Can CSOs lead the way?

pharmafile | December 7, 2005 | Feature | Sales and Marketing |   

With the spotlight shining on pharma sales teams, companies are exploring a variety of ways to improve productivity and effectiveness. The explosion in innovative mobile technologies may offer some solutions to apparently intractable problems faced by pharma companies as they wrestle with the problems associated with 'optimisation' – the new Grail in sales and marketing.

Technology may provide some answers; another option lies with contract sales organisations (CSOs) – offering flexibility and risk management they never looked so attractive. As they fight it out for profitable sales team builds, the ROI issue comes sharply into focus – what better way to differentiate yourself as a provider than showing greater effectiveness through a range of bespoke tools.

Hardly a week goes by without further analysis showing pharma sales teams making less impact than in the past. A potent mix of shrinking prescriber availability, flattening sales growth and a paucity of new blockbusters in the pipeline is causing a lot of stress at corporate HQ. With the cost of running a sales team estimated to be up to 40% of total marketing spend, productivity questions are to the fore.

In the US, where pharma sales recruitment has doubled in recent years, prescription generation has only increased by 15% – an expensive way to generate growth. As customer availability falls, the final damning statistic is the erosion of face time or selling time – now at an all-time low of less than 25%. Clearly this is not a sustainable picture – reflected in the headcount reductions in recent months, with Pfizer, GSK, Wyeth, AZ and Merck all cutting their record-sized salesforces.

CRM – what CRM?

Interestingly, as this search for greater effectiveness has been going on, pharma sales teams have been tooling up with the latest mobile communications technologies. No team is complete without the standard kit of laptop and mobile phone, with many rolling out PDAs and other innovative devices.

Customer relationship management (CRM) – imported from other sectors like finance and FMCG – must be one of the most overused acronyms in the industry, but in truth does not sit well with the pharma industry. To UK pharma CRM is strictly limited to call report management – electronic record keeping and territory management – nothing to do with building customer relationships in reality.

In the US the picture is different – with individual physician prescribing data available, the deployment and use of mobile/wireless technologies is far more advanced. There is a greater focus on pre-call planning and individually tailoring calls and details using such specific data – 'optimisation' has moved up a gear.

True CRM allows visibility and contact across an organisation – with inputs from all customer-facing staff: contacts from clinical research, marketing or medical department as well as the sales rep. Current technology is deployed to capture fieldforce activities and to supply vital sales data and customer availability at 'brick' level to the sales team. The mix of hardware, software and communications is beginning to drive the targeted approach and rapid data recording.

CRM is at the heart of a 'hi-touch' relationship – making the most of any of the touch points that a supplier has with its customers. The idea is a simple one – each and every communication is targeted to move the customer along a relationship pathway as they become increasingly familiar with goods and services, aided by a growing personal relationship. This is much more than call reporting and seeks to make each customer transaction more individual.

Breaking the habit of a lifetime

"I think that we can see that the Industry is finally moving away from quantity driven activities," says In2Focus director Julian Tompkins. "Quite simply, the old quantity argument – simply making more noise, or share of voice  has stopped bringing in the incremental sales in lots of product scenarios. No doubt there will still be some it is relevant for – blockbuster early launch phase and the like, but for many portfolio management questions, it is inappropriate."

Quality has always been seen as the opposite of quantity within the pharma industry, but driving up quality may be a good route to achieving optimisation. Advocating a more targeted approach, Tompkins believes that technology offers a lot of solutions.

"All pharma companies are swamped with data – one of the things that technology offers is the good analytical tools at ground level – making sense of the data is one of the challenges."

In2Focus is well positioned to comment upon such trends – as a supplier of contract representatives and a major player in the electronic territory management systems (ETMS) market. The In2Focus system, ACTIS, is now the most widely used product in the UK market, overtaking the industry standard, Siebel.

"ACTIS can drive performance far more than other products – it's more than just call reporting – our clients can see real improvements in productivity," says Charles Roots, director of healthcare technologies at In2Focus.

What makes a good system? Many systems out there effectively penalise the top performing sales people  because they create a vast amount of extra admin work on top of a busy day. What message are you sending your salesforce  particularly your top performers, if basically, the more people you see the more work you create? A critical part of ACTIS is the speed of call entry – it's designed to take 15 seconds or less," continues Roots.

You can lead a horse to water…

"There is all of the technology currently available to improve optimisation," comments Richard Purchase, director of service development and IT at Innovex.

"The delivery of good usable customer data at territory level is making a huge difference to performance – one of the biggest challenges we all face is engaging the sales teams with the technology. The sales people need to see the benefit of exploring what these ETM systems can really do for them – at the moment they are hugely underutilised."

Charles Roots agrees, saying: "ACTIS can deliver a terrific amount at territory level – in truth very few actually use the functionality – I suppose it's a bit like your mobile phone which can carry out hundreds of functions, where most users only ever get to 20% of it."

Making it work

According to Tompkins system implementation is critical and he says: "Gone are the days of the sales director standing at the front of the conference hall saying 'press enter' and see what happens. We use a range of very different training techniques – interactive training, quizzes and treasure hunts. Unless the sales team understands the real gains early on, they never use the system fully – the training and support is constant, otherwise the reps slip back to the basic requirements."

First line managers are often the key to a successful implementation. "It's not just the system benefits to the individual reps – it's about the whole enthusiasm for the system and how it is both viewed and used by the sales managers. For too long, ETMS has been used as a policing tool for control – they can do so much more to empower representatives and really leverage performance," says Tompkins.

Seasoned representatives know their systems well – increasingly, it's becoming an interview question as prospective candidates will want to know which ETMS is used and what plans there are for investment in new mobile technologies.

"One of the biggest steps forward in this area is our new partnership with IMS – to deliver a whole new raft of data at territory level to support Innovex teams on behalf of clients," adds Purchase.

This will give Innovex teams a new edge in the quest for greater sales focus – with sophisticated "relationship mapping' of prescribers at territory level – unlocking the discreet links between PCT policies, local hospitals and individual preferences.

Quality versus quantity

If the drive is on for quality, then who is in the best position to deliver it? CSOs have often been viewed as second class citizens compared to pharma company headcount – a short-term fix or a career step for those involved.

Across the CSO industry there is the standard spectrum – from the providers of 'noise' to the providers of experience and expertise. Managing director at AmDel Services Duncan Morris thinks the future lies in the higher quality end.

"AmDel believes that to be able to generate high levels of sales you need to recruit the very best people and pay them well. We have one-day assessment centres, which are rigorous and are a pass or fail. The bar for selection is never lowered however much pressure is on the process," he says.

"As companies outsource more of their resource they have to be confident that the outsourcing company has quality people that represent them to the highest standards."

Flexibility used to be the main benefit of CSOs against in-house infrastructure – something that is proving very useful. The recent Vioxx-related job cuts at Merck were made a lot easier as 50% of resources were outsourced. This flexibility, combined with effective technology, good analytics and data showing the high quality of face-to-face customer interactions, make outsourcing an increasingly compelling case.

"Technology obviously has its part to play  but high quality people, able to use the available technologies fully are critical in the productivity equation," says Chris Phillips, managing director of Chase Recruitment and Selection.

"Whether they are high quality specialist nurse advisors or healthcare account managers the Chase outsourced teams have a great track record of getting results."

What lies ahead?

What does the future hold? Some things look certain: there will be fewer representatives, often selling more products and an increase in specialised products offering benefits to specific patient populations.

Pharma is a conservative industry – perhaps it's no surprise to see really quite slow adoption of technology, from UCB rolling out the first PDA system in 2000 there hasn't exactly been the headlong rush that the US has seen. With many commentators believing that the existing technology can do the job, it may be left to the more innovative and competitive CSOs to lead the way.

Is technology important to the CSO offering? "It's a must have in my opinion," says Innovex's Purchase.

"Undoubtedly," agrees Roots at In2Focus. "We need to constantly move the game forward, providing clients with faster feedback, better results, with the potential for 'real-time' call reporting and updating – it's all very exciting."

Within the CSO market, the UK is highly developed – certainly compared to the rest of Europe or the US – with 25-30% share of the total UK salesforce.

"There is certainly room to increase that share over the next few years – maybe up to 40% of the total UK salesforce – as companies become increasingly risk-averse and can understand more clearly just what a CSO can deliver in productivity terms," says Tompkins.

Whether it's a contract job or an in-house sales team, clearly what goes on in that call and what goes on around that customer from other company contacts lies at the heart of the issue? The technology is there – but is the willingness to move the customer relationship beyond the basic transactional product detailing there?

Surely it's no surprise that the last ten years of higher volume sales activity is now showing all of the hallmarks of suffering from a l'ack of quality investment' – with higher and higher call numbers yielding diminishing returns.

Technology should help more companies manage the apparent dilemma of pursuing either quality or quantity. With the rise of specialised account managers focusing locally on delivering solutions, high value analytical data will allow a lot more local direction to sales teams within individual PCTs.

At the core of the question about optimisation in the UK is the whole strategic issue about how the industry perceives its customers. Falling productivity may be the wake-up call that is needed to inspire pharma to 'raise its game' beyond seeing 40,000 GPs as 'targets', rather than customers.

"Those CSOs that provide traditional contract salesforces have had to make sweeping changes recently. Decisions by their clients have forced them into significantly downsizing these sales teams," says Phil Miles, business development director at Alchemy.

"Nowadays most pharma companies only have limited need for massive contract sales teams that simply deliver a quantity of calls. Changes in decision-making within the NHS and the continued reluctance of GPs to see reps means companies are using more targeted and focused contract salesforce activity. "

Once pharma companies ask bigger questions, like, 'Where do we want our relationship to be with this prescriber in, say, five years?', then the 'call value' will increase. Only when there is something more than a mechanised tick in a box going on will customers notice the difference and respond.