In search of CRM ROI

When it comes to increasing sales force effectiveness and efficiency, it’s crucial to have everyone on board. Everyone must share a clear vision, be committed to necessary changes and have a defined map for the future. In his talk “Working with KPIs to achieve higher sales and marketing effectiveness and efficiency: In search of CRM ROI,” Bart Vannieuwenhuyse speaks to ways of managing change and mapping the way forward.

Vannieuwenhuyse, executive director of CRM EMEA Center of Excellence, Janssen-Cilag, defines CRM as “ a customer-centric business strategy designed to maximize the value of our customer portfolio through the integrated and effective use of marketing, sales and customer services.” Says Vannieuwenhuyse, the key is to approach customers with services and solutions based on the customer’s needs, not on the pharma company’s. Sometimes, meeting customer needs may involve changes in how a company conducts its sales and marketing. And as Vannieuwenhuyse says, what suits one customer may not suit the next.

Leading change
As Vannieuwenhuyse points out, SFE can mean “Such a Fantastic Experience” or “Serious Fatal Error,” depending on how business is conceived and executed. Says Vannieuwenhuyse, SFE is like an iceberg – IT is the visible bit above the water, the part that gets noticed, the part we pay attention to. The part that can really sink you is actually invisible, below the waterline. That part is people.

Getting people excited about a new direction is not difficult, says Vannieuwenhuyse. Keeping them excited is considerably more labor intensive. According to Vannieuwenhuyse, in order to make successful transitions, people must be ready (I have a clear vision and understand why this change is necessary); they must be willing (I know what is expected of me, and I feel supported); and they must be able (I know how to enact this change, I have been suitably trained, and I feel rewarded when I do well).

Embracing change is a bit like climbing a spiral staircase. At the bottom rung are those not quite ready to take that first step. They are waiting for more information or more incentive; they are waiting to be convinced. A little further up are those who are thinking about it but are perhaps not fully committed. Still further up are people preparing for action, gathering momentum. Even higher are those who are actively taking action, and at the top are those who are fully committed and engaged, who feel they are maintaining this “good thing” for life. Some backsliding may occur on the way to the top – this is not unusual. What’s important is that those on the staircase have clearly defined directions for moving forward.

The organization needs to supply what Vannieuwenhuyse calls the “levers of change.” To execute lasting change, you have to “make it real, make it work and make it last.” First, it’s necessary to define the business goals and describe what the future will look like. People who know what they are working toward are more likely to be committed to the process of getting there. Second, the organization needs to create an environment for change, one where progress is rewarded. Third, plan the change to ensure success without chaos. Execution is the fourth step, hand in hand with improvements and refinements as necessary. Fifth and finally, the change must be integrated and sustained. Throughout the entire process, management must provide leadership, demonstrate engagement, and ensure that organizational systems and measurements of success are in place and functional. Says Vannieuwenhuyse, pharma is generally pretty good at the front end of the process but loses momentum toward the end. To counteract this tendency, the Mission Top program was conceived.

Mission Top
Started in 1998, the Mission Top selling program was designed to promote necessary change. The first step, according to Vannieuwenhuyse, was to take a “non-confrontational” look at how resources were being allocated and how important decisions were being made and by whom, and then to suggest and support changes and improvements to the system.

In the early days, reps were largely responsible for ranking customers according to value and priority. There was little direction governing how these rankings should be made, and thus criteria for ranking varied hugely from rep to rep with little or no management oversight on the process. Because there was no real differentiation or segmentation of doctors, allocation of sales and marketing resources was poorly handled and ineffective. There were relatively small differences in investment between doctors at the different priority levels (no big difference between investment in an A doctor and a C doctor), and there were large differences within the priority categories (one A receiving considerably more than another A).

Armed with this information, Mission Top was able to demonstrate that the status quo wasn’t working. The Mission Top program put the customer squarely in the center, then concentrated on improving the four company responsibilities around the customer. One focus was sales rep excellence. Do they reps know what to do and are they doing it? Field sales manager excellence was also a priority. Do the managers need training and guidance; do they know their role in the field? More concentration was put on accurate segmentation and targeting, and, given the issue of limited access to physicians in Europe, the role of multi-channel communications was emphasized.

One key to Mission Top is its emphasis on shifting towards buying potential as a way of segmenting customers. Instead of the traditional pyramid, with a small group of high-value doctors at the top and a broad base of low-priority doctors at the bottom, Mission Top segments customers as “gain” (not yet on board and therefore offering high potential), “grow” and “defend.” According to Vannieuwenhuyse, these labels have actions implicit in them, and this makes differentiated call strategies much more acceptable and logical to the reps who must execute them.

Mission Top had nine metrics (KPI 1 – 9) for evaluating the success of the program:
• Recruiting top performers – were they able to hire the people who would best drive their business?
• Territory vacancy rate – is it in line with our goals?
• District manager vacancy rate
• District manager coaching days – with DMs so overloaded, do they have time to coach the sales reps?
• Loss of top performers – are we staying on top of attrition rates and retaining our best sales people?
• Managing poor performance – are we able to improve or off-load poor performers?
• Sales rep. field days – are they in the field, or are they in training, conferences, etc.
• Calls/contacts per day
• Contact intensity per channel – are we able to maximize our use of other contact channels on top of traditional means of contact?

Additionally, the company wanted to know the business impacts of the Mission Top selling program. One advantage of Mission Top was that it provided organizational alignment and execution across the whole of the EMEA. Each division had a common framework, a common language to work from, and a common set of metrics for evaluating progress. Feedback came from 30 countries, with more than 3000 reps and 400 DMs reporting.

And the results? From an effectiveness position, says Vannieuwenhuyse, the Mission Top program was successful. Field days increased from a baseline of 76% to 86% -- an equivalent of 390 new reps on the ground across the EMEA. And an IMS survey showed Johnson & Johnson with an extremely high return on detailing investment. Clearly, Mission Top was able to get its people to understand and embrace the changes necessary to drive the business ahead.

Moving forward – the VINCI program
Vannieuwenhuyse acknowledges that Janssen-Cilag has a very ambitious vision for its future. The EMEA CRM vision, according to Vannieuwenhuyse, is that “by the end of 2008, our target customers will rate Janssen-Cilag as delivering customer experience which exceeds expectations for their channels of choice, thereby creating higher customer profitability.” The Janssen-Cilag vision places the customer firmly in the middle.

To drive further success, the VINCI program was instituted; the program’s value drivers concentrate on the five core business processes: field time optimization (ensuring that field resources are effectively deployed); segmenting and targeting (smarter allocation of “go-to resources”); structured management of major accounts and opportunities, including compliance issues; campaign management (to coordinate consistent delivery of messages according to customer needs and across the many available messaging channels); and service management (to ensure that inbound interactions from all the possible channels receive the appropriate response).

Analysis of how things were done prior to implementation of the VINCI program brought to light some ineffective practices. While some highly valued customers received numerous calls from reps, others of equal value got little contact at all. And despite the fact that the “productive window” of calls from reps is generally between 8 to 16 per year, some doctors received more than 40 calls in a single year. The issue then became how to demonstrate to the sales force that there is little or no value in call frequency above or below the productive window, and that a change in behaviors would engender positive results.

The VINCI program makes step-by-step segmentation of customers a major focus. The foundation steps are potential and penetration, but on top of those come segmentation by accessibility, which looks at the multiple communication channels that are available, and segmentation by customer attitude, which determines the message the customer receives.

According to Vannieuwenhuyse, VINCI provides a closed-loop approach to meeting customer needs. Marketing concepts start at the HQ level, with marketing teams determining a strategy for the sales cycle. Next, a plan of action is hammered out with the participation of district managers. Reps execute the plan, meeting with customers and identifying needs during face-to-face visits. Reps gauge customer attitudes and feed information back to HQ, which uses the information to divide doctors into segments and tailor messages appropriate to the segments. Customers get the messages via multiple channels and, hopefully, take action by requesting further information from the company.

In this way, customer information is captured, and the key reasons doctors have for either positive or negative attitudes toward a product can be identified. If doctors are reluctant to use a therapy because they have a concern about side effects, for example, then a message can be developed that answers that concern.

Measures of performance are also evolving, says Vannieuwenhuyse. From the more traditional gauges of call rate and volume, SOV, etc., more concentration is being placed on targeting and appropriate segmentation and on the quality of messaging. Measures of success within a network (who is influencing whom and how are we doing with the key opinion leaders?) are also key to determining the efficacy of a marketing program. Vannieuwenhuyse also advocates the use of a Net Promoter Score (NPS) to measure success. If you ask a group of customers, how likely is it you would recommend us to a friend (or colleague), do you have a high percentage of people who would strongly agree (promoters) and a low percentage of those who say it’s “extremely unlikely” (detractors)? The NPS provides a good benchmark for comparing a product against a competitor’s.

Says Vannieuwenhuyse, it’s clear that “we need to be looking differently at how we are managing our business.” We need new key performance indicators to determine if reps are making use of the resources provided and if call plans are being executed as designed. There should be better collection of customer insights and better measures of customer satisfaction.

As Jack Welch, former CEO of General Electric once said, “We have two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than our competition.”

Author: Shannon Perry, journalist, eyeforpharma

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