If generics competition, skimpy pipelines, and increased price pressure from managed care haven't done the job, maybe four-dollar-a-gallon
gas, the credit crunch, and a sagging global economy will convince you: You need to save money on your sales force.
Face it, the direct sales force is one of the largest costs for most pharma companies, and many companies react to any financial
shortfall with a temporary reduction in sales force head count. But in the long run, companies don't need a quick fix. They
need to find ways to create built-in efficiencies that will lead to sustainable increases in profitability. To do that, they
need to address both sales force size and the underlying benefits and risks of their sales model. And that means they need
to challenge the conventional wisdom about pharmaceutical sales, considering alternative selling strategies that align with
the needs and preferences of their most important customers.
Angela Bakker Lee
Here are three strategies that deserve consideration.
Put More Products in the Bag
Pharmaceutical companies have long operated under the assumption that pharmaceutical salespeople cannot maintain the high
level of expertise required to detail physicians effectively on more than two or three products. But are we selling reps short?
Pharma's habit in this area runs counter to sales practices in industries such as high tech, industrial manufacturing, and
medical products, where salespeople of similar tenure successfully sell a wide range of specialized products and services
to equally demanding customers.
When companies limit the number of products a single salesperson carries, they hinder the rep's ability to adapt to local
conditions and offer a product mix that best suits the needs of individual physicians and their patients. It also adds unnecessary
costs to the system. Many companies could rationalize sales forces and reduce their costs by as much as 10 to 15 percent—without
sacrificing sales force effectiveness—by thoughtfully increasing the number of products that salespeople carry. This sort
of change has other benefits as well: It allows greater variability in the product mix from territory to territory and rep
to rep, permitting companies to customize sales force resource levels. It also has the potential to reduce demands on physicians'
time, easing the irritation of customers who feel they're called on by too many different salespeople from the same company.
Companies with broad product portfolios may need to take an incremental approach to training their salespeople on more products,
and making the needed operational changes. For others, it could be a speedy, relatively seamless transition—especially for
veteran reps. One salesperson we spoke to has sold almost every product in the portfolio over the last two years as a result
of sales force restructuring and alignment changes. If his company were to make this change, salespeople like him would simply
have to brush up on a handful of products before they hit the street.
For the sales operations team, adopting this new "highly differentiated" approach to sales force resourcing has many implications
for downstream systems and processes that need careful consideration. Some sales operations teams have the tools and resources
to take it in stride, but others will need to shore up their capabilities in order to cope with the new demands presented
by this model.
In many cases, supporting this kind of change could also require more sophisticated decision-support systems, new business
processes, and the development of tailored incentive compensation plans. While management may be concerned that this transformation
adds an unnecessary layer of complexity to sales planning and operations, the potential benefits in terms of greater efficiency
and cost savings clearly outweigh the risks.
Explore Hybrid Sales Models
Every pharmaceutical company's customer database includes both low-value doctors and "no see" doctors who won't see reps at
all. Companies often include these physicians in their direct sales force assignments, planning (and hoping) for a time when
the preferences of these customers might change, or when a salesperson might break through and achieve a relationship with
them. Yet deploying an expensive door-to-door salesperson to service customers who would either prefer, or do just as well
with, a low-cost transactional sales approach is remarkably inefficient.