On Friday, the 22th of November 2019, KWARTS was invited again on the yearly CODIMP lunch hosted by IM Associates, to present a case study we did on Smart Targeting in Healthcare.
COD … what?
CODIMP is an initiative started by IM Associates in 2003, that unites its members, pharmaceutical companies, in a data-pooling cooperation. Each member sends detailed Sell-In data (direct sales to pharmacies) to a central authority. This authority anonymizes the sources of this data and aggregates all of it to end up with a total Sell-In per pharmacy for each product category. In return for sharing their data, each member gets this detailed market data per pharmacy and per product category. This enables them to set up more accurate go-to-market strategies and to improve the general sales effectiveness. Basically, they can measure their market share per product and per pharmacy.
What were we doing there?
KWARTS presented a case, revolving around the collaboration between different players in the pharmaceutical world, namely:
- GSK, a pharmaceutical company selling consumer healthcare products to end consumers or patients via pharmacies
- Pharm-In-Touch, an e-commerce platform where pharmacies can order directly at around 40 different pharmaceutical companies (among which GSK), with a single log-in.
- Hashting, a digital couponing platform empowering retailers and pharmaceuticals (in this case GSK) with a couponing system that has perfect traceability of redeems
- RedPharma, a data provider that can bring detailed Sell-Out data in healthcare (i.e. sales from pharmacies to end consumers or patients)
- IM Associates, a data technology company in commercial operations in healthcare that has mapped population characteristics in the catchment area around each pharmacy
We showed that by combining different data elements, KWARTS can build a smart targeting solution that can boost the return on marketing investment, and thus would benefit all parties involved.
Mid 2018, GSK launched a digital couponing campaign with displays in pharmacies for their oral care products, in cooperation with Hashting. 843 participating pharmacies placed a Hashting mobile couponing display in their pharmacy. This display triggered customers to send a text message to get a direct €2 discount on Sensodyne, Corega or Paradontax.
The Hashting campaign was quite successful. On average, each coupon redeem impacted sell-out with +8€ in the year following the campaign, thus outperforming the -2€ discount during the campaign more than enough. Overall, the campaign boosted Sell-Out of the oral care products with +1.6% in the following year.
While +1.6% is a good result, we wondered at KWARTS what we could achieve in a next campaign if we would target only pharmacies of which we could expect a big return on our investment: smart targeting. Smart targeting is algorithmically identifying customers where the impact of a campaign is expected to be the strongest. High potentials are targeted first, thereby optimizing return.
To build a smart targeting solution, we need data. In this case, we found the following pieces of information via the aforementioned parties:
- Campaign data: who participated? How many coupons were redeemed? (Hashting data)
- Engagement data: how strongly does a pharmacy interact with GSK products on the Pharm-In-Touch platform in terms of page visits (days since last visit, amount of visits over the last year, etc.)? (Pharm-In-Touch data)
- Sales data: how do the products perform in terms of Sell-In and Sell-Out? (GSK and RedPharma data)
- Metadata: what do we know about the pharmacies and the population in their catchment area? How large are their catchment areas (how many inhabitants), average age, gender, etc.
By combining all of these data sources, we have built a predictive model that can predict the impact on sales. As a last step, we identified pharmacies where this impact is the most positive, in order to target in them in the future.
The estimated impact of smart targeting is a +4.8% increase in sell-out in the following year. Thus, smart targeting can triple the impact when comparing with random targeting.
Curious about smart targeting? Do you want to learn more, or apply it to your business and gain some market share in your product category? Get in touch via firstname.lastname@example.org !