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Customer Segmentation Does Not Work –What's Wrong With It?July 2017
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OSG at a Glance
• Offices in US, EU and Asia
• Over 700 projects
• Diverse range of leading Fortune 500 clients
• Recognized for five consecutive years as one of the fastest growing companies in the US
• Reference-able C-Suite level relationships at clients across industry sub-sectors Pharmaceuticals, Healthcare, CPG, Energy
• Recognized analytics thought leader featured in leading publications
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OSG’s Capabilities in Life Sciences
BUSINESS APPLICATIONS
R&D/INNOVATION
• Innovation Prioritization / Market Map
• Trial Optimization
• PRO Analytics
• Portfolio Prioritization
DEVELOPMENT
• Market/CommercialAssessment
• Licensing & Acquisition
• Forecasting & Evaluation
MARKETING
• Segmentation
• Launch Planning
• Brand Equity & Tracking
• Brand & LCM Planning
• Positioning, Message Testing
SALES
• Sales Force Effectiveness
• Field Optimization
• Performance Analytics
• Closed loop Marketing
COMPETENCIES
MARKET RESEARCH
ADVANCED ANALYTICS
ADVISORY
TECHNOLOGY
PLATFORMS
ASEMAPTM
In-Depth Behavioral Analytics Platform
OSMPS™ Online Data Visualization and
Predictive Analytics Portal
CAVII™Customer Engagement
Platform
LIFE CYCLE RELATIONSHIP USING TECHNOLOGY & SERVICES
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What is Segmentation?
• Different customers have different “characteristics”
• Customers with similar characteristics likely
– Make product choices similarly
– Respond similarly to promotional efforts
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Some Challenges with Current Healthcare Segmentations
• Primarily based on specialty and past Rx volume deciles
• What drives Rx behavior is not clearly known
• Message delivered may not resonate as it may not be aligned with true motivation for their behavior
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OSG’s Segmentation is Based on ‘What Matters To Customers’
DEMOGRAPHIC SEGMENTATION
LOCATION
VOLUMEAGE
Easy to target but provides little insight about what
customers value
ATTITUDINAL SEGMENTATION
TRADITIONALISTS
OVER ACHIEVERSEARLY ADOPTERS
Difficult to target or track performance as attitudes may
change over time
OSG-SEGMENTTM
(Needs and Outcomes Based)
Provides powerful guidance on how to change
behavior and guide strategy/tactics
ENDURANCE SEEKERS
SAFETY SEEKERS
RAPID TREATERS
SIMPLICITY SEEKERS
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Situation
• New biologic (Product X) for moderate-to-severe plaque psoriasis
• Crowded therapeutic area with many established biologics
• Client (Company X) was seeking an effective way to enter and establish
their product in this crowded market
Pharma Example – Competitive Psoriasis Market
OSG’s Solution: OSG-Segment™
• OSG recommended using its proprietary ASEMAPTM methodology to
develop actionable needs-based segments that can guide effective
targeting and messaging for Product X
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Segmentation Was the First Step in a Fact-Based and Differentiating Go-To-Market Strategy
Are there distinct segments of customers that value certain attributes uniquely over other customers?
TARGETING Which customers should Company X focus and align the business around?
REACHING SEGMENTS & MESSAGING
How must Company X convey its value to win in a segment?
SEGMENTATION
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Research Approach
Screener (2 mins)
ASEMAPTM – Attributes trade-off exercise (15 mins)
Usage/Prescription Behavior & TPP Receptivity (5 mins)
Attitudes (5 mins)
Firmographics (3 mins)
• 30 minute online survey across 7 countries
~30 ATTRIBUTES THAT
ENCOMPASSED EFFICACY, SAFETY,
DOSING, MOA ETC.
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ASEMAP™ – Steps in Prioritizing Attributes
A. CATEGORIZE ATTRIBUTES B. RANK ATTRIBUTES
C. TRADE OFF ATTRIBUTES
TM TM
TM
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An ASEMAP™ Segmentation Is Based on Key Attributes That Drive Choice
SEGMENT 1 SEGMENT 2 SEGMENT 3 SEGMENT 4
Availability of long-term safety data
Percent of patients who achieved PASI 100 at week 12
Percent of patients reporting PASI 75 at week 12 who achieved PASI 90 at week 52
Incidence of malignancies
Percent of patients who achieved PASI 90 at week 12
Percent of patients who achieved PASI 75 at week 12
Incidence of serious infections
Incidence of nausea
Incidence of vomiting
Ability of patients to return to work
250
120
120
215
110
110
200
150
130
100
117
120
200
105
115
110
105
95
95
90
120
185
115
105
180
130
105
95
90
85
115
110
100
98
100
115
105
175
150
155
EMPHASIS ON SERIOUS SAFETY
ISSUES
EMPHASIS ON ENDURANCE
EMPHASIS ON RAPID OR
SHORT-TERM EFFICACY
EMPHASIS ON SIDE-EFFECTS AND
PRACTICAL PATIENT OUTCOMES
DERMATOLOGISTS SEGMENTATION EXAMPLE
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Combining Attributes Importance with Attitudes & Behavior for Holistic Segmentation
Points of differentiation
Segment 1 Segment 2 Segment 3 Segment 4
DifferentiatingAttribute
CategoriesSerious safety issues Endurance Rapid Efficacy
Side-effects & Patientoutcomes
Key Attitudes
Try out new treatments only after they have been in the market for a long period
Top priority is to improve clinical outcomes
Keep up with breaking developments in the field
Priority is to improve profitability, physician and
employee satisfaction
First to try new treatments
Treat patients aggressively
Fear of side-effects limits their prescription of biologics
Burdened by administrative paperwork
More likely to discuss patient support programs
Prescribing Behavior
Lowest biologic prescribers
High biologic prescribers High biologic prescribersHave a wider prescription pattern (biologics, topicals,
systemics, light therapy, orals)
FirmographicsPrimarily a medical
practicePrimarily a medical
practicePrimarily a cosmetic
practiceMix of medical and cosmetic
practice
SAFETY SEEKERENDURANCE
SEEKERRAPID TREATER
SIMPLICITYSEEKER
DERMATOLOGISTS SEGMENTATION EXAMPLE
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Develop Actionable Segment Personalities
Attributes
Attitudes
Usage Behavior &
Demographics
Segment Personalities & Messaging
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A Fact-Based Approach Must be Taken for Identifying Target Segments
SEGMENTATION
TARGETING
REACHING SEGMENTS & MESSAGING
Are there distinct segments of customers that value certain attributes uniquely over other customers?
Which customers should Company X focus and align the business around?
How must Company X convey its value to win in a segment?
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The Highest Priority Segments Were identifiedThrough An Exhaustive Fact-Based Process
SAFETY SEEKER
ENDURANCE SEEKER
RAPID TREATER
SIMPLICITY SEEKER
ENDURANCE SEEKER
SAFETY SEEKER
RAPID TREATER
SIMPLICITYSEEKER
PR
IMA
RY
TA
RG
ET
SSE
CO
ND
ARY
TA
RG
ET
Example Criteria for Segment Targeting
• Can Product X demonstrate superiority vs. competition on attributes that uniquely matter to this segment?
• Is this segment sizeable enough to justify the effort?
• How much effort would it take to acquire customers in this segment?
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Communication Must be Tailored Towards Segments for Greater Impact
SEGMENTATION
TARGETING
REACHING SEGMENTS & MESSAGING
Are there distinct segments of customers that value certain attributes uniquely over other customers?
Which customers should Company X focus and align the business around?
How must Company X convey its value to win in a segment?
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Segment Tool Kits (Segment Profiles and Insights, Messaging Platforms, E-detailing, Visual
aids and Enablers to Selling)
Empowered Sales Team With A Targeted Product Selling Toolkit
ENDURANCE SEEKER
SAFETY SEEKER
SIMPLICITYSEEKER
OSG worked with Company X and an agency to develop and prioritize the
right messages, visual aids and other
marketing collateral
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Developed an ‘easy-to-use’ tablet/mobile based typing tool that Integrated with Company’s IT System for Classification and Identification
TYPING TOOL
(Administered via sales reps,
online surveys or
using secondary data)
BROAD DIRECTIONS
TO SALES REP ON
COMMUNICATING
THE PRODUCT’S VALUE
PROPOSITION
TYPING TOOL
CLASSIFICATION
“Hello Dr. John, can you pleasereview these 8 statements and rankthem for me? It will take 15 seconds.I am just trying to understand whatis important to you in choosing atreatment for plaque psoriasis.”
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Impact of OSG’s Segmentation
Product Impact
• Improvement in market share in crowded categories• Faster uptake of new products
Organizational Impact
Sales
• Streamlined sales activities to target key segments and improved sales calls and prospects
• Improved the velocity of opportunities• Decreased cost to serve
Marketing
• Elevated the relevance of the marketing as a key enabler of success to the business
R&D
• Entire R&D portfolio was aligned to the needs of key customer segments• Implemented as a first screen to understand how to assess the potential of new
technology
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OSG Advantage: Why OSG for Segmentation?
I. Unique Segmentation Approach – OSG uses acombination of needs (ASEMAPTM), attitudes, behaviorsand demographics to develop a holistic segmentation
II. Long-term Applicability – OSG segments hold long-term relevance without the need for periodic refreshbecause it is based on customer current and futureneeds
III. Proven Across Verticals – OSG has successfullyexecuted segmentations across multiple verticals(Pharma (multiple therapeutic areas), Medical devices,CPG etc.)
IV. One Stop-Shop for Developing & ActivatingSegments – OSG’s teams combine analytical rigor(various approaches to develop segments such as K-means, Latent class, Hierarchical clustering etc.) withpractical know-how to develop actionable and targetablesegments
V. Developing Segmentation Toolkits – OSG’s projectand graphics teams have combined to develop segmenttoolkits for clients for company-wide socialization (i.e.segment booklets, segment pocketbooks etc.)
Mani Vannan, PhDE. [email protected]
M. +1 917 428 4396
O. +1 212 897 9960
Sanjeev R SridharanE. [email protected]
M. +1 215 867 1924
O. +1 469 258 6949
Contacts
WWW.OSGANALYTICS.COM
