Commercial Excellence 2.0

The pharmaceutical selling model has been established for decades. Much has been done on improving the model and squeezing the last bit of efficiency from the model using sales force effectiveness tools and IT-enabled solutions. In this three part article series, we challenge some of the fundamentals of the selling model and propose a new way to think about engaging with your customers as well as maximizing the return from your commercial spend.

We propose six tenets to Commercial Excellence 2.0 which we will elaborate in the third part article series. In brief, these six tenets are:

1. Move beyond share of voice: Engage with the customer to drive value in his business & ensure the messages delivered are differentiated, relevant and absorbed
2. Manage performance, not incentives: Understand the behavior of the sales force segments and then customise incentives and coaching to address specific patterns
3. Let the market drive marketing: Zero-base your marketing spend and then align your initiatives with where your brands are in the product lifecycle
4. Integrate to differentiate: Align the commercial model across sales and marketing and close the loop effectively
5. Middle managers manage a business: Equip Zonal / Regional managers with the right skills to manage a business vs. just managing sales
6. Sharing is caring: Pockets of excellence exist, but best practice sharing is rarely institutionalised, getting teams to learn from each other is key

Teach managers to manage a business, not sales

For a long time, the linchpin in any pharma field force has been the front line sales manager. He (or she) has been identified as the node to drive change and many elements of coaching and guidance have been deployed to ensure the manager can manage his territory well. This approach has been effective in driving change and has been the focus on numerous sales force effectiveness efforts. Yet, as this very same manager’s career progresses the focus still remains overwhelmingly on managing sales. A second line manager’s role is mainly to manage sales performance of the first line sales managers and to coach and provide leadership to the front line team.

However, if you look at the role they need to play, managing a zone or territory is a role that is much broader than simply just managing sales. At this level, companies should expect more from this resource in terms of delivering an overall business management perspective of the zone / region. Companies need to start thinking of a second line business manager almost like a mini-CEO for a region balancing not just sales performance but also resource deployment and optimisation.

We define a Zonal Managers role at three levels.

1. Delivering results/targets: Supporting his (or her) front line sales managers in the field in terms of managing performance and ensuring committed sales volumes are delivered
2. People management: Providing leadership to the entire field force in the zone, ensuring front liners know the territory and the sales plan, building selling skills to deliver tailored messages, customising incentives to deliver performance and acting as a role model for the team
3. Business management: This involves communicating with Head Office and the field, planning tactics, coordinating with sales ops, marketing, medical as well as recruiting. Additionally a Zonal manager needs to drive key account management in the zone / region, coordinate regional meetings and events, and manage administration and the zonal / regional costs.

However, the background of most of these managers is sales and they traditionally have their comfort zone in managing sales performance i.e. the first level and are too fragmented to focus on the people and business management aspects. The conundrum exists as to how a company enables the Zonal / Regional manager to think more broadly than month to month sales results.

We propose a senior management ‘Business Academy’ concept that is focused on building business acumen and not just selling / sales management skills. This is a focused effort deployed at the centre that builds the capability of the middle management. This is a long-term internal effort and not to be confused with executive education programmes which are just a point in time effort. The academy focuses on systematically deploying a set of tools into the hands of Zonal / Regional managers to help them become more effective in their roles. These tools are a combination of hard tools to support better business decision making, soft tools to ensure leadership competencies as well as capability building initiatives.

The academy is deployed through a combination of classroom training which includes structured training sessions, sales skills, coaching and motivating teams, as well as using analytical tools to enhance business judgement. This is combined with on-the-job training and coaching through dedicated coaches who train on coaching skills as well as day-to-day development of programme participants through interaction with internal light-houses. Our experience has shown a 10-15 per cent sales improvement in performance by deploying this targeted academy approach which is more scalable and can address a narrow part of the sales force, but have disproportionate impact on the ability of the on the ground sales team.

The ‘Business academy’ deploys the following kinds of tools: (summarised in the Exhibit I as well):

1. Analytical tools (Hard elements): These tools are simple analytical tools (typically based in excel or on a web-platform) and help simplify the major aspects of managing a territory. These tools automate analytics on the sales performance and deployment to highlight where the zonal manager should intervene in performance not just at the end of the month, but within the month itself. E.g. a tool which analyses weekly data and call logs to quickly alert a zonal manager of issues in a particular territory within the first two weeks of the month, can then help the zonal manager decide his travel schedule for the rest of the month so that he can focus where the issues are. Additionally, automated analytics on trends vs. previous months / weeks, sales rep segmentation in terms of performance and incentives are available and can be put in place relatively quickly.
2. Behavioral tools (Soft elements): These are behavioral coaching tools for a business team. In short capsules, essentially a zonal manager is trained to coordinate deployment efforts with marketing (an integrated approach to the territory), motivating the field force, codifying the ground level selling skills in an area and building a higher level relationship with senior doctors. Additionally, the softer elements address how to coach and mentor junior teams and manage people for performance.
   These tools encompass leadership behaviours that zonal managers must demonstrate and drive consistency in the soft skill development as well.
3. Business tools (capabilities): Typically, when people are promoted from the field, project management or planning is a commonly highlighted skill gap. Additionally, using business judgment to optimise the deployment at the bag level, mining customer relationship data, driving a coherent territory strategy, as well as effectively utilising sales effectiveness tools are skills that managers acquire over time. Transmitting these skills to junior teams usually takes time and happens in an unstructured manner. However, by encompassing these tools into codified blue-prints, this can accelerate the learning curve and significantly move the needle in managing business performance at the territory level.

Sharing is caring

Many companies believe they have done all they could in commercial effectiveness. Customer segmentation, calling plan alignment, sales training etc are all in place. Often times this will be true, but many would agree that while much has been done, they still observe pockets of excellence and weak performance. The difference between best performing and weak performing teams can be as much as 3-4x in terms of per capita per month. While policies, segmentation, deployment and brand spend are all aligned, it can be confounding to explain the differences in performances across territories and credibly address these differences with the sales teams in a way that they change their working and therefore brand position in the market.

Many times, companies review performance across these territories, but often the solutions designed are quite generic and ignore best practices that exist within the organisation itself. More importantly seeing solutions which work within the company and are accessible, help convince teams on the ground to do new things that they perhaps didn’t try in the past. However, mechanisms to share these best practices don’t exist. Often when we suggest this is the right thing to do, we are met with skepticism that this is a selfish world and people don’t want to share their secret sauce.

We would argue this may be true, but there are fewer more powerful incentives than peer recognition and appreciation in an organisation. A structured forum where people can stand up and share something new they are doing with their peers and get recognised for it is something that can break these barriers quite quickly. More importantly, hearing new ideas from peers which have worked in the organisation context can create great peer pressure to replicate new ideas.

It is important for companies to evaluate if they have the right mechanisms to ensure that the commercial model they have deployed is constantly improving and more importantly, these improvements are synthesised and shared so that the entire organisation can benefit. Continuous improvement on segmentation, beat planning, return on marketing investment are concepts that need to be relentlessly pursued, not just in pockets, but across the company. The way to do it is to ‘bubble up’ great ideas and share them across the organisation using a core platform. These platforms could be a ‘Business Academy’, ‘Knowledge forums’, ‘Learning sessions’ or however you want to call it, but it’s important that these ideas are found and shared. You will find not just pockets of excellence if you do so, but a broader more energised team working together to learn from each other.

This concludes our three part series on commercial excellence. Across the series we have walked through different elements of commercial excellence from effectively managing the field force, to driving an integrated zero-based approach to marketing as well as managing people more effectively to deliver. We hope you got some fresh ideas for your organisation and would encourage you to experiment with some of these concepts as only by challenging the status-quo will we find new ways of doing business and changing the game.