Sales Force Survey: Still Too Much Business as Usual? - Pharmaceutical Executive

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Sales Force Survey: Still Too Much Business as Usual?


Pharmaceutical Executive


Incentive Planning

Within responding companies, most incentive compensation plans across the sales organization continue to be based primarily on prescription volume (55 percent indicating a primary factor), revenue attainment (21 percent), and market share (21 percent, up from 11 percent last year).

The mix of quantitative versus qualitative measures, pegged at about 10 percent to 12 percent versus 88 percent to 90 percent in recent years, dropped to 6 percent versus 94 percent this past year. Although this continued "quantitative focus" may seem to fly in the face of the new needs for the changing commercial organization, we hope that this is just a short-term response to the current pressures from financial constraints, increased regulatory scrutiny, and litigation that are forcing companies to provide clear and defensible business metrics linking payouts and performance.

However, some companies, including GlaxoSmithKline, Merck, and Lilly, have recently gone public with their emphasis on "customer satisfaction" and decreased reliance on sales figures. While customer satisfaction measures technically can still be "quantifiable" measures, their use does speak to a necessary refocusing of the sales effort.

Because of their broader reach and leadership role, account managers (corporate/regional/national) have incentive plans with a stronger qualitative measure mix: 22 percent versus 78 percent.

Certainly the commercial function lives and dies on its sales figures—and quantitative measures are expected to dominate. But it may be wise for companies to invest more on the qualitative side, both in the incentive portion allotted to these measures and their choice of what to emphasize there.

Across all plans, the most common qualitative measures are selling skills/call quality, followed by territory management, personal development, and teamwork. Alarmingly, among the 13 qualitative measure options listed in the study, "customer focus/satisfaction" landed in 11th place—although it did place much higher for certain roles. Specifically, it was the No. 1 qualitative measure for hospital regional managers; however, it was still a much-less-utilized measure for hospital reps. This apparent lack of attention to the customer interaction/relationship seems to belie the avowed prominence of this element in organizations' new selling strategies.

Seventy-one percent of the companies in the study currently base their incentive compensation on individual performance—with region performance (14 percent), pod/mirror performance (13 percent), and district performance (12 percent) being the next-most-cited measures. Despite the volatility in the industry over the past few years, this finding remained substantially—and perhaps regrettably—unchanged.

What the New Year Holds

While the 2012 apocalypse supposedly predicted by the Mayan calendar is certainly unlikely, the major patent cliff plunges this year are a fact. The potentially catastrophic ramifications coming from loss of exclusivity have been discussed endlessly. Of course, spotting a problem is always easier than resolving it. In the commercial organization, what we have yet to find is the game-changer—the player that is reinventing the role of the sales rep and how it will drive value for patients, payers, and healthcare professionals. The good news is that customers still want a high level of service and engagement from pharmaceutical companies. But life sciences commercial organizations have yet to find answers to the vital strategic questions outlined in our study concerning the future roles of the rep, and with and for whom they will be engaging—and toward what purpose. Our data and observations tell us that the jury is still out on these questions. Only companies with the internal fortitude to aggressively address these issues will be able to effectively reconfigure and get ahead of the forces of change—and to build on this awareness by recruiting, training, and rewarding a new generation of selling talent.

Ian Wilcox is Vice President and Global Managing Director, Hay Group Life Sciences Sector. He can be reached at
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Matt Gurin is Vice President, Hay Group Life Sciences Sector. He can be reached at
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Carrie Fisher is Principal, Hay Insight. She can be reached at
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