What motivates effective pharmaceutical sales reps?

August 1, 2000

Pharmaceutical Representative

Compensation is the top driver of job satisfaction among pharmaceutical sales representatives, according to "Sales Force Productivity & Effectiveness 2000," a study conducted by Newtown, PA-based Scott-Levin. But money isn't everything. An overwhelming majority - 95% of more than 700 reps surveyed - said the quality of their company's products is either very important or extremely important to both their motivation and their ability to succeed in the marketplace.

Compensation is the top driver of job satisfaction among pharmaceutical sales representatives, according to "Sales Force Productivity & Effectiveness 2000," a study conducted by Newtown, PA-based Scott-Levin. But money isn't everything. An overwhelming majority - 95% of more than 700 reps surveyed - said the quality of their company's products is either very important or extremely important to both their motivation and their ability to succeed in the marketplace.

Whether success is defined as "percent of sales quotas achieved" or "dollar amount of bonus/incentive compensation," product quality was rated the most important factor in reps' ability to succeed.

Reps have a high opinion of their company's drugs. Most (74%) say their products are "superior", 21% rate them "above average" and only 5% call them "average."

While financial incentives are important, according to the report, reps derive great satisfaction from the sense that they offer high-caliber drugs - and "enhance human life."

Some other highly rated "tools of the trade" are: timely information about pipeline products, generally good communication with management, physician-level prescribing data and other insights into prescribers and drug samples.

Approximately 62% of respondents said their company's total compensation package has "a lot" of impact on motivation. Thirty percent said compensation has "quite a bit" of impact.

Money talks

Reps' mean base salary is $57,059, a figure that includes answers from respondents who declined to give their precise salary but did supply a range. Average incentive compensation is $19,552, for a mean total compensation of $76,611.

Overall, respondents said base salary represents an average of 75% of their total compensation. The rest comes in the form of incentives such as bonuses and stock options.

However, the study uncovered an important new trend: Newer reps (those with their current company for 10 years or less) report that a higher percentage of their total compensation comes from incentives. These newer reps, therefore, feel more motivated by incentives than by base salary.

According to the study, the opposite is generally true for reps who have been with their current employers for more than a decade. For them, base salary tends to make up a bigger piece of overall compensation. Thus, seasoned reps are more likely than their newer counterparts to say base salary affects their productivity and motivation more than incentives.

According to Scott-Levin, this suggests that companies encourage newer reps to compete for incentives, and more experienced reps are encouraged to focus on matters that go beyond achieving quotas. They have already built relationships with prescribers, which helps to create brand loyalty and may prove useful if there is ever a problem with a product. Thus, more experienced reps are a company's lifeline to core customers.

Compensation has become more important as the number of reps in the field gets larger. The number of full-time reps employed by the top 40 companies has risen 85% since 1995, according to another report by Scott-Levin, "Pharmaceutical Sales Force Structures & Strategies." PR

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