What's Worrying Sales? - Pharmaceutical Executive


What's Worrying Sales?
Better to ask, What isn't? A new survey of leading executives in commercial operations forecasts 2008 as a year of tough choices and big changes.

Pharmaceutical Executive

At the same time, implementing solutions will take two or three years because of the size and complexity of the sales operation. While the more nimble managed markets and marketing functions can move like speedboats or cabin cruisers), the standard analogy of turning around a battleship applies to changing sales forces, which typically number in the thousands. Sales operations will be under tremendous pressure to provide leadership, innovation, and execution here.

Top-tier executives cited the need for sales reps to increase their analytical/business and technology skills, tailored messaging, and customer-service skills (see "Sales Force Skill Sets"). By contrast, mid-tier reps were rated as just fine in analytical and technology areas but as in need of ramping up their knowledge of managed markets and brands and diseases. Respondents also indicated that raising competencies in these areas generally requires more resources for training than mid-tier companies can provide. Our own benchmark data support that conclusion—the average mid-tier sales training budget is $5.6 million, compared with $34.5 million for top-tier companies.

Looking at the divergence between top- and mid-tier in terms of analytical and technology skills, the benchmark corroborates top-tier's recognition that managed markets require better analytics and that changing sales models may call for higher-level tech skills. Mid-tiers, on the other hand, may simply not have the resources to consider ramping up these areas.

The highest need for increased resources in sales support clustered around analytic functions and skills. This correlates with companies' need to do more with less. Thus, functions that help companies perform deeper, more sophisticated customer analysis, collect more targeted information, and develop innovative compensation plans with existing capabilities have the potential to increase revenues.

In some cases, the functions that operations executives want to hold steady on do not require greater knowledge of pharma. Our off-shoring benchmark showed that routine functions, such as standardized reporting and call planning, were, in fact, the most likely commercial operations to be off-shored. About 60 percent of respondents thought it at least somewhat likely that some sales operations would soon be handled overseas.

Innovation and sales training were far and away most in need of more resources, with CRM (customer relationship management) and compliance operations next. POA (plan of action) management and field communications were marked for maintaining at current levels. Pharma companies continually cited innovation, or "doing things differently," as one of the most critical needs in sales operations. The most common forms of innovation cited by large-cap pharma included a tiered sales force model, digital detailing, and CRM. For mid-tier companies, digital detailing, targeting, and call-planning modifications were important, while specialty pharmas cited sales force services, such as reimbursement specialists, and digital detailing as their innovation priorities.

Yet industry efforts to meet this priority are still in draft form. According to our data, only 40 percent of large pharmas (more than 2,500 sales reps) and 20 percent of midsize (500 to 2,500 reps) and specialty companies have established a stand-alone innovation department.

There was general agreement that no one would reduce their reliance on technology in the sales area. Indeed, 70 percent of companies are moving to new technologies in the field in the coming year. Respondents felt that the near-term impact of such technologies as digital detailing and closed-loop promotion, despite the current hype, would be modest at best. Looking to the future, however, the potential impact is high—and as is always the case with new technologies, they must be driven by larger business goals to succeed.

Given that access to customer data is being increasingly restricted in the current climate, commercial operations executives understand they must develop new approaches. Most respondents were less than confident when asked if today's information sources would be equally available tomorrow. Executives gave availability of prescription data only a 42 out of 100 overall in terms of confidence, while anonymous patient-level data (APLD) fared worse, at just 35. Wholesaler and distributor data each earned a 55 overall.

Companies split 60/40 by size when it came to plans for developing new data sources. Top-tier firms have the resources to develop proprietary information for their own competitive advantage. In fact, two execs reported already having taken steps in this direction. By contrast, mid-tiers lack the resources to create their own sources of information.


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