KAM: Does the action match the talk in pharma?

As pharma works to adapt to new commercial models, one key area for change is a new growing focus on payers, institutional customers, multiple decision makers and of course Key Account Management.

We had a chance to chat recently with Thibaut de Lataillade, Global Vice President, Cegedim Dendrite, and Chris Morgan, Principal ZS Associates, on the progress pharma is making in adopting KAM strategies.

eyeforpharma: Chris, where are we with KAM (Key Account Management) in pharma? Is it all still fairly new for most companies?

Morgan: It depends on what you mean by KAM. A lot of people in pharma talk about it as a new thing, but in nearly every other industry, that’s just what sales is; there is nothing else. Pharma, in a way, is the aberration – the outlier. So talk of it being new is a somewhat of a misnomer. Obviously a lot of people in pharma have been talking about this for two or three years, but there’s a big gap between the talk, the aspiration and the measures people are putting in place and another from there to what’s actually happening in the field.  There are pockets of excellence with some skilled individuals, of course.  The real challenge is how to spread this throughout an organization or industry.

Some people are just talking about it still and haven’t really done much – or they’ve run a training session or something like that. Others have taken bigger steps, reorganized some elements of operations, changed roles and hired people. But the question really is what’s actually happening at the end of the day out there with their customers? And of course that is the slowest thing to change.

eyeforpharma: So Thibaut, given this gap between the talk in pharma on KAM and the actual action and outcomes, what challenges is pharma facing as it tries to "go KAM?"

de Lataillade: Anyone who thinks Key Account Management (KAM) is simply about a conversion process of the sales force from reps to super-reps and then into account managers may have misunderstood this valuable concept.

First, it is important to start with a proper corporate strategy. Corporate support is fundamental – senior management needs to understand and believe in KAM. Critical to this step is understanding WHY and WHAT products or areas will benefit from a KAM approach. This essentially means that it’s imperative to have a clear market need identified. The reality of the situation and identification of the market drivers within the marketplace needs to be clear.

If you adhere to these principles, KAM can be an intricate part of the answer to the business transformation which many pharma companies are currently undergoing. But it’s important to recognize that for some companies or some areas KAM is NOT necessarily the correct answer.

Second, it is key to define exactly how your ‘accounts’ should be segmented. There are many different possibilities, from a simple group of 3 doctors working together, to a complex health organization involving healthcare professionals of different types, non-healthcare professionals, financiers, patient groups etc. Or it could be a Managed Care Unit, a Virtual Group, a Disease Network, an HTA (Health Technology Assessment) agency or a PCT (Primary Care Trust).

It’s very unlikely that the ideal ‘account’ will be a homogenous segment as it will depend on a number of factors and variables such as country, pharma company, therapeutic category, product and lifecycle stage of that product.

Third, the question of qualified people needs to be addressed. How are you going to create or find the account managers to manage these accounts? A critical question which must not be overlooked is how to find the right resources to identify, train and recruit the people needed. You will need to devote a good amount of time to ensure this paramount step is properly planned. The reason for this thoroughness is mainly down to the nature of the relationships involved in being a successful account manager. So if you are looking at promoting a talented hospital rep to the role, you must consider that the job will change from a mainly one-to-one (rep-to-physician) scenario to a many-to-many scenario. The qualified account manager will need to be competent on a large number of non-scientific skills, including managing people, understanding everything about the account and the pharma company. Ideally, they should be the person who is already the most knowledgeable about the account you wish them to manage.  Consider your internal resources. All of the interaction with an account must be aligned and well-coordinated with others, both on the pharma company side and on the account side. It’s not easy.

Once you are done with the previous steps, the first action item in the life of a new account manager will be to identify all of the stakeholders and understand their roles/responsibilities. Consider who is charged with prescribing, dispensing, writing protocol, dealing with patients, the public and funding. The next action item is to understand all of the influences (both internal and external) within this account’s network. Who is reporting to whom? Who listens to whom? Who needs to know about things first? Who else (e.g. a KOL, a medical society or a payer) outside the account is highly influential?

The step where most companies currently fail to make progress is when an account management plan enters its first phases of implementation. It is often at that stage that most companies realize that the account strategy has not been thoroughly defined.

Another common problem is that the account team has not been involved in the planning process. However, it is important that before involving the account team, the pharma company defines what is critical and the objectives for this account. In particular, a concise understanding of reimbursement and market access procedures need to have already been mapped out. Most likely, the pharma company has already produced ’outcomes’ or ‘pharmacoeconomic’ data and ‘arguments’ in a format which suits the account. There is no point in pursuing an expensive and difficult strategy if there isn’t any upside at the end of it!  Understanding the account’s objectives is crucial. Sometimes this is easy – people will openly say that they require training, or more information, or they need to reach a certain target. However, often this is unclear and it needs to be worked out in advance.

eyeforpharma: Anything to add to that, Chris?

Morgan: I would say that one of the key things to realize with a move to KAM is it’s qualitatively different than other sorts of capability shifts that people have tried to introduce. So if you think back over the history of SFE, to begin with it was all about getting the call rate up and tracking what we’re doing. But at the end of the day, that’s pretty simple stuff – work harder, basically. 

Then you move to targeting and segmentation and that requires more subtlety, more insight and also a significant shift in capabilities, primarily in places like sales ops, etc.  Again, the idea is quite simple really: some people are worth seeing, some aren’t. So see the people who are and don’t see the people who aren’t. Now, that may not be achieved instantly, but you can go away from a one-day training session and know what you’re meant to do.

The challenge with KAM is that it’s very deep within the organization, especially once it really gets working well. It requires a lot of people to really change their behaviors, not just modify their process or their system. And a lot of the skills that are required from individuals in KAM take a much higher level of judgment than something like targeting does. It’s much more an apprenticed skill, rather than a taught skill – so it takes time.

And if you talk to people at somewhere like P&G, which is one of the companies that everyone cites in this area, they’ll still tell you that even though they’ve been doing it for 18 years now, they feel like they’re only getting some of it right. It’s not like they’ve nailed it all several years ago.

It’s a long journey and there are a lot of potential missteps along the way. One of the other dimensions to it is that KAM’s something you do with customers, not to them. But that requires that your customers come along for the ride with you – and that takes time. You can’t go any faster than your customers are willing to let you go.

eyeforpharma: Does pharma have the right people in place to tackle KAM effectively?

Morgan: Decent strategic account managers are very rare – in fact, they’re gold. And that’s definitely one of the key challenges for pharma. Pharma needs a lot of these people and most other industries don’t have a lot.

When people start looking for real key account managers – not just people called that, but real ones – I’ve never seen anyone find substantially more than one-third of them within their own ranks. Then, they start trying to poach from other companies, and when everyone’s doing that, it means within the industry there’s about one-third as many people as we need. So where are the others coming from?  You’ve only got a few options: you train them up internally, you don’t worry about not having the skill (which is not really an option) or you find them somewhere outside.

But finding them outside isn’t easy. Most other industries don’t have the numbers of people that pharma’s talking about. And the pharma industry is very, very hung up on technical product expertise. A lot of other industries don’t have that in their sales forces, because they have too many products, so they have product guys to help them with that. Instead, what they do is understand their client’s business – but that’s a long way from pharma’s current mindset.

eyeforpharma: Thibaut, do you agree?

de Lataillade: Yes, this is definitely true.

Some potential solutions could be:

-          As Chris has already mentioned, looking closely at account managers in different industries and bringing them into pharma.

-          Finding talented graduates or MBA students, who can be brought into special training to learn more about the pharma industry (see the previously-maligned approach by a pharma company in the UK).

-          Look at consultants, who often have to take care of similar processes regarding understanding needs, finding solutions and ensuring all stakeholders work well together to see them through.

There is no magic solution though – everything involves a lot of work, but this should be justifiable if your long-term corporate strategy is driving a KAM approach.

eyeforpharma: What will push KAM forward in pharma?

de Lataillade: In the future, it may become easier as governments work to ensure that pharma companies and healthcare bodies start to share the same interests and goals (previously, pharma companies simply wanted to maximize revenue, while patients and healthcare bodies wanted to reduce costs). Working towards outcome based goals should allow more opportunities for successful KAM. A true partnership model is achievable and some of the work in the UK with risk-sharing contracts is a great example of this.

Cegedim Dendrite understood very early on the need for integrating KAM models into its Customer Relationship Management (CRM) solution, and has been facilitating the execution of the KAM process for the past few years. It is important to have everything from strategy to implementation catered for within the system.

The qualitative and quantitative information regarding people’s interactions needs to be captured by the CRM system. Also having the KAM tools embedded within Mobile Intelligence software, not just CRM, is important.  The information and data about relationships and influencers cannot be emphasized enough. At each stage in the account management process, you need to rely on different types of relationships, for example, this information doesn’t just need to be held, but needs to be shared and easily found within the software by all relevant stakeholders. Then the information needs to be collected as obviously relationships and influencers are constantly changing.  This is difficult information to manage – for some countries, information like this is held publicly but for some it is very difficult to get hold of. Having it available is obviously a major value-added benefit of the Cegedim Dendrite platform.

Let me tell you about one specific person in order to illustrate how the relationships between stakeholders can be extensive.

This is an example but it is a real person.

• This one woman is the Head of a major Pricing and Reimbursement body in France. She is responsible for ensuring that pricing conditions and transparency on issues such as medical value is upheld. She is working with 26 other members of the Commission to ensure this.
• She is also head of Department of a major hospital in Paris. Within this department she manages 32 healthcare professionals.
• As a trained doctor she is a member of many professional medical communities.
• As a clinician she has also be involved in three major publications in the past 3 years.
• She also works as a Lead Investigator in several clinical trial schemes.

All of the information and influencers from not only her current roles, but also her past roles, becomes a vast amount of information which a well-resourced CRM system can supply. When dealing with KAM, and understanding of these relationships is critical.

eyeforpharma : So what might participants in the upcoming Cegedim Dendrite Key Account Webinar expect to learn about KAM for pharma ?

de Lataillade: Within the upcoming webinar on October 15^th, we’ll be sharing practical information on how to go about managing all of these things.

There will also be some interesting statistics from research which has been done – here’s a taste:

Depending on the country, nowadays 7-10% of all sales reps are Key Account Managers. In France, with 18,000 reps, this number is 10%. In countries where regional power is strong, such as Italy, the percentage is even higher.

However 20-70% of traditional reps do actually perform some aspect of Account Management already. For example: a rep in Barcelona might have 300-400 health professionals in his/her territory, but might also be in charge of 1 proper account, a hospital or an association or a disease network where they are the most knowledgeable person.

Finally – almost 75% of new CRM projects include a KAM solution. In many cases, the KAM capability is now the key driver towards adopting a particular solution.

To learn more about the October 15^th webinar and to register to participate, please visit http://www.eyeforpharma.com/kam09/

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