Perfect pitch: has your salesforce got it?
pharmafile | June 25, 2007 | Feature | Sales and Marketing |Â Â sales, strategyÂ
Back in the 70s, pharmaceutical sales reps were detail men. They spent more time giving details to doctors about their medicines than on the hard sell. This indirect sales strategy led to doctors prescribing more, and ultimately to greater sales. But, although the industry's practice of detailing has not changed much in 30 years, the look and role of these reps is very different now.
Today's pharma reps face far greater challenges than their predecessors. They used to spend years building close relationships with doctors – now, a rep can have as little as 90 seconds to make a pitch to a doctor.
Though often highly educated and skilled salespeople, the pharma reps face impervious doctors, tougher guidelines on physician interactions, and fierce competition from hordes of rivals. Fewer new drugs are appearing on the market for them to sell, and as drug companies face competition from generic manufacturers whenever a patent expires on their best-sellers, there is pressure on them to boost sales.
One only has to look at the complex issues facing pharma directors when considering how to allocate their resources between traditional representatives and the newer breed of healthcare development managers (key account managers) in the new NHS to understand that they face a confusing market.
The factors holding them back are many and complex. Strategic decisions are difficult in the varied NHS environment, NHS customers must be approached differently at various levels and multiple strategies must be implemented in a controlled manner. Furthermore, the measurement of NHS engagement is currently subjective or inappropriate.
A tough call
Before we address the challenges facing pharma directors with responsibility for resource allocation between sales and NHS development, it's worth taking a quick look at the history of relations between pharma companies and the NHS, and specifically the types of sales professional that have been employed by pharma companies.
It should be noted, for instance, that the increasingly complex sales picture outlined above belies the fact that for the past few years, recruitment to the sales and marketing teams of pharmaceutical companies has been on the up. According to the ABPI, there are 10,000 sales reps working in Britain today compared with 8,000 five years ago.
Despite or, perhaps, because of this growth, selling pharmaceuticals has always been one of the toughest sales jobs around. The healthcare industry is a highly regulated sales environment, and the primary buyers of the traditional sales reps' products – GPs and hospital doctors – are one of the most well-informed and difficult groups of consumers to influence. They have little time – both literally and figuratively – for pharma reps, and even when the sales rep has negotiated an appointment, their next task is to successfully convince a busy GP to change entrenched prescribing habits.
Changing relationships
Prescribing is also now a more complex field. Decisions about which drugs to prescribe are increasingly being guided by the structural make-up of the local NHS. GPs are coming under increasing influence from primary care trusts and other formal and informal networks which are springing up around particular disease areas. The response of the pharma industry has been to introduce healthcare development managers whose role is to work alongside the more traditional rep.
These key account managers aim to build different relationships from their sales rep counterparts. Pharmaceutical companies recognise the opportunities for product promotion through direct access to staff, and are seeking to promote further developments in training and influencing prescribers – in particular, the new prescribers i.e. nurses and pharmacists.
As such, healthcare development managers are required to build multiple relationships inside and outside the medical profession, with pharmacists, committees at hospitals and PCO management boards. They also need different skills, such as expertise in pharmacoeconomics in other words, presenting the economic arguments for why their drug will save the health service money in the long term.
The reality of marketing and selling pharmaceutical drugs is that the majority of sales resource is devoted to the promotion of established products. This is the area where we should expect the greatest degree of change in the future. The NHS has become a less friendly customer in recent years, with local PCOs making more decisions about which class of drug should be used to treat particular illnesses.
Viewing sales from a whole new angle
Product effectiveness, price and added-value services will all play a part and it is immediately clear that this kind of marketing will need different sales skills from those needed to speak to individual GPs. Influencing skills have to be augmented by much improved objective technical knowledge, and additionally, liaison teams must be ready to perform more marketing and support services and be able to think in terms of the present and potential future needs of the PCO.
Healthcare development managers need to think of themselves as solution providers rather than drug-sellers in other words, they need to be able to offer a range of value-added services. However, this is easily said, but difficult to achieve in practice.
The pharmaceutical industry needs to do much more to engage with the NHS, but has not often been terribly good at delivering the right sort of behaviours to do that. The teams of NHS development or liaison managers, who are usually tasked with driving the company's NHS relations forward, do have a sales agenda, but often find it difficult to translate that agenda into the right kinds of behaviour. That makes sense when you look at the type of pharma professional who is likely to become a liaison or development manager. These are, more often than not, ex-sales reps – highly experienced people, but also people who are more used to dealing with doctors and nurses than planners and commissioners.
How to measure success
Similarly, for the pharmaceutical company itself, delivering and measuring success through the deployment of NHS development teams is more complicated than managing teams of sales reps. Selling to GPs may be difficult due to the nature of the target audience, but with a single prescriber, success is relatively straightforward to measure, and, as such, it is much easier to analyse which areas of the business are performing and which are not. It's much harder to allocate resource and measure effectiveness of sales and marketing efforts when NHS development teams are focusing on building fruitful, long-term relationships, rather than just trying to hit sales targets.
Furthermore, the ethos of the new prescribers muddies the waters significantly for NHS development teams. Decision-making processes are more complex, and the range of influencers is much wider. So how do you measure success? It's not a question of just hitting objectives – even setting the right objectives is a significant challenge in itself.
Pharmaceutical companies that want to employ effective liaison teams need to spend a great deal of time and effort defining what those teams should do and how they should do it. A business development plan needs to have a very tight focus on reporting if it is to give the team any chance of delivering against measurable objectives.
Setting objectives, and tracking performance against objectives, is crucial to the success of the healthcare team's efforts, but it seems that in many pharmaceutical companies, NHS development managers do not always have the support they need to do the job they're trying to do. Recruiters to these types of roles are often not explicit enough about the nature of the job and what it involves.
Delivering at healthcare team level depends on operating effectively in a business-to-business environment, rather than the more traditional and familiar business-to-consumer environment of selling to a single GP at a time that sales reps are accustomed to. NHS development managers also now have to cope with the challenging task of selling to numerous local customers. There will be an increasing opportunity for them to bring offerings to customers that build upon their own expertise of business and business models – information handling, supply chain management, performance management and so on – the NHS is going to be hungry for those techniques which it has (often) previously ignored.
Awakening ambition
Never has it been clearer that pharma companies need to devote more of their sales budget on engaging with the local organisations and networks that make up the local health economy of the individual GP. The healthcare development team, recruited and managed effectively, will provide the platform to sales success in the NHS of 2007 and beyond.
If your aim is to develop your pharma salesforce to meet these new challenges, you need to win their hearts and minds. If you don't, they won't change their behaviour, they won't buy into the development programme and just days after the training platform you have chosen to roll out has ended, they'll revert to their previous behaviour.
Effective sales training works on the principle that you cannot create changes in performance by simply changing the process – you have to change the team's behaviour.
To motivate the salesforce, pharma providers should employ objective assessment to awaken personal ambition. Statistical analysis can show where salespeople are weak, what areas need to be improved and what the steps are that need to be taken to ensure that each salesperson, sales team and business unit meets or exceeds the targets set for them.
Indeed, there is a direct correlation between the development of sales skills and increased revenues and commission. Training teams should also work with the sales manager, showing him or her what the sales team is capable of and supplying objective, concrete evidence that can be used to challenge the salesforce to improve its performance.
Case study
Genus Pharmaceuticals is a small, Newbury-based company with more than 35 products across its branded and generic range.
It was acquired for €17 million in 2003 by German-based, pan-European firm STADA, a deal that brought access to its new parent company's product portfolio.
Genus also has plans to expand its business through in-licensing and corporate acquisition activity.
The problem
Genus' sales team and its processes had not been evaluated for nearly two years and the company's management was concerned that best practice was not being observed – each opportunity to sell to customers was not being maximised and there was a need to develop better sales strategies to help sales staff to get more involved in how they were doing their jobs.
Furthermore, although the sales department was holding regular meetings with clients, it was not routinely hitting sales targets. It appeared that both communication and the sales team's negotiation skills could generally be improved, and there were some bad habits that needed to be broken. In addition, the sales teams creative side was in need of some invigoration.
The management team brought in Silent Edge, the sales performance company, to assess the situation and give an insight into how the sales team was functioning and identify areas where improvements should be made.
The solution
Silent Edge started by putting each member of the sales team through its objective benchmarking process to identify areas for improvement. It found that some Genus sales staff were missing elements of pre-call preparations, while others were habitually failing to mention the full range of relevant products offered by Genus. Presentation deficiencies were also identified, both in terms of the personal appearance of some individuals and the company's overall sales value proposition.
But the key failure of the Genus salesforce was the loss of rapport-building skills, largely through complacency and customer familiarity.
Russell Ward, chief executive officer at Silent Edge, said: "We were able to focus heavily on each individual to analyse their sales techniques and methods in great detail.
"These would be very difficult to spot without an expert eye, because salespeople are constantly under pressure to deliver and, therefore, find it tough to take a closer look at what they might be doing wrong."
Once Silent Edge had completed its assessment of staff and identified the key areas crucial for the development of Genus sales department, a training programme tailored to the needs of the team and individual members of the team was implemented.
The results
Since its work with Silent Edge, staff motivation and the level of commitment from the sales team at Genus has increased to the point where sales targets are now being met consistently, whereas previously this was erratic.
Real evidence of improved sales performance has also been observed through Genus' sales team achieving a new record for sales over a quarter.
Improved internal and external communications – both areas which Silent Edge highlighted as cause for concern – have made the company's overall sales value proposition much more coherent across the sales department.
Peter Ballard, the managing director of Genus, said: "We can now realistically hope to at least double over the next three years. There is a real feeling that we have the tools in place to anticipate such growth – we have transformed what was a good sales team into a brilliant one."
Lorna Dakers is director of Silent Edge, the sales performance specialists. For more information, call 01892 890111 or visit www.silentedge.co.uk
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