BACKGROUND: The United States has experienced vast changes in the health care landscape. Treatment decisions and product purchasing activity is rapidly shifting from the traditional individual physician to a diverse set of institutional customers. Due to the complex affiliation relationship between healthcare professionals and hospitals and hospital networks they work for, the actual prescription location (writers) of a drug can be far remote from the drug purchasing or final distribution location captured by the data.
For example, HCA Healthcare is one of the largest health systems, or IDNs (integrated delivery networks), in the United States. HCA Healthcare is based in Nashville, TN but with its network covering multiple states including FL, TX, SC, etc. While analyzing their sales data and consulting with the reps, we noticed that it’s quite common that the sales are only collected at the parent account level, while the actual sales are initiated in its children accounts in a different geography. The misalignment may direct the reps to the wrong places and causing inaccurate information in targeting and IC operation. The impact is more significant with oncology or account/hospital setting products, and eventually result in sales force inefficiency and hurt the product performance.
KMK’s Split Credit Tool is designed to leverage field inputs to accurately link and allocate sales credit to the accurate prescribing location to improve the accuracy of IC plan design, IC performance and payout calculation, targeting etc. KMK’s Split Credit Tool provides a simple, accessible and centralized platform for reps to submit their split requests, for managers to review and grant approval and for HQ operation teams to quickly implement the changes to all downstream processes.
SOLUTION: As a part of Incentive compensation, sales crediting is a complicated aspect of designing an effective sales incentive compensation plan. Along with sales growth, the process of setting up and managing territories and sales crediting become complex.
A common problem with pharmaceutical companies comes from sales credit reallocation in terms of data collection challenges. For example, sales data are collected at the parent account level while the actual sales are initiated in its children accounts in a different geography. How does the company maintain fairness in terms of sales crediting for each field rep? And how does the field rep efficiently report sales credit reallocation cases to their superiors for approval?
KMK’s Split Credit Tool is a comprehensive sales credit optimization application designed to accurately allocate sales credit to the corresponding territories for the purpose of sales quota design, IC payout calculation, etc. KMK’s Split Credit Tool seamlessly implements split credits through mid-quarters and post-quarters, as sales are commonly divided between multiple territories.
The Split Credit Tool allows sales reps to apply credits to multiple territories, removes friction from the management team’s approval process, optimizes for imprecise data, and saves time and energy across the board.
- KMK proprietary online platform, allow quick set-up and single sign-on access
- Connected with KMK IC platform, inputs could directly feed and used for IC administration
- Customized portal access and business rules for authority to view, submit and approve requests
- Reps will review a full list of accounts in their geography (or high level) and their brand sales history; Submit requests to allocate the sales to the right accounts
- Managers/Directors will receive daily notification for requests submitted in their geography; Review and approve or reject the requests in the portal
Actual Client Results
- Simplicity: Replace field input collection thru excel, allow quick and seamless submission and approval process
- Accuracy: Significantly minimize the mistakes and duplicates thru multi-level check point within the tool
- Timeliness: Allow reps to update sales allocation and understand the real account performance in a timely fashion
- HQ Resource efficiency: Free up internal resource from the manual process
- High field force morale: With more accurate data, client could use goal-based IC approach instead of rank or MBO plan to set more reasonable and attainable expectations and reward for better performance
- Field resource optimization: More accurate data allows better understanding of the market opportunities, and be able to allocate field personnel to achiever better sales result