Analytics to Accelerate: Actionable data analytics was used to grow revenue of a product at three stages of its lifecycle
Services used in the case study:
Data Driven Commercial Strategy Development
Review of Business Model
Pricing Analysis
Sales Planning Quota and Goal Setting
Commission Plan Design
CASE STUDY: Utilizing a Company’s In-house Data to Uncover Opportunities and Drive Sales of a Product at Three Different Stages of its Lifecycle.
The product discussed in this case study is a multi-use disposable that is part of an energy-based aesthetics treatment system. The aesthetic treatment system consisted of two parts, a high-value device and multi-use disposables with each part sold separately to aesthetic physician practices via a direct field-based salesforce in the US market.
Stage 1: Salesforce effectiveness data to “Cross the Chasm”
Situation:
The aesthetic treatment system had been on the US market for about two years and was being sold via a single salesforce. Growth of the disposable sales had started to slow down except in two markets. The feedback from the field team in these two markets was that their territories had the highest demand for this type of aesthetic treatment and this was the driving factor for their success.
Ref: Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers or simply Crossing the Chasm (1991, revised 1999 and 2014), by Geoffrey A. Moore
Steps Taken:
On analyzing the sales and compensation data from the field, we found some surprising information: the sales team members who were most successful in selling disposables were not selling enough of the high-value device. This was the reason for their average vs. high performance. Additionally, analysis of their call data showed that they were spending significant time visiting existing customers in order to sell the disposables, i.e. a pull strategy was being employed in these markets.
Solution:
A three-month pilot that focused the field team on supporting the disposable business was implemented. Within this time frame the disposable sales in the pilot markets increased substantially vs. the prior year. As a result of the pilot, a separate field organization was put into place after analyzing similar restructures at other companies. Special attention was given to the alignment of targets and incentives that fostered reward, recognition and most importantly collaboration between the two sales forces.
Successful Outcome:
The sales from the disposable business grew by 45% in the following year.
Stage 2: Analytics to preempt issues and sustain the growth trajectory
Situation:
The aesthetic treatment system had been in the market about five years and disposable sales were steadily growing. Overall, both physician and patient customers were happy with the treatment results and brand credibility was high. In an effort to better serve customers, the company had collected system usage data from its customers (in a compliant manner), with the necessary encryptions in place.
“Manasi’s insightful analysis of the usage data from the system led to a new marketing campaign that was critical to reinforce the appropriate usage of the system and sustain the momentum of the business. This would have never happened without her initiative and innovative thinking. She and her team moved our business forward.”
Steps Taken:
Analysis of the system usage data found that the energy being delivered during the treatments was - on average - less than the recommended guideline, which was negatively impacting the treatment’s efficacy. On discussing these findings with customers, we discovered that in an effort to save cost for price sensitive patients, the energy delivery was being rationed in some practices.
Solution:
A marketing campaign was launched to reinforce the use of recommended guidelines and provide treatment options to price sensitive customers.
Successful Outcome:
As a result of this proactive approach, sales of the product continued to grow and brand credibility was maintained.
Stage 3: Analysis of archived data that resulted in a customized targeting strategy and additional sales from dormant accounts
Situation:
The product had been on the market for 10 years. Several factors had resulted in a decline in sales of the disposables but a recent re-energized commercial effort had returned the product to growth mode. Now the commercial team was looking for new avenues for growth and turned to the analytics team for help.
“Use of data and analytics in the aesthetic device industry had been behind other markets. Manasi and her team harnessed the power of analytics, providing key insights that informed commercial strategies and tactical plans that led to best-in-class business value and long-term CAGR.” More specifically, the use of data and analytics was crucial at various stages of the product’s lifecycle to proactively plan for and reactively address opportunities and issues for long-term product success. If solely led by ‘managerial gut instinct’, the outcome would likely not have been as good.”
Steps Taken:
The customers were segmented into high, mid and low tier based on sales data. Prior analysis conducted by the company had identified three key drivers of sales. These drivers were customer behaviors that could be reinforced through specific tactics. (For example, one driver was the marketing adeptness of a customer that could be supported by the field team.) Using this information, a customized targeting strategy was used to drive sales in low tier accounts that made up 65% of the purchasing customer base. In addition, a separate deeper analysis uncovered a substantial group of dormant customers (29% of total customer base) that had not purchased a disposable in over two years.
Solution:
Target lists were developed in the company’s CRM tool and the activities in these accounts were tracked by sales management and marketing on a weekly basis.
Successful Outcome:
Sales in the low tier segment increased by 95% and 16% of dormant accounts were re-activated.