The Coronavirus (COVID-19) pandemic is changing our lives drastically and also putting pressure on pharmaceutical companies to immediately adjust their promotional strategy. Digital promotion tactics may be a long-term investment consideration, but the more pressing question is how should you make adjustments to your upcoming payout calculations and next quarter’s incentive compensation plan? What alternative promotional activities can you leverage with your current sales team and how do you measure their performance? Or what about the more serious question of are you even able to afford carrying your current sales team without knowing when they can be back in the field to visit HCPs? If you can do so today, how long might that last under current conditions?
Here are some additional considerations and questions to think about during this unprecedented moment:
1. Financial impact: Estimating coronavirus pandemic impact has become a top priority for all organizations overnight. The lack of good analogs becomes the first challenge for forecasters and analysts. The most obvious challenge of using past natural disasters as analogs is that they are all regional and not national, and certainly not global. They also did not change how healthcare providers and other parts of the system operate as much as the COVID-19 pandemic does. Another limitation of using such analogs to extrapolate the impact is related to patient relocation and distribution channel variance. Patients may move out from geographical areas during natural disasters resulting in a temporary demand drop or delayed distribution. During COVID-19, patients are not necessarily moving, so although demand may not drop much for those suffering from chronic diseases, certain distribution channels may be impacted more significantly than others, such as long term care facilities which could be closed for a while vs. mail order distribution which may remain relatively stable. The different levels of COVID-19 incidence and geographic variance can easily impact the distribution channel mix of a specific brand.
2. Sales and compensation: When every household has been stocking up on food and other needed supplies this March, will you also observe a sales spike of your product for the same time period? Will this be due to an outstanding performance of your sales team or does it indicate that Q2 sales may sink to the bottom? What would be a fair approach for compensating the sales team for their Q1 performance, and yet fiscally responsible when cost savings become critical to most organizations? If you can be almost certain that Q2 will be a tough quarter for everyone, what would be the best way to adjust your Q2 IC plan? Should you shift targeting funding to future quarters or MBO (Measure by Objectives) base pay? If so, what new MBOs would be appropriate for your sales teams? Will your organization consider reducing or even taking away target funding completely to cut cost? Will that result in regrettable turnovers and potentially huge revenue and market share loss due to lack of coverage, especially if your competition has their sales teams back to the field in a few months?
3. Alternative promotions: If setting new MBOs for your sales team sounds attractive to be a good interim approach, do you have a clear understanding on (1) how your customers and top accounts need to adjust their practice into the new situation, (2) whether they will continue to take new patients (3) what the specific impact for your product looks like (4) what are your customers’ acceptance levels of, and preferences for, alternative promotional channels, (5) how to effectively target your customers around alternative promotions. If you are not clear on these questions, do you have a good channel to collect information to answer them?
4. What else matters to your customers: When both you and your competition’s field face time with HCPs drops altogether, what else matters now? Is it real world evidence-based value messaging? Or the options and levels of patient assistance program available to maintain medication persistency and accessibility? Or KOLs’ publications and activities HCPs follow on social media?
As KMK continues to help clients customize and implement suitable solutions for their specific challenges due to this unprecedented event, more learnings and innovative ideas will surface.
Contact KMK email@example.com to discuss your challenges and find out what solutions will work for you!