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.

How do you view CRM: as a chore, as a way of saving effort, or as a valuable window on your customers’ world? Leading CRM vendors tell Pf where the pharmaceutical industry sometimes gets it wrong – and how a combination of new business thinking and new technology can turn customer data into powerful insight.

Customer Relationship Management (CRM) is more than an electronic system for data handling. It’s a well-established business strategy for collecting and utilising the most relevant information about the market. As such, it is a function of the whole company that lends itself well to an integrated commercial strategy. A glance at the industry’s news shows that customer and sales data affect every aspect of a pharmaceutical company. Moreover, how a company uses those data to develop its products and communicate their value to customers can have a significant impact on customer relationships.

But is CRM in danger of going stale? Has it become something that only sales people use, and even then not whole-heartedly? Is a perceived lack of progress with CRM due to problems with the technology, the people using it, or companies’ approach to it?

The answer, according to the specialist CRM suppliers Pf spoke with, is all three. But as they also told us, these drivers of fail need to change. A new ‘golden age’ of CRM is on the way.

Dead-end data
According to David Round, General Manager at Cegedim UK, the most common problem of CRM use in the pharma industry is poor awareness of its potential: “If you have a particular group of users who don’t feel the system works for them, and therefore don’t put in the richness of information that they could, that has a bigger impact on the CRM project as a whole.” Unless the company is using CRM to its best advantage, field sales professionals may lack confidence in it as a tool. 

In addition, Round argues, not every CRM system is fit for purpose: “Where technology can be a hindrance is where the way that it works is relatively fixed or determined in some dark room somewhere, and it doesn’t match the day to day process of the people who are using it. The technology, if it’s not designed correctly with the end users in mind, can actually contribute to a lack of return or a reduced return on investment for the CRM solution.”

Adam Nicholson, Commercial Director at Conigi, identifies four sources of CRM blues: CRM only seen as a sales team tool, thinking limited by previous CRM experiences, fear of the system’s complexity and (conversely) fear/perception that it cannot deal with new commercial realities. All of these, he says, are consequences of narrow thinking: “The reality is that if you pick the right vendor and the right solution, you have enough headroom for development to build what you need now and as your business changes.”
Not seeing the wood for the trees, the insights for the data, is another source of CRM frustration. Dan Goldsmith, General Manager at Veeva Europe, argues that the most successful pharma companies are able to derive “rich and insightful information” from CRM by moving “beyond the operational or transactional information” to a deeper analysis of customer behaviours – with the CRM supplier “not just supporting their business processes but helping them innovate the way they engage and architect the customer experience”. 

Nick Plank, Director, C&C Group, says that CRM systems, like pharma’s operational model, have evolved to meet the needs of a changing NHS in the past decade – and will evolve further as technology continues to advance. “Ten years ago, the environment was very much focused on the rep and in particular on the traditional one-to-one face-to-face style of territory organised sales forces. Fast forward to the present and CRM looks very different, with KAM structured teams engaging with customers on an account basis as opposed to a geographical brick structure, plus a variety of new stakeholders in CRM from medical development advisors to medical science liaison. A fully-integrated CRM accessible to multiple stakeholders is now essential if business functions throughout the enterprise are to have holistic visibility of the account and contribute data from their specific areas such as information gathered during digital engagement.”

Keep taking the tablets
All relevant stakeholders are agreed on the revolutionary importance of the iPad and similar tablet computers for CRM in the context of field sales. These devices take CRM out of the office and onto the road more effectively than ever before. They also have the power to support closed-loop marketing and related strategies, giving CRM a more dynamic role in the customer relationship and in the pharma company.

David Round comments: “I think that CRM is about to enter a pretty golden age, because the birth of the tablet computer and the iPad in particular means that the rep can use the system much more effectively on the go. Reps are more inclined to enter information just after the call than wait until they get home, and what the iPad does is give them the ability to record this information with much more richness and much quicker after the interaction. Obviously, mobile access to the internet is still limited in many medical locations, and for this reason, the CRM must be able to provide most of its functionality in an office mode. As many reps would point out – what’s the point of having a mobile CRM that only really works online?”

In addition, the iPad gives the field-based sales rep rapid access to market information at a time when the UK drug market is going through dramatic change. The ability to keep track of the changing customer base and to structure new relationships with new types of customer is essential, and new technology is vital for this. As Adam Nicholson observes: “Gone are the days when you had a linear customer relationship in place and a linear CRM system to manage that. With the changes in the NHS, you’re going to have to have dynamic processes in place and a dynamic solution to manage it as you move forward.”

The iPad is arguably the first technology to make mobile CRM an effective reality. Dan Goldsmith argues that “it really hasn’t been until the introduction of the iPad that we’ve seen both widespread adoption and significant results delivered to pharma”. There are three reasons for that, he says: the mainstream adoption of mobile technology, the industry’s new appetite for “advances in digital and interactive presentations with customers”, and the reliability and simplicity of the iPad itself – “the ideal device at the ideal time”.    

A recent IMS report highlighted the growing importance of embedded business intelligence within the fully-integrated CRM. “This is where hosted European sales data warehouses are particularly useful, because they reduce costs by providing a single integration for analytical CRM across Europe,” says Nick Plank. “A managed hosted European approach to analytical CRM means employees across Europe can access market intelligence online when and where they need it without installing software. It also aligns well with the current move from on-premise systems to Cloud CRM because analytical data can be passed directly to the operational vendor using site-to-site integration – giving reps access to information immediately, wherever they are, via their mobile CRM tools or mobile business intelligence apps.”

Building dynamic relationships
What makes for an effective CRM system? The answer depends on how the sales professional and the company use the system. CRM is not about customer data: it’s about customer relationships.
David Round emphasises the need for “human-centred design”: it’s essential for the CRM user to be able to see the data in context and react appropriately. He uses the analogy of a sat nav system: it’s a superb tool to get you through unknown territory, but you also have to keep your eyes on the road. So the best systems support customer relationships instead of providing an electronic surrogate for them.

Round also warns against being too well-informed. If a rep greets a new customer they have never met before with the words Hi, I’m Jo. How are your children Sally and Billy? the relationship will get off to a bad start. What the rep really needs is the relevant background information to understand the customer’s role and make proactive suggestions from the start.

As Adam Nicholson observes, the CRM system has to deliver insights at both the quick overview and the deeper insight level: “We are rich with data within the industry; the old challenge has always been how you turn that data into information. Successful solutions should allow an individual to look at their data at a top level when they need it, but give them the ability to drill down into the customer data or the sales data to gain more in-depth analysis when needed.” 

The best CRM solutions are able to serve the needs of the most ambitious sales professionals and companies. Dan Goldsmith comments that cutting-edge CRM systems are enabling “interactive presentations, delivering better segmentation and targeting down to a more individual level, as well as collecting more psychographic or behavioural information”. The ultimate (and realisable) goal is a “behavioural profile” of each customer that feeds back into the sales message and interaction.

The bigger picture
The closed-loop marketing model implied by this approach cannot begin and end with sales. Adam Nicholson speaks for all forward-thinking CRM vendors when he says: “If you really want to make CRM work, it’s about engaging all the functions, be that marketing, medical, regulatory or finance, because if you implement the theory of CRM it actually impacts and improves business processes across all the functions.”

If you started reading this article with the mental image of a lonely sales rep (that’s you, that is) wrestling with interminable on-screen figures on a laptop in a hotel room, or on a tiny mobile phone screen in a rail station café, maybe it’s time for you and your company to consider upgrading your hardware, software and probably footwear. New CRM systems are able to support an integrated strategy of commercial interaction at every level of your company, and mobile devices exist to make the most sophisticated CRM systems easily applicable wherever you are.

With the right CRM system, the right mobile platform and the right attitude, you can: research each customer’s needs and behaviours; gain up-to-date information on the rapidly changing customer base; be fully primed with the right clinical information and tailored marketing messages; read and record key information without eyestrain or signal problems; and fit the technology to your individual needs and your company’s business goals. It’s up to you.