Everyone in pharma is talking about key account management – but what does being a KAM mean for the sales executive?
What is key account management all about? Perhaps an anecdote will help...
A travelling salesman was on the road and stopped in a small Somerset town. There appeared to be no hotel and the local pub had no rooms available. So he drove out to the nearest farm and knocked on the door. An ageing man answered. The rep explained his problem and asked if the farmer had any rooms available. “Sure,” the old man said. “My 19-year-old daughter normally lives here but she’s away at college, so her room’s free.” The rep nodded and turned back to his car. “Hang on,” the farmer said. “I said there’s a free room.” “I’m sorry,” said the rep, “I’m in the wrong joke.”
The point is that a traditional sales rep has a well-defined script, a known role, within which certain messages and behaviours are taken for granted. The rep just has to make contact and deliver the message. That’s why he or she is the butt of so many jokes. It’s also why the traditional sales role is disappearing from our information-charged world of informed customers and organisations that make decisions on a committee basis.
Read the joke again and think of it as a metaphor for a modern business relationship. The farmer’s spare room stands for the technological and human resources the customer can draw on. The farmer’s daughter being in college stands for the customer’s new education and range of business contacts.
To employ a technical metaphor, if the traditional sales executive is a plug looking for a socket, the key account manager is a USB flash drive from which a wealth of complex information can be downloaded. The KAM is not only addressing a plurality of customers but representing a plurality of company perspectives: sales, marketing, research, finance and management.
You’ve heard of cloud computing. Key account management is cloud selling – a way of bringing together the best elements of your company’s business strategy with the key aspects of the customer organisation’s business strategy. That classic business cliché, my people will talk to your people, is at the heart of KAM.
Meeting the family
Key account management assumes that the individual customer belongs to a complex buying environment – he/she is influenced by a range of people and uses a range of information resources. The appropriateness of this model to the NHS is obvious – and while the current NHS reforms affect the structure and workings of key healthcare accounts, they certainly do not dilute the need for such accounts. The KAM has to work with the purchasing system by identifying, and building relationships with, its most sensitive points of contact.
Identifying the decision making units within the customer organisation and working strategically to maximise your company’s impact on them is half of the battle. The other half is directly or indirectly bringing the key elements of your own company into contact with the customer organisation. This is where new technology comes into its own: nothing will make connections better than well-presented information that conveys the richness and immediacy of your business case. Tablet computers and smartphones also make the co-ordination of KAM within your own company swifter and easier.
As many pharma companies have found out, simply creating a KAM role in your sales team and expecting that to make all the difference is foolish. KAM is a function of the whole company – which seeks to meet the needs of patients via the health systems that provide treatment. The product reaches the patient via a treatment pathway that the health system develops according to its clinical and financial priorities. That pathway and the reasons for it are what the company needs to understand and change.
Looking after people
Pf spoke with Paul Curbbun, National Key Account Manager at Rosemont Pharmaceuticals. Before taking on his current role, Paul was National Hospital Manager for the same company. Before that, he was working in FMCG and other sales sectors – where KAM has been prevalent for two decades. So Paul is the KAM who came in from the cold.
On how his working life has changed, Paul says: “My life hasn’t got any easier or any harder. The only thing I’ve cut down slightly is the mileage. I’m at home more than before because I tend to use home as my office. For instance, this morning I’m spending two or three hours at home preparing before going out. There’s a lot more reports to put together as well as analysis of sales.”
On the changes in his customer base, he observes: “As NHM, I was seeing everybody – pharmacists, nurses, doctors, therapists. That’s all gone now, and what I’m seeing is mainly the buyers from the key groups, from specific retail groups to wholesalers. A lot of what I’m doing is building up business partners.”
What KAM is all about, he argues, is looking after customers: “Nothing feels better than when you’ve asked for something and you get that something. It’s about not letting people down. It’s truly looking at their business and your business and linking the two together for the benefit of both.”
That contrasts with the traditional pharmaceutical sales role of hammering the product and the marketing message. The key account manager needs to identify opportunities and develop solutions, using the company’s product portfolio to optimal effect. “Whatever the account needs – it’s that simple.”
Don’t be a stranger
Rosemont Pharmaceuticals specialises in oral liquid medicines for people who have difficulty with tablets. Their products include a formulation of the diabetes drug metformin. With a clear USP and well-defined patient population, surely this is a case for traditional product-based selling? By no means, says Paul: “It’s critical that when a patient needs an alternative, a patient gets an alternative. So from a key account point of view, you can make sure our products are where they need to be, so that patients get the right medicine and, most importantly, there is continuity of supply.”
For the sales professional, Paul states, the difference between KAM and their previous approach depends on how well they did the latter. “If you’re making calls for the sake of it, just to tick a box, obviously that’s a long way off – but if you’re going into an account with complete business focus, asking what it needs, closing the loop whenever an opportunity arises, you’re well on the way to a KAM role.” Sales professionals who analyse their sales and construct a business-focused customer database are also showing KAM awareness.
For the sales manager, the key to effective KAM is empowering the sales team to manage and take ownership of their accounts while guiding them to optimise their work as a team. KAM is not a solo activity. Paul remarks with some bafflement: “Something I could never get my head around was the fact that you often had four or five people selling the same drug over the same area. If you were devising a business model tomorrow, that would certainly not be it.”
In fact, KAM is so integral to modern business that it’s worth asking why the pharmaceutical industry avoided it for so long. The answer lies in its assumption of a difference in professionalism and consciousness between seller and buyer. For decades, pharma regarded its customers as business-naive people fixated on the patient relationship. Hence the adoption of ‘persuasion’ techniques such as NLP.
Times have changed, and bad business habits now carry too high a price. As the NHS – with its emphasis on cost-effectiveness and generic prescribing – becomes more like a business, and the industry – with its emphasis on patient-centred medicine and disease area knowledge – becomes more like a doctor, a shift from sales transactions to commercial relationships is essential for both. KAM is pharma’s only way in from the cold.