Sales Force Shuffle in Full Effect
The last week the pharma atmosphere was abuzz with news about sales force cuts, outsourcing, and overhauls. First, Schering-Plough announced that it had eliminated the 1,000 sales positions it said it would trim in April. This is being done as part of a new sales model called—internally—a productivity transformation program (PTP). The new model, to go into effect next month, will streamline the sales force to take a more customer-centric approach, including targeted and relevant physician calls and a relationship management–oriented business model.
“The company emphasized that it values the work of its sales professionals, and so the decision to eliminate positions was difficult, and is being implemented with great care and empathy,” the company said in a release. “When the goals of PTP are realized, the company is confident that Schering-Plough will be better positioned to be a stronger and more competitive company for the long term.”
While Schering’s might have been a little guarded about its sales force moves at press time, Merck was open about its plan to outsource sales positions to bolster “critical short-term vacancies.” The company told Dow Jones Newswires on Friday that it had signed a deal with sales force contractor inVentiv Health to provide sales support for the company. While the savings from using contracted reps varies depending on the use or the size of the company, the average cost reduction is15 to 20 percent.
Pharm Exec spoke to Terry Herring, president of inVentiv Health on Tuesday to find out more about the benefits of using a contracted team of salespeople. According to Herring, in the early days the outsourced representatives were mostly supplemental, but that role evolved to a complex system of jobs that must be filled including long-term positions, rent-to-own reps, customer service and support representatives for sampling and messaging, and nurse educators as educational marketers.
“We are seeing a variety of teams working together on a project, so you might have a customer service rep that samples, some reps that are more driven around a business needs, and then there are nurse educators,” Herring said. “There are different levels, rather than everyone doing the same thing.”
InVentiv recruits sales reps out of the same pool as pharma, and looks for a mix of individuals with a range of experience levels. One would think that the pool is getting bigger with the recent deluge of laid of sales reps. However, it’s challenging to hire laid-off reps.
“The challenge—not to be controversial, but to be realistic—is that a lot of good representatives have been laid off, but so have a lot of underperformers,” Herring said. “In the recruiting process, we have to use greater rigor when looking for experience. We want to get the true performers.
“It’s also harder because the industry does not seem bulletproof anymore. Before, you could have the pick of any rep that had skills; now the company has to sell itself a little more than they did in the past.”
InVentiv said that it places about 80 percent of the representatives that come off of a sales team with some other opportunity. “The idea is that if you have people that perform, but a company’s pipeline shifts and they don’t need them, they can be moved to another company,” Herring said. “If managed well, this could be a good model.”
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