Fundamental Shift in Pharmaceutical Sales Planning
In the pharmaceutical industry, one of the market truths over the past several decades is that change comes very slowly. Old routines for sales planning and strategy, formed over generations, relying on hand-to-hand marketing directly with physicians was the tried and true way to get pharmaceuticals to patients. But like everything else in the modern era, that fundamental practice is evolving to meet the realities of the market. Sales organizations understand that they need to move at a much faster pace if they want to keep up with the accelerating world around them.
In this and a subsequent blog post, we will discuss this shift in the pharmaceutical sales landscape, and how sales organizations can adapt to these changes.
A recent market survey by ZS Associates, documents a major trend across the industry. In summary, the research shows that traditional sales planning is evolving to an account-based approach. The bottom line is that sales organizations must adapt to this approach to successfully compete in the market.
The Changing Landscape of the Pharmaceutical Sales
The traditional pharmaceutical sales model has been hitting the road. Sales reps show up in a doctor’s office, wait for an opportunity to meet with a physician, discuss the newest pharmaceuticals, and leave free samples for the doctor to distribute to his patients. In days of old, that made sense because doctors weren’t as busy and often learned about new prescriptions from the pharma rep.
Fast forward to the 21st century, and you can see why this model is failing. First and foremost, physicians don’t have time to meet with sales reps. That means a rep could wait hours for a meeting vs. an average of 12-to-15 minutes at most in the 90’s. And that limited facetime continues to shrink. Thirty percent of doctors now meet sales reps fewer than seven times a year, for an average of two-to-three minutes.
Given their limited time, Doctors are often inundated with hordes of sales reps competing for their time and attention, even staking them out in the hallways of the facility. That makes for a costly and difficult sales process.
In addition, with the consolidation of the healthcare industry, the Doctor is no longer the primary decision maker – they are a part of an entire group of “organized customers,” with decision making elevated to the group practice or Integrated Delivery Networks. Other stakeholders may include accountable care organizations and other layers of review and procurement processes. There are fewer solo practitioners, and economies of scale are trending towards the customer now being the entire network.
Finally, there are more regulations that cover sales activities and the distribution of samples to doctors for their patients which makes establishing brand awareness increasingly more difficult.
Despite this fast-changing and complex landscape, many pharma companies are lagging far behind when it comes to adapting, and trail behind other industries that have learned to evolve more quickly.
The Need for Key Account Management to Stimulate Pharmaceutical Sales
To succeed in the pharmaceutical market, sales organizations must develop a go-to-market model that adapts to the new realities. That means a strategy that recognizes the size and breadth of the new “organized customer,” with a variety of stakeholders involved in purchasing decisions. Bringing this new layer of customer needs into focus at the center of sales outreach is essential. With the right type of key account management program, sales organizations can revitalize their models, regain that essential role as a trusted consultant to healthcare stakeholders, and play an influential part in the decisions they make as to which new drugs will be included in their medical arsenal.
As the ZS Associates survey found, “75% of organizations will be implementing strategic account planning within the next two years.” Those who are lagging behind, will get left behind.
In our next blog post, we will describe how sales organizations can adapt to these fundamental changes.
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