Cream of the Corp. Louise Anderson is president/CEO of Anderson Performance Improvement.

With the massive 2004 Incentives Show just recently behind us, it's hard not to compare pharma's motivational tactics with those used by other industries.

In some respects, pharma companies are getting better at incentives. After some experimentation, DTC marketers are generating returns on their couponing and other rebating initiatives. Professional marketers, with guidance from the PhRMA Code, have completely revamped their thinking on freebies and now offer merchandise that help physicians administer patient care.

But that begs the question: In what ways have sales managers changed how they reward and recognize reps?

Louise Anderson, president and CEO of Anderson Performance Improvement, a sales effectiveness consultancy, says the industry routinely uses noncash merchandise incentives during routine selling—but there is room for improvement. Specifically, Anderson cautions the industry to rethink how it deploys rep incentive programs during a merger and acquisition and who those programs should reward.

Three Steps to Better Performance

Pharm Exec: What happens to the sales force during a merger? Anderson: Even if management of the organization clearly says they won't touch the sales side of the business, nobody believes it. Look at publicly held companies before and after they merge or are acquired—reps' performance usually deteriorates measurably. Add to that the fact that new sales strategies for products often stand still, and companies find that the inertia caused by the transition can be financially devastating.

At what point is a merger most damaging to the sales force? Often times the rumor mill is more damaging than the actual merger. That's because most sales reps in the field don't feel the effects of the merger unless the company changes its systems at the same time.

What can companies do to increase the effectiveness of their reps during times of transition? Organizations should communicate to the sales force about the positives and strength of joining two companies together. They should stay customer focused by specifically talking to physicians about the benefit of merging.

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How long should companies run reward and recognition programs?When they look at merger and acquisition strategies, companies want to deploy incentive programs before the merger scare hits the field. Typically, companies should start the program 30 days before the merger officially takes place, run it through the heavy merger activity that usually lasts about 90 days, and then for the 30 days following.

How are pharma's incentive programs different from other industries? The pharma industry is one of the last to still reward, compensate, and give incentives for end result. It defines top performers based on prescriptions written by doctors in their territory. Companies put all of their levers, recognition, incentive, compensation, and bonuses on the end result—the autopsy. But that list is a lagging indicator.

What do you advise to increase sales reps' performance? Companies should define top performers, not as the reps whose doctors prescribe the greatest market share, but reps that are increasing their brand's market share the most. Sales managers should go back and look at reps that were in those markets when the greatest increase in prescription writing for a particular brand took place to understand which reps obtain the greatest level of adoption. That's particularly helpful for brands like Viagra (sildenafil), where the whole marketplace took off.

Sales managers should capture those reps' best practices because those are the behaviors that they want their other reps to copy. Then, sales managers should conduct the observations and reward others for doing it like them. By focusing more on behaviors, they can have a significant impact.

What industry can pharma look to for best practices for incentive programs? From a merger-acquisition standpoint, banking has had the most severe financial impact—and consequently, it now has one of the best incentive programs. Six years ago, when a bank merger took place, 14 percent of the customers would leave. So that industry had to make sure that it was engaged with customers and that every employee was customer focused.