PowerPoint Presentation

Best Practices, LLC Strategic Benchmarking Research Pharmaceutical Sales Training Excellence: Tools, Processes & Resources That Drive Effectiveness

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Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3Research OverviewParticipating CompaniesHallmarks of ExcellenceKey Metrics at a GlanceKey Trends at a GlanceBenchmark Findings Sales Training Program Operations & Models . . . . . . Page 12Sales Training Content Delivery & Development . . . . Page 26Technology Issues & Applications . . . . . . . . . . . . . . . Page 41Sales Training Budget & Resources . . . . . . . . . . . . . . Page 52 Organizational Structure & Scope . . . . . . . . . . . . . . . . Page 69 Trends in Pharmaceutical Sales Training . . . . . . . . . . .Page 76 Best Practices of the Benchmark Class . . . . . . . . . . . Page 81 Appendix: Participant Demographics . . . . . . . . . . . . . . Page 90 2Copyright Best Practices, LLC

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Topics IncludedStudy Overview

Sales Training budget trends & managementMost utilized types of Sales Training included in formal curriculumCollaboration level of sales training with various stakeholder groups % Training content developed and delivered by internal staff vs. vendorsTechnologies used to deliver training% training outsourced to vendorsKey Industry Metrics: Avg. # days of sales training per repSales Training budget as a percentage of revenue.# employees receiving sales training per trainer

Research Objective: This benchmarking study was designed to provide pharmaceutical leaders with metrics and insights they can use to evaluate and compare the performance of their Sales Training organizations.

The study identifies successful training venues, technologies, organizational structures, delivery approaches, performance measurement processes, and resource levels that drive effectiveness in high-performing Sales Training organizations.

Methodology: Best Practices, LLC engaged 28 biopharmaceutical training leaders through a benchmarking survey instrument. Research analysts also conducted six deep-dive executive interviews with selected benchmark participants.Research Project Objectives, Methodology & ResultsBest Practices, LLC conducted this benchmarking to identify performance benchmarks for the size, cost, scope, content, delivery channels, lessons learned, and success drivers of leading Sales Training organizations across the pharmaceutical industry. 3Copyright Best Practices, LLC

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25 Companies Participated in This Benchmarking StudyParticipating Companies: Benchmark Class

Twenty-eight Sales Training leaders from 25 pharmaceutical companies participated in this study. Sixty-three percent of the participants are directors or senior directors. Logos represent the company affiliation of the participants

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Benchmark Participants: Train sales forces representing an average of $5 billion annual revenue

Train on four continents, with 74% training sales forces in the U.S.

Provide training covering more than 20 different therapeutic areas

100% have a focus on training specialty sales forces, especially in oncology, hematology, immunology & neurology

48% also train primary care sales forces; 67% train sales managers

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Benchmark Findings: Structure & Resources / Budget The following key findings and insights emerged from this study.Training Heads Report up to Vice Presidents: More than two-thirds of Sales Training departments are led by directors and senior directors. Nearly three-quarters of the department leaders report up to vice presidents and senior vice presidents.

Companies Put Sales Training Close to Marketing: About two-thirds of participants locate their Sales Training groups in close proximity to Marketing Departments. Only 32% are not within the same building.

Sales Training Budgets for Participants Average Nearly $6M: Participants Sales Training budgets averaged $5.87million (US) during the last fiscal year, with a median of $3.35 million. On average, companies in the study allocated 26% for ad hoc training, including POA meetings. 36% of Budget Goes to New Hires: Benchmark participants spent an average of 36% of their budgets for new hire training in the most recently completed fiscal year. On average, new hires receive about 32 days of training during their first year on the job, compared with about 10 days of training per year for existing, or experienced, reps. More Companies Expecting Budget Decreases than Increases: A third of participants expect their Sales Training budgets to remain flat over the next two years, while another 40% anticipate decreases. Increased budgets are expected by 28% of the benchmark class. This trend reflects current market realities: as blockbusters lose patent coverage, many companies are reducing sales force size. Companies with growing budgets are scheduling new product launches.5Copyright Best Practices, LLC

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6Copyright Best Practices, LLCKey Trends at a GlanceTECHNOLOGY:Reducing travel costs, increasing field time, & learner preferences are driving companies to move some live training into virtual classrooms. However, face-to-face learning continues to be important.

Technology creates opportunities to further individualize or segment training so new hires &transfers are treated differently, as are primary care & specialty reps.

Mobile applications & gaming are gaining usage, but effectiveness has not yet been determined.

IT support relationships vary widely across companies.

PEOPLE DEVELOPMENT:As sales forces shrink, emphasis shifts from new hire learning to advanced training & development.

24-hour access to on-demand training modules through LMS or other systems is expected.

Traditional foundation training content remains in place, but curricula are expanding to include business acumen, health outcomes & more.

Companies are increasingly focused on reinforcement & are equipping DMs with coaching skills & support tools that make training sustainable.

COST:Theres a strong correlation between training cost & program size. Those training more reps realize significant economies of scale.

Participants stretch budgets with technology & innovation.

The following are key trends observed in this study.

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Measurement is an area for improvement for us. We continue to look at ways to measure effectiveness. We get good feedback that they were great programs, but I dont know if that necessarily is translated to effectiveness yet. -- Associate Director

Q. Which of the following statements are true of the Sales Training program you represent?7Copyright Best Practices, LLCProgram Attributes(n=27)% Responses

Key Program Strengths Are Collaboration, Dedicated Resources & Management Support Nearly all participating Sales Training Departments have dedicated resources, good relationships with sales leadership and active support from senior management. Career path development and use of effectiveness metrics are opportunities for many departments.

Opportunity AreasStrengths

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Model: Sales Training Model Integrates Competencies & CurriculumAs important as it is to create competency models based on roles, its equally important to ensure that the models and competencies are aligned with the corporate culture and values. This is not an overnight processit takes two to three years. --Interviewed Associate Director, Sales Training & DevelopmentAlign Program with Corporate Objectives & ValuesEstablish Competencies Based on Organizations Needs Create a Competency Model for Each Role Identify Individual Skills GapsCreate Individual Development PlansDocument Training & Coaching Consistently to Ensure SustainabilityTrain Managers to Identify Needs Build Curriculum to Develop Each CompetencyMap Curriculum to CompetenciesCoach to CurriculumTrain Managers & Individuals to UseCompetency Map & LibraryCreate Library of Competency-Based Training ModulesOne interviewed partner described a successful Sales Training model based on identifying Sales competencies and building a curriculum to develop them. 8Copyright Best Practices, LLC

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Trainee Satisfaction Is Top Metric for Judging Program QualityMost participants use a variety of metrics to evaluate the quality of their Sales Training functions. Those with the highest effectiveness rating are trainee satisfaction, role-play certification, and formal feedback from management.

Q. Rate each of the following metrics for evaluating thequalityof the Sales Training function? (choose one for each)9Copyright Best Practices, LLCSales Training Program Qualityn =

25

25

25

24

25

25

25

25

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% Responses

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Companies Adding Training Content on Customers & PatientsThe need for content in disease state, compliance, product, selling and other traditional training remains strong, but some new areas are growing in importance. Understanding customers and patients are key growth areas. 10Copyright Best Practices, LLC

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Q. Approximately what percentage of your sales training is delivered using each of the following approaches?(Estimate a percentage for each approach. Total should equal 100%.)11Copyright Best Practices, LLCTraining Delivery Approaches(n=24)For one franchise, we developed a virtual core class with a mixture of iPad content, WebEx, video, and interactivity on the iPad.

It involves pulling out components where we know we dont really need a live person.

- Interviewed Associate DirectorIn-Person Classroom Instruction Is Top Delivery Approach Traditional instructor-led classroom learning accounts for 53% of the sales training provided by the benchmark participants. Interest is growing in instructor-led virtual classrooms, however, with 12% of training offered in that venue. For self-paced training, e-modules are used more than twice as often as paper-based modules.

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Q. Approximately what percentage of yourcore training is delivered via the iPad and/or other similar mobile devices? Q. What apps have you developed?12Copyright Best Practices, LLCMobile Training (n=25)Custom app where all training content is loaded 24/7

Custom play books for each product, eLearning Systems housed on iBooks and product specific apps

Deploying a new CRM APP.Google Drive proprietary product called DOCs (Demonstration of Comprehension)

Handbook app

Training platform launches brand specific new hire training

Utilized for "just in time" training. All learning is no more then 5 -7 mins long. Allows rep to look up info when needed before going into a HCPs office. All content is housed on the iPad; web connection not neededPercentage of Core Training Delivered to Trainees Through Mobile DevicesMax75%75th Percentile25%Mean18%Median10%25th Percentile5%Min0%

Training Apps 18% of Core Training Is Delivered via iPad-Type DevicesCompanies are increasingly moving Sales Training content to mobile devices. Only about 18% of core training has migrated on average to date, however. Participants are actively creating apps for training purposes. The iPad is great for getting things out where speed is of the essence, but we cant just put everything out there in real time. In our world of compliance and the regulatory environment, the company has to manage what a rep can download, copy, and replicate. Interviewed Senior Director

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Technology Comparison: Best Uses DescribedInterviewed training leaders described best uses, pros and cons for various types of training technology.Tech TypeBest UseProsConsE-learning ModulesHome study, Preppingreps before face-to-face training eventsEasy to track use through LCM, Available anytimeNot available in field, No peer interaction, No manager feedbackWebinarsDisseminating information to a groupAccessible in field; Can be archived for flexible access Little opportunity for trainee interactionConference CallsGroup discussion, Manager feedback, Info dissemination Can use for individual coaching or group practice sessionsSynchronous communication onlyiPad ModulesOn the job learningAvailable in field; Interactivity potential;User demandTech requirements; Content development cost; Unknown effectivenessVideo UploadsCapturing rep practice sessionsEnable student coaching outside classroomLMS limitationsVirtual Classroom Providing classroom-type instruction over Internet Reduce travel; Some student/teacher interactivity; Archivable Tech requirements; Cost, Unknown effectiveness

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* Other: Hire highly qualified training managers, develop content in-house, RFP all projects, scale back on meals and gifts, reduce travel cost, repurpose existing content Q. What successful or innovative practices have you used to stretch the Sales Training budget in times of flat or reduced corporate funding? (please describe)14Copyright Best Practices, LLCBudget Management(n=28)Participants Stretch Budgets with Technology & InnovationBenchmark partners have successfully used technology, e-learning, increased internal expertise ,and decentralized trainings to hold down costs in times of flat or reduced budgets.

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Q. Please provide the following numbers fornumber of training days required per rep for a new product launch.15Copyright Best Practices, LLCNumber of Training Days Required per Rep for a New Product Launch (n=18)New Hires (Reps within first year on job)Existing Reps (Excludes new hires)75th Percentile23.7520Mean16.514.4Median10925th Percentile65

(n=17)Reps Get About Three Weeks of Training for a New ProductNew product training requires an average of 16.5 days of training for new hires and 14.4 for experienced reps. One quarter of participating companies provides four weeks or more of new product training. The survey maximum was 45 days, both for new and experienced reps.

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16Copyright Best Practices, LLCTraining Focuses on Needs of Learners & Internal Partners

Its important to remember those people are our customers and the stuff that we are putting forth is designed to help them achieve their strategies. So if we understand that and give people the skillsets and the development they need to better achieve a strategy, then thats how were bringing value. So we need to be aligned with our business partners to that to make that happen.

For our big products, we have somebody within our training group dedicated to working with each of those plans to make sure that everything we train new folks on is done from a customer lens. Were involved from the very beginning. Interviewed training directors shared best practices on partnering with internal stakeholders and collecting feedback from trainees to ensure training is focused on meeting internal customers needs.

Were big fans of doing everything we can to improve learner satisfaction where we basically ask them at the end of the training, If you didnt have this training, could you be as successful in your job? So learner satisfaction is a big driver for just about everything we do, and we get tons of feedback from our learners. that we scan through after every class we run. Then we use it to try and make improvements.

Were trying to get to this culture of continuous improvement where everything we do we take time to analyze the feedback from our learners, figure out, or evaluate where it falls and what we can do to improve upon it for the next folks that come through.

Best Practice:

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Best Practices, LLC6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517www.best-in-class.com

Sue SilversteinMartha HaswellSenior Director, Advisory Services Project Manager919.767.9227 919.767.9249ssilverstein@best-in-class.com mhaswell@best-in-class.com

About Best Practices, LLCBest Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics, and winning strategies of world-class companies. 17Copyright Best Practices, LLCLink for Report: Pharmaceutical Sales Training Excellence Benchmarking Report

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