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.