Friday, March 16, 2012

Customer Evolution Requires Pharm Revolution (Guest Post)

Today’s guest post is from Theo Fellgett, Media VP for SFE & Commercial Excellence at EyeForPharma, a Drug Channels sponsor. Theo provides an interesting viewpoint on customer evolution and the future of pharma by discussing sales models with executives from such companies as Novartis, Cubist, and IMAR Life Sciences.

The 2012 Sales Force Effectiveness & Commercial Excellence conference will be held June 12-14, 2012, at the Renaissance Woodbridge Hotel in Iselin, NJ. Click here for registration and Early Bird Specials.

Please contact Theo Fellgett (theo@eyeforpharma.com or 800-814-3459 Ext. 7591) with any questions about the article or the event.

CUSTOMER EVOLUTION REQUIRES PHARM REVOLUTION
by Theo Fellgett, VP Europe, eyeforpharma

The good old days are over. Once, profits were skyrocketing, Market Access was more straightforward and prices could almost be set at will. Today, in order to drive profits in this ‘new era’, a different approach is required – pharma revolution!

Where we were

Our commercial approach used to be simple, it was call-centered and transactional, and it relied on frequent, often repetitive interactions between reps and prescribing physicians.

Reps would flood as many prescribers as possible, with as many product offerings as possible in short visits of about ten minutes.

Where are we now

Growth projections for the one-time booming mega-markets of the US, EU 5 and Japan are in the one digit zone. Market Access is becoming increasingly difficult.

Macro-economic factors such as lower GDPs and falling tax revenues, explained Tyrone Edwards at SFE USA 2011 “are impacting healthcare budgets” and “promote more aggressive cost containment” leading to “increased pricing and reimbursement measures” as well as a favoring of generics.

Click here to view a selection of past event presentations for free.

Inflection point

Hugh Tippett, Head of Global Sales at Novartis, argues that the industry has reached an “infection point”. He claimed that the industry had hit “a junction at which the organizations that belong to it need to shift from the current way of doing business to a new model, since the old approach begins to offer diminishing returns.”

Although this is a challenge, it also “provides a company's executive team with an opportunity to set a trajectory that propels it into an industry leadership position” continued Hugh.

New model

The selling model pharma firms need to adopt if they want to not only survive but prosper in the present and future economic environment should be an “integrated one that is centered on value creation,” continued Hugh.

Cubist is a company that has successfully achieved this. They have managed to move from single to double digit growth in mature markets. Eric Kimble, VP Sales and Marketing at Cubist, presented a detailed case study at SFE US on this journey, with insights on which strategy won through and some examples of key change drivers. Eric emphasizes the importance of good management to succeed when implementing a new strategy.

Share-of-value and KAM

With a long-term KAM perspective in mind, the field force should no longer simply carpet-bomb prescribers with indiscriminate sales details during brief rep visits. Instead, their messages need to be tailored to different requirements of the customers. This is the future and the ‘Super-Rep’. Eric gave a great presentation in 2011. You can view it here.

In carefully prepared meetings with a well-targeted and segmented selection of customers, they should, moreover, aim to understand the existing “goals, needs and priorities” of patients, and provide help beyond the scope of product selling and “short-term gain,” argues Tyrone Edwards.

By using that knowledge as a basis for the development and implementation of new product solutions or improvements, he says “a tangible win-win situation” that is profitable for both companies and customers can be created.

This remains a key theme throughout the 2012 SFE & Commercial Excellence USA agenda, with new dedicated tracks on ‘Align your multi-channel messages around value’ and ‘to KAM or not to KAM’. More information on the event agenda is available here.

How can you achieve the change required?

Long-term relationships rather than short-term ones are the key. “Objectives such as increased brand awareness, satisfaction, and identification as well as compliance support, lead to better customer retention. Cooperation with Patient Association groups and local opinion leaders too,” says Tyrone, can be useful in this “new era”.

Flexible pricing models such as risk-sharing agreements could also become an option for sales managers. With such a contract, pharma companies can try to secure or improve market share by providing a money-back guarantee on the effectiveness of a drug.

How long will it take?

Companies won't be able to make the changes to their organizational structure and culture that are necessary to enable a value-based KAM sales model overnight, Tippett cautions. Imparting new skills, introducing new incentives and rewards and establishing new roles and all the other steps the transformation entails will require at least two or three years, he says.

Most importantly, perhaps, it's people's mind-sets across the company that need to be altered - from the top management to the traveling salesman. If that's done, anything seems possible. “Organizations are not a rigid structure but a harmonics network able to adapt themselves when the environment changes.”

It is clear that your customer has evolved, the question is: have you?

SFE & Commercial Excellence USA 2012 aims to help you to tackle this difficult transition with 6 focused sessions and 6 workshops to choose from over 3 days.

Just seen the 2012 line-up. Once again eyeforpharma has brought together the people most relevant to my business. A group of us from Roche will attend so we can hear the strategies and customer view on our commercial approach – looking forward to it!“ – Andreas Claus Kistner, Global Head of Commercial Architecture, Roche

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Theo Fellgett is a VP at eyeforpharma. You can reach him at 800-814-3459 Ext. 7591 or theo@eyeforpharma.com.

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