What really moves the meter?
Despite a perception that sales force effectiveness is dead, a return to fundamentals will reinvigorate performance, Marty Nicholas of Blackdot tells Nick de Cent.
These past few years, many pharma sales leaders have effectively been administering the last rites to the concept of sales force effectiveness in the face of the digital onslaught. However, core SFE principles are actually alive and kicking, according to Marty Nicholas, CEO at Blackdot, a global sales performance improvement company headquartered in Australia. He maintains that SFE continues to represent a powerful mechanism for achieving more repeatable and predictable sales performance.
Amidst all the current “noise” surrounding digital solutions, Nicholas advocates a “back-to-basics” approach that is both customer-focused and returns to core SFE principles. “You need to focus on doing a smaller number of high-value initiatives really well to avoid falling victim to low value-adding noise.”
Blackdot has been benchmarking global pharma companies for the better part of seven years in a bid to understand what really drives sales performance. The result of this research has been the identification of six “vital needle-moving insights”. Nicholas describes these as the “vital few”, telling eyeforpharma: “This is the stuff you absolutely need to get right if you want to grow market share".
1. Tightening role and goal clarity for frontline reps
A fundamental challenge for pharma organizations is how to focus salespeople on the right goals. Across all industries, and especially in transactional sales environments, on-target-performance is the most significant outcome-based KPI (key performance indicator) for any sales team. In pharma, however, this approach can fail to illuminate performance variance across an organization’s sales teams (for instance, because of incomplete doctor prescribing data), and often results in seeking alternative, input and activity-biased compensatory data sources. Accordingly, Nicholas advocates assessing a salesperson’s financial performance across two key dimensions – current performance as well as performance trajectory – to gain a more complete picture. He explains: “Ultimately, the measure of success should be a rep’s ability to grow market share in a territory at a faster rate than the competition.”
2. Ruthlessly qualifying targets
Effective qualification originates with tight market segmentation and targeting of opportunities. “The marketing focus should be on explicit segmentation of the market based on upside opportunity, whilst sales need to remain absolutely focused on ruthlessly qualifying or disqualifying those opportunities to ensure you’re not chasing parked cars,” Nicholas emphasizes. “Salespeople need to assume nothing and continually test assumptions: what is the actual likelihood that a doctor will absolutely increase their prescribing volumes?”
3. Transform the sales model
This involves shifting from traditional linear,“selling-focused” sales models –– towards a more fluid and healthcare professional-centric model. Doing so requires reps to be more attuned to understanding individual doctors’ behavior and how to influence them.
“Your sales model has got to set you up to have the conversation the doctor wants to have. The salesperson needs to understand why individual doctors prescribe and behave in the way that they do and also why they should shift.”
4. Get the incentive model right to drive behavior change
Nicholas argues that organizations should aim to emphasize a performance-pay model to encourage behaviors that accelerate market outperformance. “You cannot have a performance culture without positive and negative consequences of over and under performance.”
5. Build frontline sales capability in those areas that move the needle
Building a high-performing frontline salesforce requires pharma organizations to invest in the key behaviors that drive market share growth in each territory. This necessitates deep patient and disease state knowledge, as well as an “understanding of the ‘long call’ and closing tactics that are specific to pharma, as well as the proven methods of influencing and educating health care professionals”. He adds: “You’ve got to understand each individual HCP’s prescribing habits and rationale, as well as their perceptions of product efficacy, to then deploy the soft skills required to engage with this sophisticated audience. Otherwise you just look like a product flogger.”
6. Reinforcing the importance of the first-line sales manager
The final “needle mover” concerns sales managers rather than reps. Nicholas believes that an exclusive focus on reps – at the expense of understanding how to accelerate sales manager impact – represents a massive missed opportunity.
Indeed, he suggests that Blackdot’s benchmarking data indicates that first-line sales managers are so influential in the performance lifecycle of a pharma sales representative that one high-performing sales manager is as valuable as a handful of high-performing sales reps, at a ratio of about one to four.
Within pharma, there is enormous per-capita spend on the field force and brand marketing, but a relative underspend on our sales managers who have the greatest ability to impact sales results".
However, sales managers, with only one head yet wearing many hats, are often stretched too thinly. In today’s economic climate, the bandwidth of the average sales manager can be so severely stretched that they are hard pressed to fulfil their multifaceted role as recruiter, on-boarder, sales enabler and administrator. Their focus is frequently diverted away from where it really matters: managing sales.
”Within pharma, there is enormous per-capita spend on the field force and brand marketing, but a relative underspend on our sales managers who have the greatest ability to impact sales results". He adds: “Higher investment in what good sales management looks like is one of the most cost-effective ways of improving performance.”
Benchmarking of sales managers reveals that those in the top quartile for sales management competencies have a 66% probability that their reps will achieve target; in contrast to all other non high-performing managers, where there is only a 36% probability that their reps will hit their numbers.
High-performing sales managers manage teams that achieve superior results and the cumulative effect of their efforts far exceeds the revenue uplift achieved by a single high-performer working at the frontline.
One major opportunity lies in how sales leaders can help sales managers to coach more. Sales managers need to understand how to adjust their management style according to the performance and behavior of the individual rep – a one-size-fits-all approach will never be entirely effective in improving performance and executing coaching strategies –while still adhering to a consistent set of principles. Nicholas advocates first determining the current performance and “performance trajectory” of each individual rep; then setting objectives; providing support, guidance and coaching; and evaluating performance against a “tight or loose framework” to support individual development goals and needs.
In conclusion, Nicholas is clear that there is no silver bullet when it comes to sales force effectiveness, but that a return to SFE basics represents a massive opportunity for driving sales performance in pharma. He reemphasizes that “focusing on doing a smaller number of higher-value initiatives really well” to cut out the noise is what’s required to making a significant difference to sales performance.
Marty Nicholas, CEO, Blackdot will be speaking on the subject of “Building a performance culture in Pharma: Six vital needle-moving insights gleaned from global benchmarking data” at eyeforpharma Barcelona 2015, 24-26 March 2015, CCIB, Barcelona.