Sales Management: Sales Growth, For What?

It's what reps say-not how many say it-that makes a difference.
Sep 01, 2004

Jim Callandrillo
In the past few years, companies have presented arguments for both the escalation and de-escalation of sales forces. Some say big sales forces drive sales; others claim fewer reps effectively targeted can yield strong results for lower cost.

This article examines what pharmaceutical companies have achieved with big sales forces. However, by looking at detailing trends and comparing promotional expenditures with corresponding prescription writing volume, it puts those points in perspective and reveals some interesting results.

The information about detailing and sales force effectiveness comes from the industry's largest and longest-running primary research databases, composed of more than 500 studies with more than 100,000 individual physician interviews across hundreds of thousands of brand sales calls. The quantitative and qualitative metrics in the database have been administered in a consistent manner, allowing for comparative assessment over time.

The Two-Minute Detail
Relative Growth In the late 1980s and into the early 1990s, the pharma industry's sales force size was on par with current levels when considered relative to script writing volume. In other words, the ratio of sales reps to prescriptions written has actually remained constant.

By the mid-1990s, pharma companies turned their focus to managed care and institutional selling, which they believed would dictate drug policy and prescribing behavior. The belief was that, because there are far fewer institutions than physicians—and each institution covers multiple lives—companies would be able to reduce their sales forces without losing market impact. This initial perception, however, did not hold true in the real world.

Although managed markets created formularies, prescribing policies were relatively lenient, and physicians continued to be the main decision makers. From that base there was explosive growth—34 percent in the past five years and more than 75 percent in the last seven—to reach an unprecedented 94,000 detail reps in 2003.

The need to drive sales, however,is not the only reason companies increased the number of feet on the street. Pharma companies with large, well-trained sales forces are more attractive to the investment community, largely because they have the capacity to launch blockbuster drugs. In addition, Big Pharma is eager to have the sales strength needed to secure co-promotion agreements with potential partners. The typically small companies look for organizations that can bring them the strongest presence out in the field—so sales force size plays a key role in their decision process.

The Rep Is Here to See You
In a less practical way, pride is one of the drivers of sales force growth. It is often the yardstick that companies use to compare themselves with each other—and one of the reasons each has been hesitant to be the first to de-escalate.

Costly Goals Despite the challenges of managing and training a rapidly growing sales force, the industry has been able to achieve several end points.

Steady detail length. The industry worries incessantly that detail times have fallen to less than two minutes. That may be true for lesser brands, but our research shows that the average length of a detail has not undergone a statistically significant change during the past five years for major brands. Although detail length ranged from just below eight minutes to almost 12 minutes for the 20 quarters analyzed, the overall trend is statistically flat, with an average time of just over nine minutes.

It's important to remember that the research was typically performed for major brands. The often cited "two-minute detail" may be true for products outside first or second position, but reps detailing major brands are still getting virtually the same face time with physicians that they did five years ago.

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