tactical implementationFrequency at Chiesi Brasil is measured by moving quarters

- Each Single call MD must be called 3 times in 3 cycles- Each Double call MD must be called 6 times in 3 cycles- 20% of MDs – Drs A - are currently double called- Chiesi objective : 90% A 80% B 70% C

A new report was developed to allow DMs strict follow up , as seen below:

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

• Coverage – Tactical implementationCoverage is measured by cycle

- Single call Drs are “covered” after being called once or more times in a cycle

- Double call Drs are “covered” after being called two or more times in a cycle

- Chiesi objective : 90%

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

Why is important to “tie” frequency and coverage?

•To avoid bad sequencing and long time with no calls for some Drs

Some ETMS tools provide a way to easily control sequency

Ex : TARGET – Cegedim Dendrite

•To assure a good level of calls per day and more calls by segment

Calls per day is linked to Frequency and Coverage performance ,it’s a secondary metric

Good frequency + poor calls per day is better than good calls per day + bad frequency

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

No impact

More callsthan

necessary

An additional callgenerates impact

Ideal frequency

Calls

Rx

Is there a limit for the number of calls per MD by cycle ?

1.Calls by Segment - Frequency and Coverage

Carlos Grzelak Jr.

How to find the ideal one ?

1.Calls by Segment - Frequency and Coverage

•Depends on the market. When 3,4 or more calls per cycle makes sense:

•Market with high level of competitiveness+

•No relevant differences among competitors+

•Products /diseases with low level of complexity+

•MDs accept multiple calls

•Ex (for Brazil) : anti-inflammatory and anti-histaminic markets

Carlos Grzelak Jr.

Tracking

1.Calls by Segment - Frequency and Coverage

Rx share

evolution

2007 x 2006

MDs

calls/year

MDs

7 calls/year

MDs

10 calls/year

MDs

14 calls/year

MDs

20 calls/year

MDs

25 calls/year

0,5

1,0

1,5

2,0

Carlos Grzelak Jr.

What’s behind frequency ?

• % of MDs “seeing” SReps and being impacted by the message with right frequency – Analysis of the customer point of view

• Sales Rep : planning and organization skills are demanded

• Vacant sectors are considered (MDs are not being “impacted”)

• Hiring process must be accurate – bank of candidates

• DSMs must eliminate unnecessary meetings with Sales Reps

1.Calls by Segment - Frequency and Coverage

It can be adapted to your business needs – number of calls by segment,period

for frequency evaluation,less or more rigid rules,...

Improving frequency = Sales Increase = ROI

Carlos Grzelak Jr.

2.Samples,gimmicks,…, by segment

•Data is extracted monthly from ETMS – TARGET - to monitor resourcesdelivered to A,B and C MDs

•Smart Resource Allocation definition : A › B › C

• Each segment requires a different approach

•Segmentation was conducted by product (10 promoted products)

•For big events or small meetings only A and B MDs are invited

It depends on how segmentation matrix was built. Sometimes each segment

may requires a different type of material (ex: Behaviour x Potential)

Improved resource allocation = ROI = Sales increase

Carlos Grzelak Jr.

3.Message recall and Message retention

PM SRs/DMs MD

Message leakage

How much (?)Message leakage

How much (?)

Carlos Grzelak Jr.

3.Message recall and Message retention

Message Recall: % of MDs who recalled the core messages – unaided survey

Message Retention: grade obtained by Sales Rep/DSMs in a single test

Message – Tactical implementation

•Cross-functional teams to review product messages – Marketing, Medical, Training and Sales

•Sales training is based on delivering the message with consistency

•Message recall may be conducted – by phone - at least twice a year (1st wave/Baseline and 2nd wave)

•30% of recall index is a standard

•90-100% standard for message retention

Carlos Grzelak Jr.

3.Message recall and Message retention

There is a strong correlation between message and market share

Recall is the only directly measured indicator and a good

proxy for overall long-term performance

R² is an excel

function that

tells you

strenght of

correlation .

From 0,6-1(max)

correlation is

considered very

good

SOM

Region 1

Region 2

Region 3

Region 4

Region 5

Recall

index

Carlos Grzelak Jr.

3.Message recall and Message retention

Message recall is a very rich metric.Behind a high recall normally there is a high

frequency and a high message retention level. The only way to have bad results

linked to a high message recall is when the message is bad

High Message Recall = Sales increase = ROI

• Integration of Marketing, Sales, Training, Medical and Customer areas

• Sales Reps more focused, going straight to the point

• Product Managers must follow a method before launch new detail pieces ( focus groups and field tests with detail pieces required )

• A very good way to diagnose the situation and promote adjustments : Sales Rep?Detail piece?What changes are required to improve message transmission ? What changes are needed to sell more ?

What’s behind message?

Carlos Grzelak Jr.

4.Disruption level

Disruption : % of links MD-Sales Rep disrupted between two time periods

Ex: Current cycle x previous cycle ; current year x previous year ; After restructure x before

Breakdown of different type of disruption:

•Disruption due to Sales Reps turnover•Disruption due to MDs that were changed between Reps•Disruption by territory,district,region,whole country•Distribution of disruption across the sales force (detect potential problems)

Carlos Grzelak Jr.

4.Disruption level

What’s behind Disruption?

•Impact of relationship between Sales Rep and MD on results

•Sales Reps turnover

•Possibility of measuring the impact due to a restructure process *for products with carry over = 80% , it’s estimated that 5-10% of disruption

after a restructure impacts sales only by 0,6 to 2%

When everything seems to be good but results do not come up, maybe

Disruption index may give you an input. This is a technical way to measure the

Relationship factor,which cannot be ignored

Carlos Grzelak Jr.

5.Rx evolution by moving quarters

•Objective is to show progress in a dynamic way

•Aligned with frequency measurement (moving quarter)

• Individualize strategy by MD according to Rx profile

•Focus on Rx share,not number of Rx

•A tool was delivered to DM allowing multiple analysis

•Three last moving quarters available at Sales Rep handheld

Carlos Grzelak Jr.

6.SOM evolution by moving quarters

•Objective is to show progress in a dynamic way

•Aligned with frequency measurement (moving quarter)

• Territory SOM is compared to district,region and country

• Measured for all promoted products

•Evolution and SOM general index is calculated also

• A yearly based report SOM and Evol. 2008 x 2007 ) will be generated to

evaluate 2008 performance as a whole

Carlos Grzelak Jr.

Smart Resource Allocation – Implementation status

1.Calls by segment G4 A B C

Clenil A Now 59% 24% 17%

Before 32% 29% 40%

Manivasc Now 38% 53% 9%

Before 28% 52% 20%

Zyxem Now 56% 35% 9%

Before 29% 54% 17%

2.Samples by segment G4 A B C

Clenil A Now 61% 24% 14%

Before 38% 29% 33%

Manivasc Now 46% 47% 7%

Before 33% 50% 17%

Zyxem Now 61% 32% 7%

Before 37% 47% 16%

Best implementation

Best implementation

Best implementation

Best implementation

Carlos Grzelak Jr.

3. Message•Key messages changed in June 08 (respiratory : only fine tuning)

•Message recall to be conducted at the end of the year

•Messages to be inserted on handheld screen

Smart Resource Allocation – Implementation status

4. Disruption•From over 10% in 2007 to less than 5% average

5. DDD by moving quarter•Monthly report to DMs in place

•To be available also in the handhelds

6. Rx share by moving quarter•A tool was delivered to DMs to build all kind of analysis

•Rx share by quarter(last 3 quarters) available to Sales Reps at handheld

Carlos Grzelak Jr.

Does it increase sales ?

G4

Clenil A

Manivasc

Zyxem

*Now : Mar/08-Jul/08

*Before : Nov/07-Feb/08

SOM

Now* 69,00%

Before* 64,63%

Now 2,81%

Before 2,75%

Now 6,35%

Before 6,16%

Source:DDD/IMS

Rx share

Now* 78,5%

Before* 76,6%

Now 1,87%

Before 1,67%

Now 13,19%

Before 12,51%

Source:Audit Pharma / Closeup

Best implementation

Best implementation

Between 2008/May and July,all 3 products beat sales records !

Carlos Grzelak Jr.

Does it increase sales ?

Previous Period : May/08-Dec/08

YTD 08 : Jan/08– Jul/08

Source:DDD/IMS

Product Previous Period YTD 08

Clenil A 71,57% 73,75%

Manivasc 2,92% 2,96%

Zyxem 6,64% 6,74%

Hipertil 0,59% 0,64%

Bamifix 64,76% 67,77%

Estimoral 11,07% 11,13%

Forten 4,96% 5,11%

*Clenil N. Aq 2,69% 2,58%

**Lipidil 14,57% 13,92% **Supply issues

*Gov. sales

YTD 08 Results

Carlos Grzelak Jr.

Critical Success Factors

•Show intermediate results to SF – quick wins •Sponsorship is fundamental•Strong interaction between Sales and Marketing•Management level totally aligned•Productivity workshops may help to fine tune•Implementation is key – pay attention to details!

The foundation of excellence is built on understanding, follow-up

and implementation

Carlos Grzelak Jr.