Pharma’s commercial excellence efforts recently have been largely focused on customer centricity and multichannel marketing. But commercial excellence is a much broader topic encompassing:
- How to drive more sales through sales force effectiveness, marketing and sales alignment, marketing excellence, and the use of customer insight to improve strategies and tactics;
- How to improve profitability through resource optimization across products, geographies and customer activities with a renewed focus on customer profiling, segmentation, targeting and cost efficiencies.
Steve Jobs used a commercial excellence strategy when he was rehired to turn Apple around. Cancelling over 70% of the projects and laying off thousands of people in order to focus on a few products, Jobs got rid of the operational complexity and ‘trimmed the fat’. He refocused the portfolio and stopped production of uncompetitive, unprofitable products. He transformed the organization to be more efficient and effective with the current resources.
Where does SFE fit?
Sales Force Excellence (SFE) still has an important role to play in overall commercial excellence. In examining sales reps across industries, management consulting firm, [Bain & Company 2018], concluded:
Failing to understand and guide how reps spend their time leads to overstretched teams and thus undermines the following basic sales principles: increase the number of interactions with the right customers; make the most of each interaction; use data to inform all of these decisions and track the relevant activities and outcomes. [Bain & Company 2018].
In this study, fewer than one-fifth of respondents said they have a data-driven, quantified understanding of the total market opportunity and untapped customer potential. Even fewer regularly determine the required sales capacity and coverage based on this market opportunity. And fewer than one-quarter of survey participants have an account management process that identifies critical actions, such as cross-selling opportunities, based on understanding how customers make decisions.
While this research was not specific to pharma, the conclusions sound very familiar and offer a good reminder to remain vigilant in ensuring commercial excellence remains high on the agenda.
Why commercial excellence?
Ensuring our marketing and sales capabilities and activities are efficient and effective as possible is even more crucial than before in light of
- The growth in generics and biosimilars challenging global brands;
- Pricing pressure from payers and policy makers tasked with balancing national healthcare budgets to provide access to new expensive medicines for smaller patient populations or to realize improvements in the quality-of-life in the mature patient markets;
- Customer expectations set high due to customer experiences created across channels in other industries.
SFE can still have an impact. Businesses can see revenue rise by 20% to 25% as a result of focusing sales efforts on the right customers and can enhance margins by optimizing cost-to-serve and improving price realization. [Bain & Company]
In the pwc 2020 Series, Price Waterhouse Coopers proposes that in order to be successful, pharma companies will need to stop the aggressive product-focused marketing and develop marketing and sales functions that are fit for the future and a knowledge-based commercial organization.
With diminishing face-to-face access to HCPs and the explosion of information via digital channels directed at HCPs and patients, every interaction must deliver on the objectives.
What should we focus on?
Begin with an initial assessment of existing capabilities aligned to the key levers and objectives. Establish a baseline and indicators of relevant capabilities. Use quantitative market measures and qualitative interviews across the full organization. This is an important step toward getting everyone involved and on board.
External benchmarking of capabilities is also valuable and provides credibility to the baseline and any aspirational goals. By identifying capabilities gaps vs. competitors, development efforts will be best prioritized and planned.
Focus on the right capabilities that can be linked strongly to the current commercial strategies e.g. a big brand strategy or a launch strategy. Addressing knowledge and skills gaps can require both short-term training and longer-term coaching. Communicate with your stakeholders who may be otherwise expecting shorter-term results.
Actando can help you with assessments, learning and resource optimization analysis. For more information visit us at: Actando.
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The Actando Consulting Team