Case Study

IC Plan Design in Defense of Competitive Entry

Using IC to optimize sales force behavior and generate sales success.

Addressing a client’s incentive compensation (IC) plan and implementation can have a significant and immediate impact on changing sales force behavior when priorities shift.

In this particular case, our client, a global pharmaceutical company, dominated an expanding market when an unexpected new competitor arrived, eating into our client’s sales figures.

Our client was previously not geared toward addressing competition since it had not been a factor, sales were consistent year-over-year without attempting to expand into new patient areas. With the introduction of new direct competition, our client was compelled to act.

Upon review, we found that unbalanced compensation payout occurred in high volume sales geographies.

In order to gain new patients, KMK collaborated with the client to evaluate a share contest to address the competition directly. In addition we assessed current IC plan fairness and conducted a sensitivity analysis for the sales forces. And finally, we created an analytics simulation to find optimal IC component weights to balance fairness and drive particular field force behaviors deemed to be highest priority.

Via strategic IC plan design our client was able to successfully help a higher percentage of new patients, stave off the competition, and lock in long-term success for their therapy.

Activities

  • Evaluated a share contest to face the competition
  • Assessed IC plan fairness and sensitivity analysis
  • Simulated optimal IC component weights to balance fairness and behaviours driven
  • Introduced an NBRx share contest

Results

  • IC plan redesign helped our client pivot quickly and effectively within an environment of new competition.
  • With proper design and communication, sales reps found the adoption of the new plan simple and helpful
  • Through IC plan design our client was able to stave off the negative impacts of direct competition
  • IC plan redesign position our client for long-term success with this product

Key Learnings

  • Adjusting existing IC plan weights to can produce fairness and motivation
  • Keeping the core IC components unchanged creates consistency of message delivery and better adoption for sales force
  • Balancing sales reps payouts can work to effectively manage head-on competition
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