The ACID test for convention investment optimization: Using the average cost of incremental details to create a convention investment decision tool

Abstract

Medical conventions accelerate detailing by providing more details per day than can be completed in the field, and therefore provide a valuable marketing opportunity for pharmaceutical companies. Conventions, however, also represent a significant investment, and for that reason it is important for managers to have a decision formula based on detailing to help determine the level of spend. Because field sales costs are sunk and conventions are an additive cost to companies, to be cost-effective a convention must: (a) generate incremental details over what would be normally obtained in the field; and (b) demonstrate that these incremental details will be provided at a cost lower than the field cost. This article proposes a formula that enables managers to use average cost per incremental detail to make budgeting and spend decisions for conventions.