Analysing the performance of sales representatives has never been more important to pharma. David Round, Cegedim Relationship Management, explains the importance of Customer Relationship Management (CRM) and business intelligence in tracking and improving KAM activity.
In the good old days, performance measurement was about coverage and frequency, sales volume and value, and various other activity-based measures. The customer base rarely changed and pharmaceutical companies had a consistent approach to tracking representative’s performance. Those days are long gone. Yet despite the widespread adoption of Key Account Management and the challenges of meeting the needs of a now constantly changing customer base, some companies are still reliant on more traditional measures.
Over the past decade, the pharmaceutical industry has endured/embraced numerous changes, not least the shift towards the Key Account Management (KAM) model. Yet despite the declining relevance of ‘coverage and frequency’ in today’s highly complex sales environment, there is still no consensus across the industry as to how best to measure and manage performance.
The traditional model was straightforward and adopted by pretty much every company, irrespective of therapeutic area. It was a relatively simple process to determine the right message and assess the required frequency of visits to influence prescribing. But it was not always satisfactory – not least given the inability to directly match activity information to a specific end sale.
The good news is that now the industry can measure absolute performance against definite success factors, such as whether or not the product is on formulary, providing a far more tangible link to KAM activity. The challenge is trying to find meaningful performance measures to support a sales process that could last for 18-months and is specific to the requirements of the local health economy.
The KAM model is indisputably harder to measure. It is complex, multi-layered and involves numerous individuals within the team. Pharmaceutical companies need to put in place a way of supporting KAMs within the local health economy, co-ordinating the many individuals and tasks required to deliver the key account plan and understanding how best to drive the process through a number of key milestones towards defined end goals, such as progression through the stages of local drug approval process.
For companies that can leverage strong CRM and business intelligence technology, there is an opportunity to attain unprecedented granularity of performance information. In this multi-discipline environment, the CRM system is fast becoming the key repository for KAM information, from the key account plan and the SWOT analysis, through to tactical plans, including the required engagement with specific individuals within the local health economy. It is the source of information for defining the internal resources required to undertake these tactical requirements and, critically, provides the central platform to track the progress of the key account plan towards specific milestones.
Today’s business intelligence technology allows pharmaceutical companies to build on that CRM system to track performance at several levels. From the task/action level for each individual user, through to the performance against the business objectives set for each account, and up to the overall account ranking, which demonstrates performance towards the end goal.
Using dashboards at each level provides the KAM with an immediate insight into the status of tactical actions that need to be carried out to achieve the overall account and strategic objectives, and how the performance of these actions is affecting or could affect the longer term performance and account status. Furthermore, by using traditional red, amber and green to highlight the action status, a well designed dashboard can make it far easier to prioritise activity and minimise the chance of action slippage which could damage the entire team’s performance. For example, has the medical scientific liaison engaged the local Key Opinion Leaders or stakeholders; or the KAM attended formulary meetings?
Determining performance measures
This visibility of activity, and the ability to track performance in real-time is key in enabling the pharmaceutical company to ensure the key account plan is progressing. With a 360 degree view, companies have a fantastic platform to achieve excellent performance management. The challenge for pharmaceutical companies today is to determine the relevant metrics.
And this, to date, has been a stumbling block for many companies: simply measuring performance against the rest of the industry is no longer relevant. In this brave new world, every pharmaceutical company has a different value proposition and supporting strategies that reflects specific therapeutic areas and the individual local health economy.
The performance measures must reflect that value proposition. However, since value propositions vary between therapeutic areas and within different local health economies, companies that opt to impose one set of performance metrics across the board risk fundamentally constraining the KAMs. Metrics must be set within the context of each specific account plan, and then rolled up to measure performance within the overall market strategy.
With this local empowerment, pharmaceutical companies can then truly enable KAM through full local budget management. KAMs can include budget information within the CRM system, from the cost of promotion meetings to grants and sponsorships, providing a single, central resource that can deliver key insight into the effectiveness of budget management within the overall context of performance against business goals.
Adding sales data provides pharmaceutical companies with the ability to assess performance from a P&L perspective within a local health economy.
After decades as the primary way of measuring performance – both internally and against the competition – it is no surprise that activity measures are still in place. This is an easy crutch to lean on. But if organisations really want to create highly efficient, functional KAM structures, the measures need to change and support KAMs in day to day, as well as long-term, account management.
The market has fundamentally changed; these traditional measures will not be replaced with another standardised industry measurement of KAM performance. The key question is: just what will success look like under this KAM strategy to your organisation? Pharmaceutical companies must determine those measures of success that reflect the corporate strategy – and put in place methods of tracking movements towards that success.
Deploying the right technology is critical. True KAM tracking and performance management cannot be achieved without excellent CRM and business intelligence tools – the processes are simply too complex and involve too many different people. But ultimately, it will be the ability to monitor the soft and hard measures that reflect local/account level objectives that will be key in this evolution from the familiar industry standard approach to performance management to one that is highly tailored, highly specific and flexible enough to reflect the demands of a constantly shifting customer base.
David Round is General Manager of Cegedim Relationship Management.