Seven quick fixes to sales force effectiveness
Dr. Andree Bates
Sales force costs are undeniably one of the largest costs for a pharmaceutical company. However, the effectiveness is clearly not standing up to return on investment scrutiny or the sales force head counts would not be being cut as they are in many of the large pharma companies. This may well be part of a good solution as we all know the 80:20 rule i.e. 20% of the sales force are giving you 80% of your results. But what else can be done to improve our results? This article provides seven areas that seem to have room for improvement in many pharmaceutical company sales forces.
1. Targeting and segmentation
Why are many of the doctor target lists the same for all brands (at least in primary care) leading to the problem of all reps visiting the same doctors and causing the issue of overload for the doctors? 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 pharma buy their targeting data from the same sources, so that makes some sense as to why it is all the same. But really, does it make sense to assume that just because the physician prescribes a lot of drugs in our Rx area, they will be a perfect target for our sales force and respond how we want them to 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 issues. 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 our competitors, let’s consider being smarter about this. 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 our products. Consider ways you could do this for your brand.
2. Messages that drive prescribing
In so many of the analytics we conduct we see that the message focus is not quite right. Yes, it does differentiate the product, but it is not based on what is driving prescribing the most. The sales teams need to be focused on the messages that will drive prescribing in their target physicians the most. Differentiation is great, but if the differentiator is not the thing that is driving prescribing, then why only focus on that? We have analytics on numerous brands that show the sales teams are focused on messages that are not driving prescribing. For example, say you are focused on the fact that your brand has less pill burden and, therefore, better compliance. Great – definitely differentiating it! However, is it driving prescribing? I could show you data in which we segmented non-prescribers of a product and high prescribers of a product, and the non-prescribers and high prescribers both equally got that message strongly…but it was not moving the non-prescribers to become prescribers at all. Other messages would have, but not that one. It is critical that you get the message focus onto the messages that will drive prescribing rather than merely the ones that are easily differentiating you. I can cite numerous client analytics wherein we managed to refocus the messages to the ones the analytics showed were the key driver messages. Lo’ and behold, in every case the market share increased and in several recent examples, the market share doubled magically. Don’t underestimate the magic of focusing on the key driver messages for sales force effectiveness.
3. Sales force selling models
This is an interesting area. I have heard Sales Directors 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 would be unable to do so also? Additionally, if we are restricting the number of products the rep can detail, maybe they are going to be limited in terms of offering the physicians the product mix that best suits their individual needs. And let’s not forget the cost advantage of multiple products and one rep. You might ask: would it work for my product mix and country? We can find out. By employing analytics, different sales force selling models can be compared and contrasted to see which one is having more prescribing impact, then the relative costs can be taken into account and the cost benefit can be assessed accurately. Are you doing this?
4. Incentive compensation planning
The way a sales person is compensated can be a potent tool for driving their success. A well planned and structured compensation package communicates corporate and personal objectives to the sales force, while a poorly structured compensation program can actually push salespeople to work against corporate goals. A recent discussion with a sales rep from a top pharma company in the USA 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 in such a way as 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 been mathematically analyzing this for one client and the resulting 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 while implementing 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 prove beneficial in providing the information required to measure the effectiveness of compensation plans against strategic objectives.
5. Selling versus account management
The whole area of account management was pioneered by Takeda Pharmaceuticals in the UK several years ago. Now the concept is becoming widespread. It is a concept worthy of consideration if you are not already doing this. Given that there are increasing numbers of group practices, hospitals and integrated health systems, as well as the increased influence of Managed Care organizations, PCOs and other payors, the doctors that reps traditionally called on have lost quite a bit of their decision-making power. One option being employed by some pharma companies is 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. This can be enhanced even more by using the segmentation analytics described earlier in this article so that 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 of measuring sales force effectiveness 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. Such data is relatively easy to collect and can be measured directly against sales and market share data. Unfortunately, this is not effectiveness but efficiency. By having this as a 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. The result is that the call does not seem effective and yet the ‘calls per day’ target is being met or exceeded. This highlights a key area for improvement but also shows that the call rate per day in itself is not the best metric to use. 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 much these various activities are driving prescribing. They then need a way to translate these understandings to strategies that flow seamlessly into sales strategies and sales 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, neither of which is likely to produce much in the way of bottom-line results. If we can change the way we measure and compensate the sales force to discourage this kind of behavior, then we don’t need to avoid these doctors completely as in small ways they can slowly add up to increased sales but they should not be targeted with an expensive method such as sales force. Would they not be a prime candidate for an inexpensive ‘e’ solution? Once that grew them to a sufficient level (as long as it took their segmentation drivers into account in order to do so), then when they were financially viable to do so, the real sales reps could become involved in direct selling.
Sales force effectiveness is a multi-faceted issue, but one that can be dramatically improved with judicious use of analysis through analytics of the various components of the piece.
About the author:
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).
What do you see as key to sales force effectiveness?