Sales Force Survey: Still Too Much Business as Usual?

Feb 01, 2012

Despite all the talk of its demise in an era of time-saving technologies, the pharmaceutical sales force remains the first line of offense in the struggle for competitive market share. In fact, strategically savvy deployment of this vital human resource is emerging as a key differentiating factor in how well individual companies fare in a marketplace undergoing dramatic structural change.

As part of our effort to document the transitions, Pharm Exec has once again asked experts at the Hay Group to provide a snapshot of the current "state of the art," drawn from its "2011 Annual Study of Sales Force Effectiveness," as well as the field-based insights the consultancy derives from a long record of engagement in management issues across the life sciences. Hay's data leads to a simple conclusion: While companies are adapting their sales force strategies to account for the transformation of the customer base—with new investments in training leading the way—there is no surefire path to a successful repositioning of this high-cost human asset. But the pace of change is leisurely enough to suggest that companies opting for a truly radical shift in practice will end up changing the competitive game—in their favor.

Hay's study modules covering trends in recruitment, retention, motivation, and compensation in the life sciences industry show an ever-widening gap between Big Pharma and other players—particularly in staffing resource decisions. While smaller, more specialized companies appear to be aggressively hiring, Big Pharma is still fixated on continual cuts and retrenchment, as these organizations seek to find their way in an uncertain world. Read on for Hay's perspective.

The data in Hay's 2011 study suggests that change in the larger and more established life sciences sales organizations can be characterized as more of a "lurch" than a "surge." For instance, training budgets are returning; however, the focus remains on product knowledge, while an expected emphasis in areas like teamwork is not apparent. At the same time, while change is championed publicly, recruiting still focuses almost exclusively on those with industry experience.

As reps' face time with physicians decreases, sales executives continue to struggle with the fundamental question: How can our sales professionals impart value in an environment that is constrained by the power of payers, the apparent extinction of the blockbuster drug as we know it, and the role that generics play in today's market?

Their struggle is complicated by the fact that the new "common wisdom" on change continues to morph—and thus impacts the sales organization in ever more complex and subtle ways. For instance, as reported last month in Pharm Exec's "Industry Forecast" feature, "new therapeutic breakthroughs ... may revitalize the blockbuster, to include biologic drugs intended for targeted patient populations with few treatment alternatives. As a result, 2012 will see more effort to change the incentive package for sales reps, on the premise that 'not all prescriptions are considered equal.' "

With market changes creating so much uncertainty, it is perhaps understandable that many leaders here may be hedging their bets—perhaps relying too much on the familiar versus aggressively pursuing an all-in change strategy.

Response to a Changing Selling Landscape

Acknowledgement of the need to do something, however, is clear. While fewer than 20 percent of participants in Hay's 2010 study indicated that they focused on "differentiating products" and are "concentrating on new customer groups," some 40 percent indicate that these were both prime strategies for them in 2011. "Adopting a customer-centric approach" was up a few percentage points from 2010.

The stronger emphasis on the customer in general and developing new customer groups is an obvious reaction to the changing industry landscape. However, other data presented earlier, along with our own observations, indicate that integral organizational elements (for example, training and performance management programs or hiring priorities) may be lagging and possibly not providing appropriate support to these strategies.

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