Despite all the rhetoric about multichannel marketing, patient centricity and the inexorable rise of digital, the most effective sales channel is still standing ‘two feet in front of the doctor’. This is not to say that digital isn’t useful, but too frequently, while the costs of digital activity appear low, the actual economic return in cash terms can be disappointing.
The reason is twofold. Firstly, most digital activities cost a small fraction of traditional methods. Secondly, when people talk about digital they often mean different things.
With an acceptance that ‘people prefer to buy from people’, the traditional sales model is, however, coming under economic scrutiny. Today, healthcare professionals are under time and budget pressure. As a result, their degree of freedom to engage with representatives and adopt new products is curtailed. This has spawned variants, from key account management to service representatives but, ultimately, the underlying economics remain largely unchanged.
There are a number of ways in which the average sales team can work more effectively. Note effectively, not efficiently. To quote the American management scholar Peter Drucker, “efficiency is doing things right, while effectiveness is doing the right things”.
The key to effective selling is a concentrated effort on the right activities, directed at the right people. This is in contrast to the control and command model pursued by many companies which focuses on call rate, coverage and frequency. It is also at odds with the rather laissez faire view that each representative runs their own business and makes their own unilateral decisions. Both approaches are wasteful for different reasons.
At one end of this spectrum we have a highly mechanistic tight control model that stifles creativity and racks up massive wastage as representatives, pressured to meet quotas, pile up calls at ineffective frequencies on ‘soft’ customers. At the other end, management abdication may lead to a lack of message consistency between adjacent geographies.
A question of progress
A more productive approach is to carefully consider the structural and economic distribution of therapy sales on your territory. By structure I mean the type of organisations and how you approach them. One key structural break is between hospitals and GP practices. What do the referral patterns look like in your territory and which hospital specialists are ultimately supporting, influencing or driving demand?
Secondly, how are prescriptions filled and which pharmacies service the bulk of your key practice prescriptions? Thirdly what is the mix of dispensing and non-dispensing practices? Finally, how are sales distributed by practice size? Unless we understand this web of relations, optimal management is illusory.
The above questions are some that I would expect answers to within a territory business plan. For ease I use the example of primary care, but this argument may also apply to hospital departments. The key to understanding is sound, well-organised local knowledge. Your local territory manager should have this at their fingertips.
Forget the standard set of dashboard charts which frequently act to distract and obfuscate the truth – take a lesson from Lord Alan Sugar and follow the money.
A sound understanding of sales economics is key to success.
Recently GSK announced that it has abandoned individual sales incentives and focused on rewarding the right inputs. The question is, which are they? Do we view a practice as a body of healthcare professionals and relevant support workers? Alternatively, do we see a nominated contact or contacts within a given surgery, thus allowing us to cover more surgeries? See figure 1.
Do we see dispensing doctors as a rural relic? Or, perhaps, we recognise that with a considered approach you can win a much greater market share within these practices, and that some have tremendous potential to influence?
Furthermore, what is the annual value of each practice in cash terms, divided by the cost of servicing that account? What generally drives local sales is the recognition that every sales person has restricted time and making the right choices is critical to driving results. These choices are not made in a vacuum, however, so the local environment will strongly influence the effectiveness of alternatives.
These differences are not individual, and examining a sales force generally reveals several different field force strategies. Here, sound analysis can identify an ‘optimal’ way of working that may be far more effective. Identifying these strategies and adopting a learning approach will allow your field team to keep pace with their environment and maximise return.
In conclusion, in order to maximise sales, it is necessary to understand how sales are distributed and the principle drivers of cash flow. Once we understand where profits accrue we can then focus attention and capitalise upon the opportunity.
Beware of cash traps that consume more time and money than they generate. Given the actual proportion of time spent with the customer the simple decisions discussed
here can have a big impact. See figure 2.
The forward-thinking manager will utilise leading edge analytics to quantify the impact of sales people on each practice, rather than rely on the time-worn techniques that were once the norm.
Dr Graham Leask is a consultant and writer on pharma and healthcare. He spent 15 years as a member of the faculty of the Economics and Strategy Group, Aston University.