Wise people know that decisions can’t wait for every possible piece of information.
Jeff Bezos has said, “Most decisions should probably be made with somewhere around 70 percent of the information you wish you had.” Or, as Voltaire put it, “The perfect is the enemy of the good.”
But how do you put what data and experience you do have to work in the best way possible for you? In this POV, Intouch VP of strategic planning Tina Iglesias explains a five-step framework familiar to consultants — but often new to pharma marketers — for how to make the best possible strategic decisions for your brand.
Too often, marketers have an all-or-nothing mindset when it comes to predicting the success of their efforts. At one extreme, there are a few who prefer to rely solely on creative instincts; at the other, there are those who trust nothing less than expensive data streams and in-depth analysis to get any inkling of what might be a good marketing strategy. As with most things, though, there’s a lot of space between those extremes, and in that space is where — in my opinion — the most effective approach lies.
This approach — to make a series of logical assumptions with associated estimates, and to use them in a framework to zero in on a back-of-the-envelope estimate — is one that strategy consultants are taught as a matter of course, but we’ve found that it can be new to some marketers — which is why we’re training our strategists in it.
The Benefits of Quantifying Impact
There’s a world of difference between presenting an idea and demonstrating exactly why it’s going to work. Being able to break down the real components that lead to a numeric goal puts a stake in the ground to measure your success in a clear, tangible way, allowing for really focused debate that research shows leads to more accurate business forecasting.
After all, we all have goals, and those goals almost always are numeric. So, too, then, should be the strategies by which we plan to achieve them.
Let’s go through the steps to quantify impact using a fictional example.
Step 1: Understand, Define, and Quantify the Problem
Let’s say that your problem is: our brand missed its revenue target last year by $100 million. Okay: why did this happen?
One way to explore this is to pursue a root-cause exercise familiar to lean-thinking methodology, called “Five Why’s” (Figure 1). Simply put, just ask “why” five times to drill down to the real answer, based on the information available to you.
In our example, the brand fell short of the target by $100 million.
- Why? Because new prescriptions were below their target.
- Why? Because fewer new patients were diagnosed and treated than we expected.
- Why? Because primary care physicians weren’t referring patients to prescribing specialists.
- Why? Because the condition wasn’t seen or identified by the PCPs.
- Why? Because patients normalized their symptoms and lacked an understanding of the condition.
Another way to explore this could be to map out a patient waterfall (Figure 2) to quantify where the brand’s business is coming from. This can tell you which step to focus on to have the greatest impact.
- Overall prevalence of condition and expected number of patients
- Patients under care of a specialist
- Diagnosed patients
- Treated patients
In our example, two areas require focus: 1) patients are unaware that their symptoms are representative of a condition/disease; 2) they do not know an appropriate HCP to talk to.
Step 2: Quantify Your Business Situation and Drivers
Here’s where you look to quantify exactly how you need to get from Point A to Point B.
In our example, our revenue shortfall is $100 million. We have 3,000 prescribing specialists, and we have 15,000 PCPs that we know actively refer to those specialists. There remain 50,000 undiagnosed patients in the market. Based on the annualized drug price, a gross-to-net assumption, and a compliance-rate assumption, we can determine that we have a $25,000 net value per patient per year. This means that to increase our revenue by $100 million, we need 4,000 new, treated patients per year.
Note that some of these data are easy to come by, but others will require some basic calculations and assumptions.
For example, if the monthly list price of the drug is $4,000, we might assume a gross-to-net of 25% (after insurance rebates, discounts, etc.), meaning a $3,000 net cost per month. Annualized, that’s $36,000 net revenue per fully compliant patient. But assuming 70% compliance for an injectable treatment (which normally has a higher compliance rate than an oral treatment) would lead us to an annualized patient value (Figure 3) of about $25,000.
These are all reasonable ballpark assumptions that help us to get to a credible back-of-the envelope estimate. To get here, we can pull from secondary research, marketing plans, etc. We may not know these numbers with absolute certainty, but we can ballpark by making our estimates conservative, and they can give us directional information, even if they aren’t absolutely perfect.
Step 3: Define, Design, and Budget Your Solution
Here’s where the creative magic happens!
In our example, let’s say that we develop a targeted messaging and media program, which focuses on 12 geographic areas where we know that we have a good overlap among high-risk populations, actively referring PCPs, and prescribing specialists. We develop a strategy that focuses on patients who live in a region where there are likely to be more at-risk patients, and who have an appropriate specialist nearby, and give them information to find an appropriate HCP.
Step 4: Build and Impact Statement Sensitivity Analysis
Back to the math. Here, you create a table and plug in a range of numbers, quantifying what your success would be at different levels, from a low, barely effective program, to an extremely high — maybe even at the upper bounds of believability — level, helping you see the entire possible spectrum of results.
One way to begin here is to work with your media partner to estimate the potential reach of your program and quantify from there.
In our example (Figure 4), we estimate that the program reaches 2/3 of all prescribing specialists, or 2,000 of them. If each prescribing specialist treats two new patients next year as a result of the program, that results in 4,000 patients, enough to recoup the full $100 million in annual revenue shortfall, and a program ROI of 6.7:1. Reaching an additional 4,000 undiagnosed patients with a highly effective targeted media program seems feasible given that represents about 8% of the total undiagnosed population (50,000).
Here, you can see that, even with a very weak result, we have a positive ROI; but to get the result we hope for — making up the $100 million shortfall — we need to land somewhere in the middle of the range we think is feasible.
And, keep in mind, this is only crediting the one campaign that we’re envisioning. We’re not taking into account any of the other efforts underway, so that’s an additional measure of conservative estimation that we’re building in: that even this one effort alone could achieve the necessary result.
Step 5: Tell Your Story
At this stage, you have all of the information that you need to tell your story: to your team, to ensure that you’ve developed a useful plan; to your client, to explain what you’re recommending and why; and for your clients, to help them explain the approach to their colleagues.
In our example, we can see that if our work in 12 markets can reach 4,000 patients, we can achieve our goal. And our efforts “show the work” — we can demonstrate exactly why we’re recommending what we are, and exactly why we believe it will work to achieve our goal.
Sometimes, marketers can fall in love with the beauty, originality, or pizazz of a campaign or program. But if we don’t, in parallel, do the work to ensure that we understand its likely impact, we’re dropping the ball for our clients.
You can spend a lot of time, effort, and money on data to uncover a precise estimate. Alternatively, you can do a “quick and dirty” quantification exercise like this, using reasonable ranges and educated guesses, that can effectively pressure-test your ideas, estimate your anticipated business impact, and make your ideas far more compelling.
If the logic we use is wise, we can put a tangible value on the tactics and programs we’re recommending, and we can use this same approach as we put them into the market to help us to measure our success.
At Intouch, we design solutions for business impact. Approaches like these give us a clear sense of what the attribution of sales can be as a result of our marketing efforts.
©Intouch Group 2021
Author: Tina Iglesias is VP, Strategic Planning, Intouch Solutions.