Seven quick fixes to sales force effectiveness
The sales force is undeniably one of the largest costs for a pharmaceutical company, but is it delivering all that it could for your company?By Oct 15, 2009 on
The sales force is undeniably one of the largest costs for a pharmaceutical company, but is it delivering all that it could for your company? For many large pharma companies, effectiveness is clearly not standing up to return on investment scrutiny, or rep numbers would not taking the hit they are across the industry. While cuts may be justified based on the 80:20 rule (i.e. 20% of the sales force are giving you 80% of your results), what else might pharmas do to improve their results?
Consider seven areas likely to have room for improvement in many pharmaceutical company sales forces:
1. Targeting and segmentation
Why are so many of the doctor target lists the same for all brands (at least in primary care)? And why is it that we think that all high-decile doctors who prescribe in our Rx area should be our targets? One reason could be that most pharmas buy their targeting data from the same sources, so its no surprise its all the same. But does it make sense to assume that because physicians prescribe a lot of drugs in our Rx area, they will be a perfect target for our sales force and respond as we wish (i.e. increase their prescribing of our brands)? People (and doctors are people after all) respond differently to different kinds of sales and marketing based on a host of psychographic and demographic factors. Clearly, volume-based targeting and segmentation does not take into account other types of key differences in physicians that can often make a large difference to our results.
To improve targeting, rather than target the same doctors as their competitors, pharmas must get smarter. Why not use analytics to look at different groups of physicians segmented on a host of key variables and understand drivers based on sub-groups of physicians? This will show what the levers are within each sub-group that would convince them to change to your products. Consider ways you could do this for your brand.
2. Messages that drive prescribing
In so much of the analytics we conduct, we see the message focus is not quite right. Yes, it differentiates the product, but often it is not based on what is driving prescribing. Differentiation is great, if its not what is driving prescribing then its the wrong focus.
For example, you might focus on the fact that your brand has less pill burden and, therefore, better compliance, and thats definitely differentiating! However, is it driving prescribing? Eularis has segmented non-prescribers and high prescribers of a product, and shown that they both equally got that message but it was not moving the non-prescribers to become prescribers at all.
Our analysis shows that companies can refocus their messages to the ones that prove to be the key driver messages, and lo and behold, in every case, the market share increases. In several recent examples, the market share even doubled magically. So dont underestimate the magic of focusing on the key driver messages for Sales Force Effectiveness.
3. Sales force selling models
Sales directors often argue that sales effectiveness diminishes when reps are required to detail physicians on more than two or three products. But is this actually true? In many complex sales industries (e.g. high tech, etc.), professional salespeople sell a wide range of highly specialized products and services so why do we assume that pharma sales reps are unable to do so?
In fact, if we restrict the number of products the rep can detail, they may not be able to offer physicians the product mix that best suits their individual needs. And lets not forget the cost advantage of multiple products and one rep. You might ask: would it work for my product mix and country? You can find out. By employing analytics, different sales force selling models can be compared and contrasted to see which one has more prescribing impact. Then the relative costs can be taken into account and assessed accurately. Are you doing this?
4. Incentive compensation planning
Sales rep compensation can be a potent tool for driving success. A well planned and structured compensation package communicates corporate and personal objectives to the sales force, while a poorly structured program can actually push salespeople to work against corporate goals.
A recent discussion with a sales rep from a top pharma company in the US revealed a disturbing fact: he did just enough to meet his numbers and be on the golf course by afternoon. His compensation package was tied to measurement of activity, which he met, but his bonuses were not set up to motivate him to really move his sales dramatically. He said he had a good life, good package, why bother? Very alarming indeed!
How can you motivate the sales force to really maximize their sales and effort? One way is by analyzing compensation packages that offer significant benefits for results. Eularis has mathematically analyzed this for one client and sales impact after implementing the changes has been nothing short of profound.
This must be considered carefully. In order to keep the best performers, and lose the poor performers, companies need to reassess their sales force pay packages. Using a variable pay package is one way to keep the base cost under control and still implement a motivating factor to drive a sales team towards fulfilling corporate objectives. An incentive compensation program also provides sales managers the metrics they need to monitor the performance of their sales forces - including revenue and quota attainment. This can also provide the information required to measure the effectiveness of compensation plans against strategic objectives.
5. Selling versus account management
Account management was pioneered by Takeda Pharmaceuticals in the UK several years ago and now the concept is widespread. So if youre not already doing it, maybe you should be. Given the increasing numbers of group practices, hospitals and integrated health systems, as well as the increased influence of managed care organizations, PCOs and other payers, its no surprise that doctors have lost quite a bit of their decision-making power.
In response, some pharma companies are moving to an account management sales model that segments customers and matches the appropriate sales approach to each account's strategic importance and buying preferences. And this can be enhanced by using the segmentation analytics described earlier to ensure the real drivers for each group are taken into account. This approach can significantly cut sales related costs (by around 20%), while increasing sales effectiveness.
6. Performance measurement and optimization
Part of the problem with Sales Force Effectiveness is how it is measured. Common methods revolve around frequency of calls made by sales reps to target physicians, with the underlying assumption that higher numbers of sales calls will equate with greater product sales. Although such data is relatively easy to collect and assess, this is not effectiveness but efficiency.
With this metric, sales reps feel compelled to see as many doctors as they can to reach their call targets, but the calls are less productive and often to the wrong doctors. To improve sales force performance, sales and marketing directors need a more in-depth understanding of the complex and dynamic interplay among the various elements and activities involving the sales force and how these activities drive prescribing. Then they must translate these understandings to effective sales strategies and tactics. Eularis 94.8 Analytics is one way that these elements can be seamlessly integrated.
7. Integrating e into the sales force mix
Many reps visit offices of both low value doctors and no-see physicians, with little likelihood of producing bottom-line results. But if we can change the way we measure and compensate the sales force to discourage this kind of behavior, we wont need to avoid these doctors completely. Rather than spending valuable sales force time, these physicians could be targeted with less expensive methods. Would they not be a prime candidate for an inexpensive e solution? Then once their interest was peaked (taking their segmentation drivers into account), sales reps could begin calling on them again, perhaps with more to show for their time and effort.
Sales Force Effectiveness is a multi-faceted issue. But SFE can be dramatically improved with the judicious use of analytics of the various components of the whole.
For more information on any of the analytics mentioned in this article, please contact the author, Dr. Andree K Bates, at Eularis. www.eularis.com
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