Customer Strategy in Action - Pharmaceutical Case Study

The idea of creating a customer strategy for your business may sound great, but can it really impact the bottom line? Here's a real-life example:


The situation: A pharmaceutical organization faced declining profits for one of its product lines. The product was no longer covered by patent, and monthly sales had plummeted. The organization had cut costs - including marketing and sales spend, making it difficult for them to serve all of the customers in their supply chain. Even though customers had a positive perception of the product, sales had declined to the point that the organization was considering discontinuing the product altogether.


The solution: Because of the streamlined sales and marketing teams, our initial step was to determine which of the five customer groups to focus on first. The team assessed the customer supply chain to determine which " customer layer" provided the greatest opportunity to impact sales in the shortest amount of time. Each customer group was assessed in terms of reach to other customer types, current and potential sales, and openness to having a relationship with the organization. Based on our findings, we began with the distributors for this product.


Once we had determined to begin with the distributors, we took a look at the types of customer data the pharmaceutical organization had on these customers. While there wasn't much data available, we were able to fill in gaps by interviewing the distributors themselves and the sales reps that called on them. We created a qualitative, proxy-based value model and needs segmentation that formed the basis for a customer strategy. Based on the output from the model and the segmentation, we were armed with two core pieces of insight: 1) which distributors provided the greatest strategic financial value and 2) how those distributors wanted to work with the pharmaceutical organization.


We started by aligning the streamlined staff with those distributors that could provided the greatest strategic financial value. A core account team was created that included sales, marketing, customer care and medical technology. Each was given clear direction on their role in the relationship. For example, we assigned a single-point-of-contact in customer care for each distributor. That meant that top distributors could call one person and have all their needs met and questions answered. This was a big shift - previously, the distributor would have had to make several calls to several different areas. In addition, each sales rep was given a handful of distributors that he or she was responsible for. Training, clear metrics and performance measures were set for each member of the account team to ensure the shift was successful.


We used the output from the needs segmentation to guide the customer experience and strategy for each of the top distributors. Our research identified some foundational needs that were not being met. We built a plan to begin addressing these problems first so that the pharmaceutical organization could rebuild trust with its customers. We also found that there were some common needs shared by the top distributors, and that there was a sub-set of the distributors that were open to having a deep relationship with the organization. Recommendations were developed to address these needs as well.


The result: The pharmaceutical organization was able to maximize its streamlined resources by focusing on those customers that could provide the biggest impact. Within 3 months of implementing the strategy, the downward trend of sales leveled off. The following quarter, the product posted a profit - the first one in over a year. As a result, the organization was able to being exploring ways to replicate this process with other customer types in the supply chain.