Making Sense of Sales - Pharmaceutical Executive


Making Sense of Sales
How do you rationalize a sales force without sacrificing sales effectiveness? Try these strategies

Pharmaceutical Executive

Many pharmaceutical companies would do well to transition from the idea that "everyone gets a rep" in these situations to a more flexible hybrid sales model that could improve operational efficiency. This approach can often cut costs by 5 to 10 percent.

Other industries have been very successful in using telesales groups to supplement the activities of their field-based sales organizations. Under this hybrid sales model, a field-based salesperson and a telesales rep covering the same geography can coordinate their activities to serve more customers at a lower cost. Someone based in headquarters and working via phone and the Internet, for example, can provide adequate support to meet the needs of a low-value customer or one who is rejecting visits from salespeople, but still welcomes medical information and samples. If a customer's needs or preferences change, and they merit a direct sales call, the field-based representative can easily transition into the lead role.

Though telesales are generally less effective than face-to-face sales visits, it's easy to overestimate the difference between the two approaches. For instance, there have been cases where a telesales team was only 25 percent less effective than their counterparts in direct sales.

A wholesale shift away from direct sales for a majority of customers is unwarranted in the pharmaceutical industry. But companies with an eye toward the future are now making the effort to understand their low-value and "no see" customers, identifying alternative sales models that can potentially serve these groups well, and then carefully testing them to determine the best hybrid approach for their business. To fully implement a hybrid model can be a daunting task. But given the potential boost in profitability it could bring, we believe it is a wise investment for many companies facing substantial pressure from investors to increase profits and earnings.

Expand Account-Based B2B Selling

As more physicians join group practices, sales models in which pharmaceutical salespeople sell principally to individual doctors become less practical. Sales territory design and management projects suggest that a B2B-style sales model that targets decision makers on the account level can maximize sales force effectiveness, and in some cases cut sales-related costs by as much as 20 percent.

Individual physicians are increasingly subject to policies put in place by their employers and the institutions they are affiliated with (such as hospitals and integrated health systems), not to mention the constraints being imposed on them by managed care organizations. Since the majority of reps have little or no access to the decision makers in hospitals or managed care organizations, they spend most of their time with physicians and staff who have limited decision-making power. In these cases, companies would profit by shifting to a B2B sales model that segments customers at the account level, and matches the sales approach to the account's strategic importance and buying preferences.

Expanding the use of this account-based B2B-type sales model often requires changes in sales force structure, wholesale change to the selling process, new training, new tools, and a new support system for salespeople that does not exist today. For salespeople, it requires a significant behavioral shift, a new way of thinking about how and what to sell, new sales performance data and reports to use in the field, and interaction with business stakeholders they may not have had contact with previously. It's not an easy transition, and the learning curve is steep. Yet, our experience suggests that an account-based B2B sales approach will be more effective than the traditional pharma sales model for an increasing number of customers.

Time to Adapt

The world of pharmaceutical sales is in flux. The slowing economy and rising cost of travel are pushing American consumers and companies to reevaluate the way they conduct business—and pharma should be no different. The escalating cost of a direct sales force should act as an impetus for pharmaceutical companies to take a long-term view of their selling practices, address inefficiencies, and add new capabilities. Organizations that equip their sales teams with more products, customize from territory to territory, explore and adopt hybrid sales models, and expand use of account-based selling where appropriate will be better positioned for success and on a path to a brighter—and more profitable—future.

Kelly Tousi is a principal with ZS Associates. She can be reached at

Angela Bakker Lee is a principal with ZS Associates. She can be reached at


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