Despite the significant impact of sales resource decisions on company performance, many companies still rely strictly on the wisdom and experience of sales leaders for making such decisions. But intuition alone is unlikely to optimize sales performance.
Why focus on Sales Force Size & Structure in a multichannel era?
You may have an objective of entering a new market, reaching new customers, increasing frequency on existing customers, reducing cost, or better allocating your resources across customers and channels. Any of these objectives could be a reason to review the size, structure, and allocation of the sales force to increase effectiveness.
How should we calculate the optimal size and structure of a salesforce?
Using data-driven decision making via online tools in a structured approach increases the chance that the appropriate sales resources are placed against the best opportunities for maximizing customer value and company profitability.
Sizing and structure are not just about calculating the optimal number of reps. Sizing starts with the total number of contacts needed to optimize return, which leads to the quantitative calculation on Full Time Equivalents or FTEs needed. Each channel activity is based on the promotional response curve for that channel, with an educational meeting giving a shorter term "bump" and a quicker drop-off, and multiple sales calls on the same customer showing a more typical sales response curve.
The process usually starts from a good understanding of the competitive environment, the concentration of customers, their expected response to promotion, and channel preferences. Different products and different customer segments require different allocation of our resources – in this case, contacts – and therefore merit scenario planning under differing assumptions.
The cost and call capacity of the sales force play a role in optimal sizing. In most countries, the Sales Force cost represents a high percentage of total investment and has to be managed carefully. The yearly call capacity plays an important role too because low capacity increases cost per contact and can damage our profitability.
How to further optimize your commercial results in a Multichannel era?
The Multichannel approach can have a substantial impact on the final Sales Force sizing and Structure. It is now possible to calculate the combined impact of orchestrated channels and the possibility to compensate or augment face-to-face contacts with other channel interactions (Webinars, Approved e-mails, CME virtual meetings, etc.). With Sales Force costs typically much higher than contacts in digital channels, this approach can bring savings and efficiencies in the planning of resource allocation.
For Sales Force sizing is important to take into account every preferred channel should be used in contacting our customers. In Pharma today, we use more channels to approach customers, meaning no one channel is completely responsible for all sales. It is the combination of channels we must consider.
Still, face-to-face visits will very probably remain the preferred way to approach customers in many countries, even at a higher cost per contact. But personal contact could be followed by approved e-mails invitation to a Round Table or Webinar and by Remote eDetailing, especially in geographically challenging areas. The visit equivalent should be used as a very good way to measure the impact of promotion compared to 1 face-to-face visit. This measure and compares the influence of other channels with one face-to-face visit and, together with the cost of the interaction, can be used for the calculation of commercial returns for all channels in a tested scenario.
The orchestration of Multichannel activities opens a huge opportunity for an optimized approach to access our customers using their preferred channels. As discussed, it also has a direct impact on Sizing and Structure of sales teams and requires the adoption of new skills to plan and allocate resources across channels in the most efficient and effective manner.
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The Actando Consulting Team