Sales Force Effectiveness for Pharma Industry

8/14/2019 Sales Force Effectiveness for Pharma Industry

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MODELLING OF SALES FORCE

EFFECTIVENSS

Any company has many people specialized in their core skills are there, like financial people

for financial decision, HR for staffing & dealing with manpower, a separate department for

accounting, operations & manufacturing to running the operations smoothly. This thing

reminds me a story about the five blind people who came upon an elephant for the first time.

Each used his hands to see the beast, and saw very different things:

The first person touched the leg and thought it was a tree trunk

The second person grabbed the tail and thought it was a rope

The third person felt the ear and thought it was a giant leaf

The fourth person ran into the elephants side and thought they'd touched a wall

The fifth person grabbed the trunk and was convinced he had a snake

Moral of the story is According to their perception they might be right but for excellenceholistic view is necessary.

Everyone contributes in cycle; like financial people invests is different financial projects justby trading between risk & return, accounts people keeps a track of record that from wheremoney comes and where the money goes, Operations people take care of the machine &man to be optimized in such a manner so that cost of the production can be reduced, HR

managers are there to take care of people their needs as well their effectiveness. So everylever just work together so that they can produce a service according to demand of the marketwith minimum cost to the company so that they can not only fight competitively with thesubstitutes available in the market but will also be able to give the maximum profit to theshareholders or stakeholders. So the combined efforts are putted for wealth maximization.Marketing and especially sales force are the actually feeders for the company that not onlysell the product but also bring the prosperous return which are the actual thing stakeholdersare interested in. Sales force is something which is like a mother feeding any child to survivethroughout his life.

The sales forces is something which is to be motivated as well as well equipped with every

tool which is required to do the sales. Their efficiency is something on which companiessuccess depends, it does not mean that other department are not playing critical role but the

whole concept of monetary gains or actual profit or money for any investment comes from the

sweat & intellect of sales force.


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Sales Management Model for any company is something which is very much necessary to be

followed in a good manner.

Selling in pharmaceutical industry is incredibly competitive, in India only there are more than

30,000 Pharma companies are registered. Each year we see sales teams work to get morecalls per day from their representatives, improve customer targeting and message delivery,

implement CRM systems, and develop better programs for boosting the sales by influencing &

creating a long term relationship with doctors.

While all of these tactics have impact whether that impact is positive or negative, there aretwo traits successful SFE:

Cross-functional teams: Utilizing a wide range of team members ensures that a wide range

of experiences and expertise are brought to bear to identify opportunities and develop

creative solutions.

Continuous improvement process: Repeatedly cycling through the three phases of

assessment, implementation and monitoring ensures that SFE improvement is an

evolutionary, or"Kaizen", rather than a revolutionary, or Big Bang Process.

Successful SFE initiatives start by building a cross-functional team with a common, welldefined objective and charter. This team should be responsible for identifying and ranking

Describing the

personal Selling

function

Defining the

strategic

role of theSales

function

Developing

the Sales

force

Directing

the Sales

force

Determining

Sales for

effectiveness&

performance


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improvement opportunities and implementing change. A good cross-functional team wouldinclude sales representatives, sales managers, sales trainers, product marketers, and salesanalysts, with support from finance and human resources. The first objective of this team is tofully assess current sales force processes, strategies, and effectiveness. A three-prongedapproach utilizing field travel, diagnostic sales representative surveys, and data analysis willprovide not only a balanced scorecard, but also insights useful for developing creativesolutions.

Three keys to successfully addressing these SFE opportunities:

Forming effective teams

Identifying the root causes of problems

Developing detailed action plans to implement solutions

TRACK is most important in effecting change with a sales force. These are:

Team, Recognize emotional impact, Accelerate, Communicate and coach, Keep focused

Raising the level of sales force effectiveness requires sustained commitment and effort.Successful sales force effectiveness initiatives ultimately fail because managers dont fullyimplement an effective measurement and monitoring process.

In the pharmaceutical business, the ultimate measure of success is sales. Whether the metric

is growth in total sales, new prescriptions, market share, or product switches, outcomemeasures are the best indication of success. But, just as patient mortality rates tell very littleabout the procedures that are most effective in healing people, sales figures alone dont shedmuch insight on the behaviors and activities that drive sales success. To gain a broaderunderstanding of sales performance, managers must effectively track and manage keybehaviors and activities.

Most pharmaceutical firms already track and manage sales activity. Unfortunately, the mostcommonly used measure sales calls per day is usually inappropriate and can often becounterproductive. By tracking calls per day, management often unintentionally encouragesreps to visit easy-to-see, low-value doctors at the expense of the best target customers who

are often harder to see with the desired frequency.


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A more effective metric is the percentage of target customers seen with the desired frequency(or frequency goal). Figure below highlights several insights from this simple metric:

None of the sales districts in the example is achieving the desired frequency for all targetcustomers

Calls per day performance is roughly equal for all districts, yet frequency attainmenton key customers varies widely

District 3s poor performance on frequency goal attainment and good performance oncalls per day may indicate that the number of target customers exceeds sales capacity,or

reps have substituted their own target list for managements target list

In this example, other factors being roughly equal, we would expect District 1 to significantlyoutperform the others because of its superior frequency attainment on key customers.

Measuring the quality of the customer target list is an effective tool for improving marketcoverage and incremental sales.A simple targeting effectiveness metric that compares asales forces actual market value coverage to the best attainable market coverage given aparticular reach of physicians. In this example, dropping lower-value doctors from thecustomer target list and adding higher potential doctors would significantly improve marketcoverage and incremental sales.We are familiar with the old adage Pereto Principle that 20% of customers account for80% of sales. In reality, pharmaceutical market concentration varies considerably based onthe therapeutic category and type of medical system.Even in the least concentrated markets,calling on the high-value physicians rather than average-value physicians can make asubstantial difference in sales performance.


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Consider two firms launching new products in the same therapeutic class. Each firm calls on1,000 physicians. Firm A selects 1,000 average-value customers. Firm B selects 1,000 high-value customers. In this case, let's assume that both firms have equally effective sales reps,and that both firms receive 15% of the total prescriptions written by the physicians they visit.

Firm A-Average Targeting Firm B- Effective TargetingTotal Number of Prescribing

Physicians

3,000 3,000

Number of PrescribingPhysicians Visited

1,000 1,000

Weekly Rx's Written by Top1,000 Prescribers

25,000 25,000

Weekly Rx's Written byPhysicians Visited

13,000 22,500

Sales: 15% Share ofPhysicians Visited

1,950 3,375

Firm B's sales are 75% higher than Firm A. Although this example sounds extreme, it's notunusual. Sales forces that excel at targeting significantly outperform those that don't.

Basic targeting begins by selecting doctors with the highest therapeutic class sales for the firstline product. Focusing on these high-value physicians often means making tough decisions todrop low-value physicians from the target list even though they:

Are easy to see

Prescribe your products

Are friends with the reps

In most cases, as a firm retargets its customers, it will begin with its current target list(Figure A). It must then identifylower value physicians to removefrom the target list and replacethem with higher value physiciansales organizations mustimplement a disciplined doctorprofiling process in order toestimate each doctor's totaltherapeutic class potential foreach key product. It's important

that the profiling process focus onphysician therapeutic class sales,

not on firm product sales. Profiling doctors based on their usage of your firm's productsoften ignores the biggest opportunities to improve sales.


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Third party sample prescribing data can substantially improvethe profiling process. IMS and Close-Up, for example, collectsample prescribing data in European, Asian and Latin Americanmarkets. These samples typically range from 10% to 50% ofrelevant physician populations and can provide sales managersan important supplement to the profiling process.

Ex. sample data may provide appropriate criteria for populating atarget list. Let's imagine that a sales force has a goal of 30%reach on primary care physicians for an antibiotic. A sample ofphysicians in the market indicates that the top 30% of doctorseach write at least 28 antibiotic prescriptions per week. Then, each rep's target list shouldinclude doctors prescribing at least 28 antibiotics per week and should exclude physicianswriting less than 28 antibiotics per week. Similar criteria can also be derived through adisciplined profiling process, but some firms may view third-party data as more credible andless uncertain than rep-reported profile estimates.

Multiple Criteria Targeting

Once the location of the dartboard is known, firms can fill in concentric circles of declining sizeuntil they've identified the bull's-eye.

Firms with more experienced sales forces can supplement quantitative targeting methods withqualitative profiling. For instance, a firm preparing to launch a new hypertensive (HT) productmight profile doctors on their willingness to prescribe new products.

The targeting process might begin by identifying doctors with the highest HT class potential.Then, the target list is revised. High potential doctors who aren't likely to prescribe newproducts are replaced by moderate potential doctors with a tendency to adopt new products

quickly. This more complex targeting process requires outstanding sales training andcoaching as well as effective coordination between marketing and sales functions.

A more sophisticated targeting process adds additional qualitative targeting considerations.This process is typically used in markets like the US where robust physician-level data isavailable, but it can be successfully implemented in international markets with disciplinedsales forces. Firms may adopt multiple criteria for targeting customers. In the case of our HTproduct, reps might also target physicians who are known to spread their prescriptions acrossmany HT products or to heavily prescribe a distinctly inferior competitive product. Internationalmanagers can utilize sample data to implement this process. Firms using a multiple-criteriatargeting process often limit sales rep influence over the target list. This process requires

excellent communication between sales and marketing as well as a high level of field forceability and discipline.

Measuring message quality is critical to ensuring that reps are appropriately executingproduct positioning strategy. Firms commonly use third party market research to determinephysician recall of key product messages. If recall is high yet sales lag, the marketingstrategy may be flawed. However, if recall is low, management should implement a message


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leakage diagnostic and improvement strategy. Firms employ a number of research andtesting tools to determine where message leakage is occurring.

INDEXING METHODS

A-A-P-E-R (ACCESS-ATTENTION-PERMISSION-EXPERIENCE-REPUTATION) MODEL


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CALCULATION OF COMMERCIAL INDICES

Indices (or Indicators, or - financially - Ratios) are useful to understand and to monitorPerformance Components behaviours and trends. They are numbers or percentages andrepresent mathematically figures, facts and situations of an Enterprise.Monitoring Indices over periods of time is a very valid way of controlling Performance

Components trends. Indices are useful on their own and even more when put in relationshipthe one to the other. It is also possible to create an Index representing the overall behaviourof a number of Indices, and it is even possible to create an overall Enterprise PerformanceIndex.

Ims = Market Share Index = 100 x Overall Market Value ($)/Sales ($)

PCPM (Per Capita Per month) = [(Total Sales)/(12 X No. of Sales Person)]

B.E.P point where Sales = Expenses

Efficiency of any system = output /input= Sales (Inflows)/ Input (expenses or outflows)

Conclusion

IF PCPM < B.E.P(Breakeven point)Then No. of Executives should be reduced to making PCPM higher than B.E.P, if not able togenerate higher PCPM then company should dissolve that territory.

PCPM = B.E.P (Breakeven point)


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No. of Executives should be reduced. Executives should be more focused on Profitableproduct (Product where profit margin is high) rather than Normal products( which companiesare just dealing for name).

If PCPM > B.E.P (Breakeven point)Good for company. This can be considered as Potential territory. No. of executives can beincreased to utilize this potential territory up to a certain level.

This scheme is generally used by Zydus Cadilla & Unisankyo Pharmaceutical companies. Ihave done telephonic Interviews of Zonal & National Sales Manager Ritesh Joshi & HemantJoshi for finding these best models. I want to appreciate their efforts for sharing their valuableknowledge.

For other cases subjectivity in decision also plays a vital role.

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Sales Force Effectiveness for Pharma Industry