Times They Are A-Changing? OpEd by John Mack
According to several recent reports, Pfizer Inc. may slash its 38,000-member sales and marketing staff by as much as 30%, or 11,400 employees.
Although Pfizer has pulled back from a threat to lay off a large number of employees, any number of reasons could be cited for cutting back the sales forces of most major pharma companies — blockbusters going off patent/generic competition, collapsing sales due to product withdrawal, etc. — but the most intriguing reason may be just plain salesforce inefficiency.
Declining sales force productivity has been a major issue on the minds of sales managers and corporate executives of pharmaceutical companies large and small for quite some time (see, for example, Finding the “Right Stuff” to Revitalize Sales Productivity). Meanwhile, more and more physicians are limiting face time and closing their doors to sales reps.
One PMN subscriber suggested an air traffic control analogy: “We all see the problem every time we visit our doctor-looks like Friday night at O’Hare with all the reps circling.”
Perhaps the time has come to reassess the pharma sales process and place greater attention on the quality of the physician-rep relationship rather than on quantity-based traditional representative activity metrics such as number of calls per day (see, for example, “A Crisis in Professional Detailing“).
A myth long believed at pharma companies — as well as at other companies — is that by hiring more salespeople you can proportionately increase sales without limit. Want to double sales? Hire twice as many sales people.
Unfortunately, it doesn’t work. Everyone knows that pharma sales reps are less effective than they used to be. The increase in the number of sales calls is not proportionate to the increase in number of sales reps. Although the pharmaceutical sales force has doubled between 1995 and 2000, the number of audited calls has only increased by 10%. Realistically, reps average only 2 quality details per day (quality details includes discussion of features, benefits, and data). The reps have less time per call, are only able to deliver incomplete messages, and aren’t able to really differentiate their product from the competition’s.
For a time, sales force automation may have masked the problem, but now even the use of technology cannot compensate for the bloat. When times were good-lots of patent-protected blockbuster drugs, no backlash against drug prices and pharma industry profits-it did not matter how inefficient the sales force was.
Now that market forces are starting to turn negative, have we reached a point where the bloat (inefficiency) is unsustainable? Or are threats of layoffs just a ploy to sustain stock market value?
See also the following Pharma Marketing Blog posts:
- Time for Pharma to Revamp Its Physician Marketing Strategy
- Pharma Sales Force Bloat and the Mythical Man-Month
- Pfizer to Slash 30% of its Sales & Marketing Staff
Vol. 4, No.2: February 2005
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