By Eric Janvier and Wendy van der Lubbe
Communicating directly with customers may be simultaneously the most
important and challenging task for pharma. For the ‘traditional’ sales force,
having a conversation that is of genuine mutual interest and benefit to both
parties is beset with difficulties, simply because of the fundamentally
transactional nature of their meetings. After all, a sales force is there first
and foremost to sell.
In recent years pharma companies have acknowledged a growing need to engage
their customers in new and more meaningful ways, not always necessarily linked
to the direct benefits of their products.
They have also realised that new
customer structures have emerged, forming intricate networks of care. Many
companies are trying to change or adapt their approach to customer relations to
reflect this, moving the focus away from the traditional sales force approach
to a more ‘customer-centric’ one.
In many cases, the sales forces are composed of valuable individuals
possessing good technical skills as well as a fairly good knowledge of their
customer’s environment. But for years, because of commercial strategies and
more recently evolutions in regulations, their true value has been much
under-utilized.
So how can traditional sales forces be best utilized in a new model of
customer-centric engagement while fulfilling their central objective of selling
products?
Towards a Customer-Centric Approach
In our experience, the customer-centric approach is in many respects working, but there are issues. On the plus side, it has almost certainly opened doors to new customers and allowed pharma companies to establish more meaningful, robust and long-term relationships with key stakeholders. It is difficult to gauge the relevance and benefit of many of these relationships, but it cannot be doubted that the customer-centric approach has afforded previously unattainable access to key influencers and produced a better strength and depth of customer-relationship than ever before.
On the other hand, a customer-centric selling approach is expensive, time
consuming to implement and can be challenging to organize and structure
internally. Additional staff may need to be recruited, and significant training
needs to be completed by new and existing staff to ensure everyone is
up-skilled and on the same page. Internally, most customer-centric approaches
are driven by marketing, leaving little room for the sales teams to act based
on what they see in the field. Meanwhile the needs of customers are numerous
and extremely varied, making provision of services with a genuinely mutual
benefit extremely challenging. One could argue that the customer-centric
approach does not always suit the needs of the company because it is simply too
customer-centric.
We believe there is an effective and more efficient way to embrace
the best elements of the customer-centric approach by maximizing elements of
the traditional sales force model and combining this with optimized service
provision — rather than needing to completely restructure and reorganize the
commercial organization. We also believe this solution has a clearer and more
tangible business benefit for the company.
Matching
Services to Customers
By moving towards a customer-centric approach, pharma has acknowledged a
fundamental change to its mindset, which is that the product alone is no longer
sufficient as a starting point for a conversation with customers. Now it’s
about what else is on the table. How can pharma companies engage in the health
and wellbeing of society beyond provision of pills? How will they help
regulators, payors and healthcare professionals to solve healthcare challenges?
Conversations between pharma companies and their customers go beyond the
product and towards offering of services that surround a product and improve
outcomes. And indeed, the word ‘customer’ could now be interchangeable with
‘partner’.
There are many ways to in which companies can transform ‘dated’ sales forces
into customer-centric style account managers. To make the transition, many have
taken the needs of the customer or partner as a starting point and adapted the
company approach, structure and services to match them. However, evaluation of
the existing company services together with identification of the customers who
would benefit most from each might be an easier starting point.
The findings
point out what to adapt and how to sell as appropriate. In theory this should
be a more attractive option to pharma companies for several reasons. First it
means the company is always offering services that are relevant and beneficial
to both the company and the customer. This may sound obvious, but in a
time of dwindling resource, it is remarkable how much money is being spent by
pharma companies on initiatives that are of absolutely no benefit to them.
Second, linked to the first point, it allows the company to potentially achieve
more with less, increasingly important in the current environment. Third,
this approach causes significantly less organizational disruption, and will
only require some training or recruitment.
Transition to a customer centric approach in sales is not simply a case of
thrusting company services upon customers in a scattergun approach to see who
bites — that’s no different to the ‘traditional’ sales model. This is about
matching company services to individual customers. So how can it be done?
Maximizing Sales Effectiveness
The first step is to set up an operating framework that determines the areas in which the company will function in terms of service offering. This can be achieved through combined analysis of the clinical pathway of the company products and a stakeholder needs assessment analysis. Once that has been completed, it is possible to segment customers based on certain parameters. The result is a list of customer profiles, which allow the company to adapt and match their own services to each profile. This kind of stakeholder profiling, in essence, allows for a tailored customer-centric-style approach but in a simplified, broader-strokes way.
Once you have the profiles, customers can be grouped under each one. It is
then possible to provide the sales force with the tools, language and company
services that are matched to each segment.
In this model, the sales force members are a critical component, but their
role has to evolve slightly so to an extent they do become “relationship
managers” who are not just pushing products. They are able to talk about the
wider service offerings, and identify customer profiles and match resources and
offers accordingly. There is therefore an element of training required to
educate the sales force on the profiles and how to match the services discussed
accordingly, but it is not to the extent of training key account managers. It
is also important that the tools are simple and pragmatic, and can be adapted
to fit individual requirements if possible.
As well as having the significant benefit of utilizing and maximizing an
existing resource in the sales force, this approach has the added benefit of
streamlining marketing and sales teams. Because the company services need
to be matched to specific customer profiles, it ensures Marketing has to
consider the characteristics of the end user. In theory this should make for a
smoother transition between what comes out of Marketing and what the sales team
pitch to customers.
We believe the time is right for many companies to take this kind of
approach. It is feasible now because companies now have the capacity to
create and disseminate services to multiple audiences, helped by cheap and
efficient technology. And while some company services have been there all
along, it is only now that the true value of services is becoming properly
appreciated.
Conclusions
The customer-centric approach has been adopted by many pharma companies for the right reasons, predominantly the need to move away from pure product-selling and towards a more holistic service offering. But when insufficient time is taken for training and change management, a full-scale customer-centric approach can be too customer-centric, with not enough benefit for the company. It can also be incredible draining on time and resources to implement.
Using existing sales forces is probably the
cheapest and most efficient way to create a customer-centric environment. With this new model, the starting point is not the individual customer,
but what will benefit the company as well as the customer, what the company has
to offer in the context of its product pathways. Through stakeholder profiling
and needs assessment, these services are matched to customer needs, creating a
win-win scenario for all concerned. And best of all, it puts the
oft-disregarded sales force right at the center again, representing the company
and taking part in consultations that are of genuine mutual benefit to customer
and company alike.
About the Authors
Eric Janvier
is a partner and Wendy van der Lubbe a senior consultant at Executive
Insight.