Are your sales teams dedicated?
pharmafile | October 15, 2003 | Feature | Sales and Marketing |Â Â CSO, contract sales, contract sales organisation, dedicated, syndicatedÂ
The origins of the 'contract' salesforce began in the early 1980s when companies such as Innovex saw a need for pharmaceutical companies to add to their salesforces at short notice. These extra resources were needed when vacancies arose, when a company needed to launch a new product or bolster the fortunes of an existing product when competitor companies launched their own new products into the marketplace. By quickly filling gaps or adding to resource levels, the company could maintain or even increase the noise level or exposure of the particular product concerned, with the result that sales were maintained or even rose.
The contract sales industry has grown rapidly over the last ten years or so and as well as individual contract representatives being available whole sales teams can now be accessed.
What exactly is a contract sales team?
Drew Harrison, Business Development Director of Ashfield Healthcare, a specialist pharmaceutical contract services provider, provides a definition. "A contract sales team is simply an additional selling resource that companies can utilise for different projects and for different periods of time. How this additional resource works is determined by the specific needs of the customer company." Drew explains that there are two types of contract sales team, 'dedicated' and 'syndicated'. "A dedicated team is dedicated to one customer and usually has a very specific remit. It may be a team working solely in primary care or a nurse advisor team working on a particular therapy project, but the essence is that the team is working on behalf of one company only. Syndicated teams on the other hand, will promote a number of different products for several non-competing companies."
What's the advantage?
Given that the contract sales market has grown rapidly over the last 10 years companies must be seeing advantages in taking on such an additional resource. "The biggest advantage to pharmaceutical companies is the flexibility that a contract salesforce can bring to a company's promotional activities," explains Drew Harrison. "A company can take on a dedicated salesforce for negotiated periods, such as six or twelve months, in order to improve prospects of an existing product or to get the best possible exposure and sales from the launch of a new product. The company can dictate where the dedicated teams work, which customers the team targets, and specifically how the sales representatives are measured."
Gary Hall, Marketing Director at Innovex, another specialist contract sales organisation outlines the advantages of the syndicated salesforce. "The syndicated salesforce can be very cost-effective because you only pay for what you utilise. If you want to promote a seasonal product, for example, then you can buy an optimal 'detailing' or selling position for that product, for the duration of that products season." Gary adds that there are other benefits to the syndicated approach. "If a company purchases a third place detailing slot then our research shows that 95% of the time that product will be detailed. Many company representatives, because of bonus incentives on first and second line products tend not to sell effectively the third line product."
Another major advantage to companies is that of costs. As contract sales teams costs are variable and not fixed, the hiring company can control its balance sheet more effectively. Costs such as salary, pension, expenses, car and medical cover are all taken care of by the contract sales organisation, thus lessening the administrative burden that all the fixed costs entail.
My own personal experience of contract reps as a manager and then as a coach in the early 1990s was very mixed. There appeared at the time to be a lack of training of these representatives and in some cases there were questions around the actual recruitment process with the result that the suitability of the contractor to the sales role had to be questioned. Having said that, I came across some excellent contract representatives and although in a number of cases, their progress was not helped by parent company representatives and managers who treated them with a degree of arrogance and mistrust. This often led to the contractor becoming de-motivated as they failed to be accepted as one of "the team". As a coach, many of my initial dealings with contract representatives were centred on how best they could manage this mistrust and arrogance and learn how best they could gain respect and enable themselves to be fully integrated into the sales team.
The importance of management
The biggest challenge I have found to contract teams working effectively with their company counterparts lies in the ability of the managers. Provided that the managers are effective in ensuring good team working and communication exists between the salesforces then both the contract force and the company force can work in harmony. Failure to ensure that this effective team working happens can result in conflict, with missed opportunities and lost sales. My own experience has seen this happen on a number of occasions and it has always been due to inadequate management, so I was glad to hear that contract sales organisations put as much effort into the training of their managers as they do with their sales representatives. Both Innovex and Ashfield emphasise the efforts they are making in order to train their representatives and managers to a high standard. Ashfield has just completed a purpose-built training centre, while Innovex has introduced Regional Business Manager and Representative standards programmes, which define role expectations so performances can be monitored and tracked, making sure standards are reached and sustained.
The GPs' view
So, contract salesforces offer pharmaceutical companies major advantages of not only extra resource but also of flexibility and costs. But what are the opinions of the customers? I interviewed a number of general practitioners and their reaction was mixed, although in the main positive. One GP was completely anti-contract sales teams and would only entertain representatives who were fully employed by the pharmaceutical company. The attitude of the others was summed up by a young GP who commented: "A few years ago when I first encountered contract reps I was not too impressed with the fact that they did not 'belong' to a particular company. I felt that they didn't know their facts as well as the company rep and on many occasions they would refer me to the company rep for more information. However, I now believe that their training is excellent and I have been impressed by their knowledge of the products they are selling. In some cases it is better than the actual company reps! All in all, it depends really on the person and whether they have the personality, the professionalism, and the skill and knowledge to impress me. As long as I find their visits educational and they respect my time, I will see them, regardless of which company they represent."
It looks, then, that specialist contract salesforces are here to stay. They offer increased resource that can be flexibly deployed, be cost-effective and produce results both in terms of call activity and ultimately sales. It also appears that their training is a lot more effective than it used to be and that provided management ensures proper integration and team working with the contracting company then a harmonious and productive working relationship will follow.
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