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Competitive Benchmarking In Trade – Answering The Who, What, Why and When

Last month our colleague Derek Cothran addressed the importance of using secondary research to benchmark your Patient Support Program (PSP) against obvious and not-so-obvious competitors. We’d like to continue a discussion around competitive benchmarking in this month’s blog, but this time focused on how it can be used to optimize a channel or distribution strategy for both established and start-up manufacturers.

Specifically, we’ll discuss the benefits of considering options that perhaps have not been done before, why taking risks can be more beneficial than you might think, why it’s imperative to know the why behind a competitor’s decisions as well as touch on the optimal times to competitively benchmark your channel or distribution strategies.

Consider looking beyond the tried-and-true

Often manufacturers are interested in what their main competitors have done. In particular, they want to know the strategies others have pursued that were most successful. This is a terrific place to start when competitively benchmarking your channel or distribution strategy, but you shouldn’t stop there. While there is much to be learned from the tried-and-true methodologies that have been implemented by others, there are other important considerations you should consider when surveying the competitive marketplace.

In a previous blog, Paul explained how channel and distribution strategies should be primarily focused on who you sell to and through. This should continue to be your focus when picking the competitors or analogues you may choose to compare your brand against. Because channel strategy is typically built around administration more than disease state, your choices need to include products that provide access similar to what your product demands. Considering products with the same distribution models due to their administration, or retail-only or specialty products if yours is one as well, will provide you with critical insight into the type of distribution models that have worked best for a specific product type.

You should also consider the customers’ expectations around product access when choosing analogues. Identifying the level of innovation a competitor is using in their channel strategy may demonstrate that sticking to the tried and true strategies makes the most sense – simply because a potential provider or patient population is accustomed to accessing a product a certain way. Or you may discover deficiencies in the current methods of distribution, allowing you to identify optimal ways to get the product to the provider or patient in more beneficial, cost-effective or innovative ways.

Being a trailblazer can be as rewarding as it is risky

Traditionally there has been a hesitancy in taking the trailblazer approach when it comes to creating a channel strategy. This is due mainly to avoid being perceived as being difficult to do business with by any partners throughout the product journey such as third-party logistics (3PL) providers, distributors or pharmacies. Adopting the channel strategy of an established large manufacturer may seem like a good idea, but is it actually doable? Due to economies of scale and/or budget constraints for a smaller or start-up manufacturer, following what a large manufacturer has done isn’t always an option. At EVERSANA, we take our client’s current size, stage in the product lifecycle, available budgets and ability to negotiate for the best channel partner rates into consideration when choosing analogues. Then we provide a range of approaches available for the client to review.

We also often advise our clients that being different doesn’t automatically mean being difficult. The greater the innovation in developing a channel strategy, the more room a manufacturer must do things differently throughout the product lifecycle. Choosing alternate ways to get the product to the patient can help a manufacturer save money while promoting the product more effectively or efficiently. Being open-minded to trying new things can also help differentiate a manufacturer in the market in a good way.

And it is always wise to remember that established manufacturers may not have the same considerations when choosing a channel strategy that a smaller manufacturer may have. It is not unusual for a large manufacturer to use a one-size-fits-many approach due to having established standard channel strategies and structures that they believe to be adaptable to most of their products. This economies of scale approach isn’t always feasible for start-up or mid-sized companies.

Knowing why it was done is as important as knowing what was done

At EVERSANA, we always present our clients with a range when highlighting competitive channel strategies. We do this because we know there are various levels of comfort with each client. Some are more aggressive some are more conservative and a good portion fall somewhere in the middle.

We feel confident in speaking to a large range because this represents our collective experience and deep knowledge of the manufacturer’s decision-making process built from years on their side of the desk. Our experienced guidance is there to help educate any client who asks why one idea will work better than another, particularly for them.

As Derek noted in last month’s blog, providing the why to clients regarding the choices their competitors make is critical in helping them pick the choices that will work best for their product. We listen to what the client’s goals are when first engaging, which helps us guide them to the right options. Understanding the way their company operates internally and the drivers they have in place that reward growth and product promotion are important to integrate into their selections.

Make competitive benchmarking a part of your long-term strategy

In our opinion, there are several times a manufacturer should use competitive benchmarking to develop or fine-tune a channel or distribution strategy. For any company launching a new product, it’s best to start the wheels in motion 12-18 months from launch. This is particularly true for start-ups who may not have the experience an established manufacturer has from launching many drugs over different periods in time.

Regarding the established manufacturer, they should perform competitive benchmarking every three years to take a close look at distribution and Service Level Agreements (SLAs) to ensure they are as current and competitive as they can be. We have found even established large pharmaceutical clients have distribution agreement opportunities that may lead to channel partner performance enhancements, cost savings or increased operational efficiencies.

For all manufacturers, we advise conducting competitive benchmarking one year after launch for a single product and every two to three years for a complete portfolio. It is also wise to do this when new competitors enter the market or when drugs are nearing their patent expiry. We also encourage clients to consider it when a new indication is introduced.

Helping clients get there is what makes EVERSANA different

Once competitive benchmarking has taken place, we provide clients with options for channel and distribution strategies. Clients can then tailor a channel or distribution strategy to their product, their business needs and to what will ultimately work the best for them and their customers.

What truly differentiates us from other consulting firms in this space is we take this process one step further by offering a capability and service most don’t. Our consultants go beyond offering trade and distribution insights and strategies – they also help implement the strategies you choose. Our real-world, hands-on current experience from being on both sides of the desk gives us the insights and know-how needed to know what truly works, and more importantly, how to execute your strategy.

Our relationships with clients often extend into the implementation phase, as we are seen as a trusted advisor that can help any client operationalize their channel and distribution strategies. Whether that is performing the trade role as a customer-facing contract negotiator with suppliers and distributors or assisting with the hands-on implementation of our client’s channel and distribution strategies, we can work directly with your internal and external channel partners to help you execute and get to the finish line.


Mike has over 25 years of experience in marketing and sales, market access, channel design, sales training and sales management, and has been involved in over 25 product launches in sales, marketing or consulting…