Working smarter: sales force strategy matters
Aston Business School lecturer and researcher Graham Leask explained at a recent eyeforpharma SFE conference why sales force strategy matters. It is, he argues, about working smarter, not harder.
By on Jan 21, 2009Aston Business School lecturer and researcher Graham Leask explained at a recent eyeforpharma SFE conference why sales force strategy matters. It is, he argues, about working smarter, not harder.
Tremendous opportunity, Leask says, resides in the vast data in pharmas CRM systems. But most companies, he says, dont use much of the data they collect or, when they do, dont use it effectively.
Doing the right things
Today, just as they have over the past 20 years or so, pharma sales forces cost 25-30% of an average companys turnover, Leask reports. But Aston research indicates that sales forces can improve productivity 30-50%, he says, simply through better alignment and choice of activities. Waste, however, is common and comes at a high cost.
Theres a tendency to take a kitchen sink strategy, where we simply dont leave anything out, Leask says.
But effectiveness, he says, is doing the right things. Instead, he says, we tend to focus on efficiency, or doing things right. Pharma measures call rates and coverage, Leask points out, but we dont often turn that into practice.
One problem thats plagued the industry is the way in which it assesses ROI, he says. Many companies still use linear regression as a means of measuring the relationship between marketing investment and sales. But that approach, Leask argues, is outmoded, inaccurate and generally inappropriate for measuring ROI with typical pharma data.
More productive approaches, using more sophisticated models, are available that better take into account the actual structure of the data and relationships between variables, he says. And things like lag effects (i.e. calls last month will affect sales this month) must be considered, he reminds us.
It also is important to consider the level of analysis, Leask stresses. If you going to unlock the value of the sales force, you must consider your results in relation to where you actually want to apply them, he says.
For example, country level data may be difficult to interpret locally, because market conditions may differ significantly between regions, Leask explains. Results must be adjusted to a common scale to allow accurate comparisons, he says.
Pinpointing whats working and what isnt
Overall results are okay for checking budgets, but to improve ROI, you need to accurately pinpoint whats working and what isnt, Leask says. At one pharma company, we found that 47% of a pretty significant promotional budget was completely wasted and they didnt even realize it, he says.
Its important, Leask says, to consider individual team effects. There are three dimension, he says, of an individual reps approach that are important: planning and foresight, persistence and opportunism. Good reps, he says, plan well and use what they know about their customers preferences and needs to do so effectively and efficiently. Successful reps also are persistent and follow up on their calls and relationships. And last but not least, good reps are opportunistic and able to leverage relationships and experience to get the most out of even sometimes adverse selling situations.
Often when we evaluate ROI, we dont take into account time on territory or relationships built, Leask says. Even though we often have this data, we dont always use it.
Ordinarily, he says, we ask sales forces to follow a sales plan (our intended strategy), but people differ in things like attitude, previous experience, education, and aptitude that making their ways of working all quite different. Most sales forces, Leask says, actually implement 6-8 different realized strategies in response to a prescribed sales plan.
The difference between the most effective of these strategies and the sales force average is often 30 to 50%, he says. So by migrating your reps from the field force norm to one of the most effective strategies, you can increase sales 20 to 30%.
Conventional sales strategies, however, effectively treat reps as homogeneous, with all expected to follow a companys intended strategy, he says. And we task sales management with motivating the field force and pushing sales higher. But this is inefficient, Leask says, particularly when most reps dont actually follow the prescribed strategy anyway.
Actually, on average only 30% of a reps time is spent selling, he says. Of this, as little as 13% is spent selling face-to-face and only 6% of that is actually spent selling product.
Given these facts, Leask says, its not surprising that sales reps individual styles or patterns of working can radically affect results. By pinpointing and understanding successful patterns, companies can push for wider adoption of these strategies, providing a real opportunity to ratchet up sales, he says.
Right analysis
Working effectively, by concentrating effort and resource on the right activities, has never been more important, Leask stresses. And market turbulence makes ROI management critical to firms success. But in the past, measuring ROI has been a problem.
However, recent research, he says, illustrates that through the effective use of the right analysis, promotional resources can be managed more effectively.
Sales forces that traditionally have consumed 25 to 30% of a companys turnover, may now yield productivity improvements on the order of 20 to 30%, which equates to six to nine percent on the bottom line, Leask says.
And recognizing the field force strategies present in your sales teams is key to improving their productivity, he stresses.
Author: Lisa Roner, editor, eyeforpharma