Healthcare case study

Revenue expansion and margin Improvement for veterinary pharmaceutical producer

Healthcare, root to market

Situation

European provider of animal care products including vaccines, pharmaceuticals and food additives.

Number two player in home market with growth agenda both domestically and internationally.

Significant pressure on margins and volumes from new entrants with product range spanning some 1,500 SKUs delivering varying margins across a wide variety of routes to market.

Modern production facilities for vaccines and pharmaceuticals with spare capacity and attractive gross margins on incremental revenue.

Approach

Wall-to-wall operational due diligence showed low utilisation levels in modern manufacturing facilities with a business plan only seeking to double revenues in the investment period.

With inefficient sales and marketing processes, it was clear that value creation focus needed to be market-facing and we were asked to provide an interim Sales & Marketing Director for the 6 month period needed to find and recruit a permanent replacement.

During this 6 month period, 3 areas of focus delivered a 23% uplift in sales revenues at improved levels of margin and customer service.

  • Market Segmentation: in-depth market review leading to more differentiated service model with re-aligned margins, reduced cost-to-serve, improved seasonal offerings/promotions and re-alignment of the target operating model.
  • Route-to-Market Effectiveness: sales roles, territories and structures were aligned with segment strategies, together with resource allocation in each route-to-market which, in its turn, had been aligned with newly-created target operating models.

    Best practice performance levels were developed for the sales force including:
    • Number of visits
    • Conversion levels
    • Average order size
    • Revenue
    • Gross margins, etc

Trade terms and sales remuneration were realigned and greater transparency of route-to-market performance was generated by implementing best practice sales management processes.

  • Buyer Activation: point-of-sale merchandising standards were developed and implemented, supported by more targeted trade marketing and a combination of sales force and customer training and coaching in the field.

Results

6 month project addressing all routes to market with a focus on growth:

  • CAGR of 23% following completion of project, mainly from increased share of wallet, but also new customers
  • Absolute margin increase >5% through improved control of pricing
  • Improved customer satisfaction
  • 20% reduction in cost to serve

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