Pharmaceutical Sales Force Effectiveness Strategies

H E A LT H C A R E Pharmaceutical Sales Force Effectiveness Strategies Evaluating evolving sales models & advanced technology for a customer centric ...
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H E A LT H C A R E

Pharmaceutical Sales Force Effectiveness Strategies Evaluating evolving sales models & advanced technology for a customer centric approach By Dr Ksenija Jakovcic

For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

Dr Ksenija Jakovcic Ksenija Jakovcic is Business Development Manager at SanMed, and provides independent consulting services to the pharmaceutical and biotechnology industry. Following her medical practice, Ksenija has worked with international pharmaceutical companies in Austria and the UK around the areas of clinical research and sales & marketing. Ksenija holds an MD from the University of Vienna, Austria and an MBA from the London Business School.

Copyright © 2009 Business Insights Ltd This Management Report is published by Business Insights Ltd. All rights reserved. Reproduction or redistribution of this Management Report in any form for any purpose is expressly prohibited without the prior consent of Business Insights Ltd. The views expressed in this Management Report are those of the publisher, not of Business Insights. Business Insights Ltd accepts no liability for the accuracy or completeness of the information, advice or comment contained in this Management Report nor for any actions taken in reliance thereon. While information, advice or comment is believed to be correct at the time of publication, no responsibility can be accepted by Business Insights Ltd for its completeness or accuracy.

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For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

Table of Contents Pharmaceutical Sales Force Effectiveness Strategies

Executive Summary

9

The pharmaceutical industry at a crossroads

9

Sizing and structuring the sales force for strategic advantage

10

Recruiting, training and motivating an outstanding sales force

11

Reinventing the pharmaceutical sales model

12

Utilizing new technologies for sales excellence

13

Beyond 2010 – The future of pharmaceutical sales

14

Chapter 1

The pharmaceutical industry at a crossroads

16

Summary

16

Introduction

17

The state of the pharmaceutical industry Patent expiration and generic substitution Pipelines not delivering innovative products Slowing growth in mature markets Government intervention and price controls Poor reputation and new restrictions Restricted access for pharmaceutical sales representatives Pharma industry revises Codes on interactions with physicians

18 18 20 23 25 26 27 29

The traditional go-to-market strategy ROI in pharmaceutical sales force has plummeted The access problem The end of armies of pharma sales reps in the field

31 32 34 34

Need for new marketing and sales approaches

36

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For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

Chapter 2

Sizing and structuring the sales force for strategic advantage

40

Summary

40

Introduction

41

The role of the sales force Determining sales force size Activity-based method Target return-per-call method Sales response method Getting sales force deployment right Resource allocation Optimal profitability Matching sales force structure with companies’ business lifecycle Sales force structure Getting the size right

41 42 42 43 44 45 45 46 48 48 50

From mass market endeavor to individual physicians’ needs Rethinking targeting strategy The impact of lifecycle factors on sales force targeting Year 1 – New product launch Year 2 – Accelerate growth Year 3 – Defend and grow Year 8 – Manage the sales decline

51 51 55 55 56 56 58

Conclusion

59

Chapter 3

Recruiting, training & motivating an outstanding sales force

62

Summary

62

Introduction

63

Hiring pharma sales reps: Getting the process right The impact of bad hiring decisions The right recruit Key points to consider when hiring

64 64 65 67

The evolving training needs of the pharma sales force The training dilemma Training for the new environment Changing environment places different demands on sales training Motivating and compensating the sales force Motivation Driving performance through incentive compensation plans

69 70 72 75 79 80 82

Conclusion

83

iv For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

Chapter 4

Reinventing the pharmaceutical sales model

86

Summary

86

Introduction

87

Sales force model progression

88

Addressing a range of new customers Existing stakeholders are gaining influence The path to key account management

89 90 92

Is the pharma sales rep an endangered species? The customer-centric approach: a new model for pharmaceutical sales

95 95

From mass army to specialty sales force

98

Conclusion

99

Chapter 5

Utilizing new technologies for sales excellence

102

Summary

102

Introduction

103

e-Learning – meeting sales reps training needs Case study – e-Learning as part of AstraZeneca’s sales training strategy

104 104

e-Detailing Virtual live e-Detailing e-Detailing through a portal for doctors Scripted e-Detailing The benefits of e-Detailing Putting it in practice: The key factors for success

105 106 106 106 107 108

From tablet PCs to closed loop marketing Will closed-loop marketing transform the pharma sales process? Common pitfalls on the way to implementing closed-loop marketing How to ensure successful implementation of closed-loop marketing

109 111 114 116

Conclusion

117

Chapter 6

Beyond 2010 - The future of pharmaceutical sales

120

Summary

120

Introduction

121

The sales force of the future: variable in size and structure

121

v For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

Will samples need pharmaceutical sales reps?

123

New industry models and their implications for sales force effectiveness Aligning marketing and sales to match the healthcare environment The use of analytics to drive sales force approaches Content-driven interactions between sales reps and customers To what extent will the sales model change in the immediate future? Designing a marketing and sales function that is fit for the future

125 126 126 126 127 129

Chapter 7

Appendix

134

Bibliography

134

Index

136

List of Figures Figure 1.1: Figure 1.2: Figure 1.3: Figure 1.4: Figure 1.5: Figure 1.6: Figure 1.7: Figure 2.8: Figure 2.9: Figure 2.10: Figure 2.11: Figure 3.12: Figure 3.13: Figure 3.14: Figure 3.15: Figure 4.16: Figure 4.17: Figure 4.18: Figure 5.19: Figure 5.20: Figure 5.21: Figure 6.22: Figure 6.23: Figure 6.24:

Projected revenue losses ($bn) due to patent expirations, 2007e-2012p R&D investment ($bn) in the US, 2004-2007 FDA new drug approvals, 2000-2008 Global pharma market growth slowdown Survey of US medical practices, February 2009 US sales force size - top 30 companies, 1997-2007 Pharma sales rep funnel Field force: Sales, cost and profit impact The impact of three different sizing scenarios on company profits Physician segmentation enabling effective targeting Modeling doctors’ prescribing behavior The training trade-off Effective sales force training responds to a new selling environment Sales rep characteristics with the most influence on physician satisfaction Implications for future sales force training Sales force restructuring and innovation - State of the industry The expected shift in marketing and sales efforts Implications for pharma companies on the path to KAM e-Detailing as part of the multi-channel approach to CRM CLM feedback loop TGaS survey on CLM implementation among top pharma companies, 2007-2008 Sampling trends %, 2008 Readiness for new business models in the next two years Future organization of the pharmaceutical marketing and sales function

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19 21 22 24 28 32 34 47 50 54 58 71 73 74 76 89 91 94 109 112 114 124 128 130

For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

List of Tables Table 1.1: Table 1.2: Table 2.3: Table 2.4: Table 3.5: Table 5.6: Table 6.7:

Blockbusters going off-patent 2010-2012 Planned job cuts by big pharmaceutical companies, October 2008 Target return-per-call method in eight steps by Zoltners & Sinha Comparison of sales force sizing methods Common pharmaceutical sales force training settings How tablet PCs support sales force activities New approaches to marketing and sales challenges

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20 35 44 45 70 110 127

For more information, please call Maureen Croce at 866/464-2776 Fax: 781/639-0529 email: [email protected]

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