February 17, 2015
Alternative promotional models in pharma: do you have the right one?
The traditional sales rep model faces a myriad of challenges due to regulations and barriers imposed by physician associations, or institutions. Alternative promotional models have been developed to overcome these barriers and to be more cost-effective. This month’s meeting showcased an expert panel who shared how alternative promotional models can achieve success by breaking out of the mold.
The meeting was facilitated by Enza Cignarella, Director of Strategic Operations, Oncology Novartis who started the meeting by saying that pharma’s idea of a “business model” is often thought to be associated with how sales reps promote, but in fact it’s how pharma makes money. She pointed out that many companies have changed the way they make money, such as Walmart, Costco and Starbucks. She showed a very interesting video clip entitled “Rise of the Machines” by Dr. Eric Topol, which showed the way of the future with medicine, such as medical devices that use mobile technology and biosensors.
The first speaker of the evening was Paul Abbass, Principal of Légitimed, who pointed out that the challenge in pharma is no different than it’s always been - reaching high value customers with meaningful content in a sustainable way. In order to do this, companies need to ask themselves: what is our value proposition? To change the way messages are delivered, companies need to look for opportunities to integrate a multi-method approach with new ideas and methods. Three simple questions can put companies on the right path to developing integrated strategies, which are:
- What does the customer “need”, versus what they want?
- What will technology support?
- What will the market bear, both externally and internally
Paul left the audience with the following thoughts:
- The traditional “go-to” business model is becoming obsolete and we in pharma know it
- Companies are toying with solutions, but no one has implemented a strong working model
- This is creating a huge first mover opportunity to:
- Be seen as leaders and innovators
- Create a breakaway competitive advantage
- Generate superior results
- Drive business growth
- Attract top tier talent
- Follow the innovation model; begin integration (multi-method over time)
The second speaker of the evening was Ian Wombwell, Manager of Strategic Accounts at Roche Canada. Roche found that there was an organizational “gap” between sales reps and government relations and in between where the product meets the patient. In order to address this gap, Roche has developed Strategic Account Managers (SAMs) and key account managers (KAMs), in addition to regular sales reps. He outlined a number of differences between them, one of them being that the core strategy for reps and KAMs is product selling, and for SAMs, it’s integrated partnerships. Ian added that many healthcare companies are moving towards account management and experimenting with it.
He left the audience with a number of “principles from the trenches” on how to make SAM work for your business:
- Make a long-term commitment
- It’s a journey; ensure that it’s well embedded; build on some early successes and communicate them internally
- Extend it, optimize it and exemplify best practices
- Get organization-wide engagement
- If you don’t have it, gaps can develop with internal structural changes
- Choose the right people
- Some of the best sales people make the best KAMs, but this is not always the case
- Have a smart hiring practice; determine a set of job competencies and build a job description that’s specific to your KAM or SAM roles
- Continuously communicate the value that you’re delivering
- Value is not always measured in dollars and cents; need to find way to communicate that and do it on an ongoing basis
The last speaker was Joel Erickson, Vice President of Ashfield Healthcare Canada Inc., and he spoke about how the traditional sales model is under significant pressure in Canada to change. The new commercial model offers many sources of information for healthcare professionals and we are constantly trying to achieve better results using these sources. He pointed out that face-to-face contact with sales reps is still the most widely-used and preferred channel, but also the most costly. However, many different types of reps exist now, such as specialty, customer service, KAMs, nurses, MSLs, etc. Companies are trying to find the right balance, based on business needs, and ensure that they work in an integrated and complimentary fashion. Joel suggested that there is a need to have a layered multi-channel mix of communication, using the plethora of sources that are available, and integrate them to achieve exponential results.
Joel provided his stages in the evolution of multi-channel offerings:
- Stage 1: ability to deliver more than one channel
- Stage 2: Stage 1 plus collect data in one data warehouse and provide reports to the client on the range of interactions with each HCP/patient
- Stage 3: Stage 2 plus overlay sales data/patient response and segment HCPs/patients based on their responses to different channels or combinations of channels
- Stage 4: Stage 3 plus adapt content/communications based on response and segments
- Stage 5: Manage stages 1-4 under one contract, flexing channels as required
The evening finished with a Q&A session with the panel, which is outlined below.
- Q: What types of incentives do you offer to SAMs to compensate them?
- It’s a challenge because their role is not tied to sales incentives
- Compensation is usually a mix of organizational imperatives/important strategic directions that need to be communicated to customers
- Q: How do you convince upper management about ROI (e.g., e-detail aids)?
- The metrics and the KPIs that you’re going to look at are sometimes lagging indicators
- If there’s better communication and collaboration among HCPs, you win if you have the best medicine on your side
- An analysis of e-detailing showed that one email sent out to targets did what 73 reps would do in 2 days
- Use an integrated approach, it’s not “all or nothing”; there are supportive ways of delivering to customers; need to listen to the customers and what’s valuable to them
- Q: For measuring ROI, or going into certain alternate ways of marketing, what are the top mechanisms to associate these tools with higher value to the business? Metrics are key right now - what would they be?
- Customers are moving toward richer, engaging content and electronic tools seek to increase reach and frequency
- If the reach and relevance is there for the client and you’re providing the mechanism to provide the reach and frequency, that’s going to drive your business
- Get a small list of KPIs, because there are just too many; for example, did they enjoy the experience, did they learn, did it change their practice, etc.; rich list of indicators that you can put in the educational program
- Automated marketing is a “new” thing that ties in all the different promotional elements and personalizes the information even down to the individual (i.e., Marketo); encourage you to look into those solutions that tie tactics together and applies segments and reports for you
- Q: Is it necessary to build a SAM structure within your organization, or can it be built by an outside supplier that already has relationships with key stakeholders?
- SAM is a challenging endeavour to get into, so if there’s a way to piggyback onto another organization that’s already doing it, might be an opportunity there
- Q: Why has it been so difficult for pharma to turn the industry on its head? Are we in denial?
- There are restrictions in major corporations and anything that upsets that is difficult and hindered
- Changes don’t have to be radical, can be incremental changes; there are opportunities to pilot things all over the place
- It’s a conservative environment, but times are changing, we need to try different things; if you’re going to fail, fail early and move on; it’s an iterative process
Enza summarized what had been learned from tonight’s session, calling it her “4 Is”, which were: innovation, incremental, iterative and integration.
Be sure to join us for next month’s meeting for an exciting meeting on the Power of Emotion in Marketing!
Presentation (PDF 3.10 MB)
View the ‘Alternative promotional models in pharma: do you have the right one?’ video brought to you by Pro-Staging.