Measures of Sales Force Effectiveness: Are You Measuring The Wrong Thing? --- Part II

As discussed in Part I of this article series, many studies are highlighting the fact that pharmaceutical sales force productivity has declined.

By Anonymous (not verified) on Mar 5, 2008

As discussed in Part I of this article series, many studies are highlighting the fact that pharmaceutical sales force productivity has declined. Research by Novartis shows despite the fact that the top 40 pharmaceutical companies in the US doubled their investment in the sales force over the past five years, prescriptions only rose by 15% in the corresponding time period. Research by IBM concurred with this result and found that every dollar spent on the sales force generates just $10.30 in sales. This may sound on the surface like a strong return on investment, but in reality, this represents a 22% drop in return since 1996. IMS Health reported that there was a 23% decrease in productivity per detail in 2005 compared with 2004 (measured as dollar growth/detail for all products recording over 10,000 details in the US each year) even excluding the impact of the Vioxx and Bextra withdrawals.

Interestingly, a recent survey analyzed the relationship between a successful pharmaceutical sales program and the ability of the sales force to communicate the marketing message. The survey reported that less than 7% of respondents felt that customer communication was a real strength. But when these companies were taken as a group, it was found that sales teams able to project consistent and relevant messages to their clients were associated with higher rates of product cross-selling and achieved better product launches, but relied much less on product discounting compared to companies that found staying on-message with customers more difficult. This survey emphasized the need to assess the impact of the communication between the sales rep and target physician, in addition to more traditional methods of measuring sales force effectiveness to show real sales gains. Therefore, if a physician is receiving relevant and consistent market messages that answer the specific needs or goals of that physicians practice, then the amount of sales calls needed to achieve this becomes less important.

Taken from a physicians point of view, the average physician today is on the receiving end of any number of sales call enquiries. Not only that, the physician is also likely to be more than capable of finding out information on a particular product via the Internet, including access to user-written reviews, comparative pricing and company information. Therefore, a sales rep that calls once with the right attitude, technical information, and a marketing message compatible with the physicians practice, will be far more effective in actual financial impact from the call than a sales rep who calls half a dozen times with more hazy marketing messages (and often to low potential doctors as they are trying to meet their sales call target numbers!).

Companies need to refocus on real sales force effectiveness (rather than simply efficiency and labeling it effectiveness) and analyze this to ensure they are delivering the right messages, to the right target audiences, with the appropriate influencing behaviors. Only by doing this, will real returns be possible from the sales force without wasting resources. As mentioned in Part I of this series, there is a very big difference between efficiency and effectiveness in this area, and this difference seems to be the heart of the pharmaceutical productivity problem. While the industry has described their metrics and analytics as effectiveness, they are actually focusing on efficiencies.

Sales efficiencies includes things such as procedures, calls per day, minutes per call, cost per detail, cost per minute, share of voice, and so on.

Sales effectiveness is focused on productivity, looking at the impact of behaviors on prescribing, the impact of each interaction, content requirements of interactions for improved financial return from the sales activity for the brand, and so on.

The added bonus is that by adding more focus on real effectiveness, quantifiable measurement of sales force behaviors will also be possible. This makes the pill even sweeter, as the improvements in rep return on individual activities can be clearly quantified. Now, I am not saying dont measure efficiency. The reverse, however, I am saying dont just focus on efficiency as effectiveness is equally, if not more so, important. The industrys current focus relies too heavily on efficiencies (measuring call rates) and not enough on effectiveness (despite paying it significant lip service and then discussing efficiencies!). Real sales force optimization will only happen when companies successfully integrate efficiencies and effectiveness to provide an approach that improves strategic planning and sales forces productivity and measurable financial return on individual activities.

The direction from here is clear: companies need to refocus on effectiveness. Sales managers must measure actual effectiveness, instead of efficiency, to ensure they are delivering the right messages, to the right target audiences, with the appropriate influencing behaviors. Performance metrics-based quantitative data, such as the number of calls made, the amount of contact time achieved, or the number of names contacted from a list of target physicians, are relatively easy to measure for the sake of performance review. However, they are of dubious value in terms of achieving the ultimate aims of the company in terms of increased revenues, better margins or improved market share.

Case study: primary care brand stagnated
A primary care brand was in a crowded market place at a decent market share and had been growing well until the past two years. The brand team regularly commissioned a number of primary market research studies including Detail Follow-ups (DFUs) to understand how the detailing was influencing doctor perceptions of the product, and how the sales force was performing. They had data on message recall and on share of voice, and knew they were performing at the same level as key competitors in this regard. Using this data, they had formulated some changes, but alas the results remained the same. Then the team commissioned Intent to Prescribe research to uncover the physicians intent following the changes implemented. Physicians said they intended to prescribe more of this brand, but still sales stayed static.

Undeterred by failure to impact a change, the team searched for other methods to measure performance and uncover real influencers that would have more actionable recommendations. To answer these questions, the team turned to Eularis 94.8 Sales Force analytics. They were eager to know:

1. How effective are our reps in delivering key messages?

2. Is our key message differentiated enough against competitors?

3. How effective are our messages and should these be changed?

4. Which of our messages provides the most influence on changing actual prescribing behavior?

5. Are our sales materials providing the appropriate messages for the most influence on prescribing?

6. Are our sales materials providing the best use of the messages?

7. Is our call frequency appropriate, or should it be changed?

8. How much market share is our detailing getting us compared with our promotional activities?

9. How should the focus of the detail call be broken down?

10. What activities should we be teaching the reps to be able to do better?

11. We know our share of voice is the same as our key competitors, but what are they doing differently than our sales force?

The Eularis analytics system was implemented. The analysis showed that the field force activity (quality) was just supporting the current market share, as evidenced by the flat line (i.e. equivalent to the current market share of 24.7%), but would not be effective in growing the market share if it continued as it was, despite the results of the intent to prescribe research. When looking at the overall analytics for the brand it could be seen that, although the product messages were reasonably well entrenched from all the previous good work, the promotional effort was now lagging behind key product messages it had previously established. This means that the brand could defend its current market share, but not necessarily get more market share from their budget if they continued doing what they were doing.

Recommendations around messages, rep activity, detail aids (and promotional activity reallocation, although that is not within the remit of this article) were followed and the results for the brand six months later were clearly seen. The market share had increased by 2.6% to 27.3%, but importantly now, the field force could be clearly seen to be having a real and measurable impact on market share results.

Significantly enhancing productivity and performance is not about increasing or decreasing sales reps numbers or call rates, it is about getting the right messages, to the right customers, with the right behaviors. Although this is not a precise science, analytic tools such as the one shown in the case study, are highly accurate in assisting sales managers to tackle this task with a high degree of confidence.

The Eularis Sales Force 94.8 Analytics Tool (www.eularis.com) helps companies know how much their sales forces are contributing to their brand growth and overall company growth, as well as identifies territories with the highest business potential. It also reveals what messages and rep behaviors will have a financial impact, and how these behaviors and messages should be time-allocated in a sales call. This tool collects vast quantities of data from physicians and then validates the data against prescribing (as what they say and what is actually influencing them are usually two very different animals) and uses this data as its evidence base. Then powerful analytics are applied that help sales managers identify what is needed and how to change for maximum sales growth.

As the pharmaceutical marketplace grows more complex, sales force teams must be adaptable, credible and effective to meet the increasing demands placed upon them. Just as the market is evolving, as are the tools and techniques available to the sales force, so should the metrics and criteria used to measure the effectiveness and efficiency of the sales force. Using newer sales force analytics, such as the Eularis Sales Force 94.8 optimization analytics, a sales manager can easily identify their return on investment, where it stops and where it starts to plateau.

For more information, contact the author, Dr. Andree Bates, at Abates@Eularis.com, or visit their web site at
www.eularis.com.