Pharmaceutical SFE Metrics: * Are You Measuring The Wrong Things? (mini)

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Information about Pharmaceutical SFE Metrics: * Are You Measuring The Wrong Things? (mini)
Sales

Published on September 30, 2014

Author: EULARIS

Source: slideshare.net

Description

With the ever-increasing pressure to ensure maximum return on investment, Sales Force Effectiveness is becoming a high priority area. A Sales Force represents the largest spend in sales and marketing and is second only to Research and Development within the whole of a company. Yet, similar to R & D, study after study shows that the returns gained from this spend are not particularly strong.

Research by Novartis shows, despite the fact that the top 40 Pharmaceutical companies in the US doubled their investment in Sales Force over the past 5 years, prescriptions only rose by 15% in the corresponding time period. Research by IBM concurred with this result and found that every dollar spent on Sales Force generates just $10.30 in sales. This represents a 22% drop in return since 1996.

Generally, there has been an industry-wide decrease in productivity per Sales Representative, down 24% since 1996. In addition, the Sales Representatives that are hired are low in age, output and skill. Reps face a highly competitive field, with recent figures showing a field of 90,000 Reps competing for 650,000 Physicians - only 125,000 of whom are top tier prospects. A rapidly expanding Sales Force with rapidly decreasing productivity results in an approximate 18% turnover each year.

Fortunately, the concept that ‘size sells’ is largely beginning to be abandoned across the Pharmaceutical Industry. Many Sales Managers are turning their attention to increasing the effectiveness of the Sales Force, rather than the size.

In this report, we examine Sales Force Effectiveness in the Pharmaceutical Industry. We analyze current metrics and their limitations, in focus and in measuring Sales Force Effectiveness, for the Pharmaceutical Industry. Then we discuss appropriate metrics to solve these problems, and demonstrate implementation methods and issues.

1. Pharmaceutical Sales Force Effectiveness Metrics: Are You Measuring The Wrong Things? Discover how to accelerate your business © Copyright 2014 Eularis All rights reserved. No part of this report may be reprinted or reproduced or utilized in any form or by any electronic, mechanical or other means, known now or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission from the publishers. While every effort has been made to ensure the accuracy and integrity of material presented, no responsibility or liability can be accepted by the publisher for its completeness or accuracy. The views expressed in this report are not necessarily those of the publisher. For the full report, please visit: www.eularis.com or email contact@eularis.com

2. Eularis ©2014 www.eularis.com Executive Summary 2 With the ever increasing pressure to ensure maximum return on investment, sales force effectiveness (SFE) is becoming a high priority area in the global Pharmaceutical industry

3. Eularis ©2014 www.eularis.com With the ever-increasing pressure to ensure maximum return on investment, Sales Force Effectiveness is becoming a high priority area. A Sales Force represents the largest spend in sales and marketing and is second only to Research and Development within the whole of a company. Yet, similar to R & D, study after study shows that the returns gained from this spend are not particularly strong. Research by Novartis shows, despite the fact that the top 40 Pharmaceutical companies in the US doubled their investment in Sales Force over the past 5 years, prescriptions only rose by 15% in the corresponding time period. Research by IBM concurred with this result and found that every dollar spent on Sales Force generates just $10.30 in sales. This represents a 22% drop in return since 1996. Generally, there has been an industry-wide decrease in productivity per Sales Representative, down 24% since 1996. In addition, the Sales Representatives that are hired are low in age, output and skill. Reps face a highly competitive field, with recent figures showing a field of 90,000 Reps competing for 650,000 Physicians - only 125,000 of whom are top tier prospects. A rapidly expanding Sales Force with rapidly decreasing productivity results in an approximate 18% turnover each year. Fortunately, the concept that ‘size sells’ is largely beginning to be abandoned across the Pharmaceutical Industry. Many Sales Managers are turning their attention to increasing the effectiveness of the Sales Force, rather than the size. In this report, we examine Sales Force Effectiveness in the Pharmaceutical Industry. We analyze current metrics and their limitations, in focus and in measuring Sales Force Effectiveness, for the Pharmaceutical Industry. Then we discuss appropriate metrics to solve these problems, and demonstrate implementation methods and issues. 3 Executive Summary Sales force represents the largest spend in sales and marketing and yet study after study shows that the returns gained from this spend is not particularly strong For the full report, please visit: www.eularis.com or email us at contact@eularis.com

4. Eularis ©2014 www.eularis.com 4 Sales productivity has taken a nosedive in recent years Problems With The Status Quo

5. Eularis ©2014 www.eularis.com Sales Pharmaceutical Industry finds itself in a world today with distressing realities: The dramatic increase in Sales Reps since 1997 has led to younger, less experienced, Sales Forces. Pharmaceutical companies have ramped up their innovation and time to market. In the 1970’s, the period without competition for a certain therapy lasted an average of 7 years. Today, this time without competition only lasts 0.1 years. Increases in targeting technologies in the United States have allowed Reps to call upon those Physicians with strong market volume potential. But everyone has the same targeting data. These Physicians are receiving so many detail calls, they’re saturated and unable to find time for quality calls with the Reps. Access to Physicians is decreasing. Many Physicians have closed their doors to Sales Reps completely and turn to eDetailing, peer-to-peer interaction and journals for information. The number of personal details received by office-based US Physicians in the US declined by 13% in 2005 following 7 years of increases. On top of this, Physician attitudes around Pharmaceutical Sales Forces are also changing. Where previously they may have welcomed new data and discussion with Sales Reps, now fewer than 40% of Physicians feel the Pharmaceutical Industry is trustworthy. Lastly, the number of follow-up actions required or requested as a result of each sales call and promotional activity translates into 10,000 follow up actions per working day, and many companies do not have the resources to capitalize on all the leads they create. Despite this very real situation of declining Pharmaceutical Industry power, the same old metrics are being used, metrics that are inappropriate and insufficient for today’s realities. Consider one of the most common methods of measuring Sales Force Effectiveness, the frequency of calls made by Sales Reps to target Physicians. The underlying assumption is one that does not hold up in today’s environment: higher numbers of sales calls will equate greater product sales. 5 Problems With The Status Quo ‘Put enough bodies in the field and something’s bound to happen!’ - an extremely inefficient and costly way to do business For the full report, please visit: www.eularis.com or email us at contact@eularis.com

6. Eularis ©2014 www.eularis.com One of the lures of the frequency of calls metric is the ease in use. Such data is relatively easy to collect and can be measured directly against sales and market share data. Unfortunately, there are a number of problems with this sort of metric: Focus on call frequency could encourage inappropriate or non-optimal behavior in sales staff. Irrelevant calls to non-target Physicians or non- prescribing staff, while doing nothing to further the company’s goals and sales, can still be counted. Sales Reps may do well when it comes to bonus or yearly review time, but the company is pushed down the path of decreasing productivity. By focusing on sales call quantity, Reps are encouraged to make as many calls a day as they can to meet their targets. The focus becomes accessibility of Physicians rather than their value as a target. Focusing on sales call quantity necessarily means less focus on sales call quality. By focusing on sales call numbers, the company implies the only sales tool worth considering is the sales call. When it comes down to actual sales, this is often not the primary method of success. Sales call frequency measures encourage Sales Reps to focus on the calls at the expense of all else. This includes those activities that may assist the Sales Rep in the performance of their job. The majority of today’s Sales Reps need the education and experience. Metrics focused on sales call frequency ignore potential problems with marketing plans. Target lists are prone to change, so that any plans that include such target lists must be carefully managed to ensure they stay relevant. Sales call frequency numbers focus on a uniform strategy that doesn’t allow for customized marketing.8 Strategies built on a frequency quota don’t take into account that a different number of calls to different customer groups or segments may be needed to make sales and adopt a brand’s message. Similarly, prescribing opportunities are not uniform across customers. Absent from many sales-call-frequency-based measures of Sales Force Effectiveness is a consideration of the impact that the marketing message actually has on the customer. Logging sales calls is a fine method to ensure the Sales Reps are active. But is that all a company wants? Sales call metrics do not answer questions such as: Has the Physician actually understood the benefits offered to his or her patients by prescribing the particular product on offer? Is what is being offered relevant to the Physician’s practice? Does the product being offered answer a need or satisfy a goal of the Physician? Is there a benefit to the Physician’s practice or patients by prescribing the Pharmaceutical brand? Problems With The Status Quo For the full report, please visit: www.eularis.com or email us at contact@eularis.com

7. Eularis ©2014 www.eularis.com The Japanese Market -- Sales Force Effectiveness Issues 7 The need for improvement in Sales Force Effectiveness is profound

8. Eularis ©2014 www.eularis.com Japan contends with many of the same problems that the United States and Europe face when it comes to Sales Force Effectiveness. Japan has been an active participant in the “arms race”, throwing Sales Reps into the field in staggering numbers in order to drive product sales. Japan has inundated the field with Sales Forces. Today, there are more than 72,000 registered Representatives in Japan (including about 20,000 working for wholesalers) serving more than 260,000 Doctors. But, just as with Western countries, Japan has seen diminishing returns on this investment. The need for improvement in Sales Force Effectiveness is profound. IMS data shows that, on average, most of the targets identified by the typical Japanese Pharma Company are actually Doctors who should be non-targets. On average, 70% of resources are focused on the Physicians that make up the bottom 20% of the market potential. Additionally, 10% or more of targeted Doctors receive no attention, while 20% to 30% of calls may go to non-targeted Doctors. Until recently, companies in Japan had one Sales Force for an entire product line. This meant that Reps were responsible for an overwhelming number of products, as well as an impossible number of Doctors and departments within hospitals. Their messaging abilities may have been compromised as they lacked enough specific detail on an individual product to sell it effectively. Today, a growing number of companies are moving towards specialty-based Sales Forces. Reps now promote just a few products each, allowing them to develop their expertise on the product and more effectively impact prescribing behavior. This is a change welcomed by Physicians, who face better educated patients and government pressures. They need more specific information for their individual practice, therapeutic area and patients. 8 The Japanese Market -- Sales Force Effectiveness Issues Many industry analysts worry that, despite the issues, Japanese Pharma Sales Forces will be resistant to change For the full report, please visit: www.eularis.com or email us at contact@eularis.com

9. Eularis ©2014 www.eularis.com The Japanese Market -- Sales Force Effectiveness Issues In Japan, access is less of an issue than in Western Europe or the U.S. The average detail in Japan lasts 9 minutes, compared to an average 90 seconds or less in the U.S. However, this vast amount of time is not always spent on discussing the product. Instead, the Reps are talking about personal topics. When the topic does turn to the drug, Japanese Sales Reps don’t deliver. The messages they give are scattershot and unmemorable. Despite being responsible for a company’s entire product line, they may only mention one drug. Also, the Reps and their Managers struggle with determining the right frequency with which to target Doctors. The number of calls per year on a given Doctor ranges, for a typical company, anywhere from 2 to 200. Many industry analysts worry that, despite the issues, Japanese Pharma Sales Forces will be resistant to change. Those who have made changes, however, have remarked on the newfound understanding of company strategy among managers and Sales Reps and provide examples for the rest of the industry. Once moving past being overwhelmed, companies that have selected a Sales Force Effectiveness model right for them have been eager to implement. They found that jump-starting and prioritizing Sales Force Effectiveness initiatives has had big impact. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

10. Eularis ©2014 www.eularis.com The Right Metrics To Solve The Problems 10 Today’s Pharmaceutical marketplace is extremely competitive

11. Eularis ©2014 www.eularis.com Current metrics are more focused on efficiencies rather than effectiveness. A better tool to measure financial impact is an imperative for this very significant budget allocation. Let’s examine this distinction in more detail: Sales efficiencies include things such as procedures, calls per day, minutes per call, cost per detail, cost per minute and so on. Sales effectiveness is focused on productivity, looking at the impact of behavior on prescribing, impact of each interaction, content requirements of interactions for improved financial return, and so on. There is a very big difference, and this difference seems to be the heart of the Pharmaceutical productivity problem. While the industry has described their metrics and analytics as effectiveness, they are actually focusing on efficiencies. The direction from here is clear: companies need to refocus on effectiveness. They must measure actual effectiveness instead of efficiency to ensure they are delivering the right messages, to the right target audiences, with the appropriate influencing behaviors. Better metrics can lead directly to better performance and productivity. By focusing on effectiveness rather than efficiency, Reps are encouraged to target their efforts more, leading to more appropriate messaging and more relevant marketing. Physicians are much more likely to respond with prescriptions when the message is tailored to their needs, their practices and their patients. To get support for this shift, objective evidence-based analytics are needed so that the company understands the need for change. This evidence needs to be collected regularly to ensure approaches are adapted for the changing environment as well. An optimized Sales Force, then, will drive company productivity. Reps will be pushed to succeed by knowing the areas in which they excel and need work. They’ll have support with appropriate goals and Physician targets. They’ll contribute directly to company sales by increasing product usage. Also, they’ll justify their own existence, with metrics that show sales management and upper echelon management their significant return on investment. 11 The Right Metrics To Solve The Problems The environment around big Pharma is becoming increasingly hostile from multiple viewpoints: patients, physicians, regulatory agencies, reimbursement, and competitors and generic competitors For the full report, please visit: www.eularis.com or email us at contact@eularis.com

12. Eularis ©2014 www.eularis.com Implementation Issues 12 Better metrics will more accurately determine sales force effectiveness

13. Eularis ©2014 www.eularis.com Instituting better metrics is a crucial part of an overall effort to increase Sales Force Effectiveness. But... where to start? Understand what’s happening. What is going on with your Sales Reps? How are they measured? How are they performing? Make the distinction between efficiency and effectiveness. Are you measuring how many activities your Reps are involved in, or are you measuring what kinds of activities they do? Are you encouraging busy work or actual productivity? Use metrics that actually measure effectiveness as well as efficiencies. Effectiveness metrics focus on a range of behaviors, all designed to get a clear picture of how Sales Rep activity leads to business. Adopt more sophisticated analytics tools that take into account all relevant variables. Understanding the current situation, the first step in instituting better metrics is key in increasing Sales Force Effectiveness and productivity. Easier said than done, of course. How does a company successfully assess the current system in order to determine what changes are needed and how overhaul should occur? Successful SFE initiatives share one aspect in common: they use cross-functional teams to conduct company effectiveness assessments. This team includes a wide range of team members across Marketing, Training, Analysis, IT, Human Resources, Finance and Sales, including Sales Representatives, Sales Managers, Sales Trainers, Product Marketers and Sales Analysts. This ensures a wide range of experiences and expertise, valuable in identifying opportunities and developing creative solutions. This cross-functional team should be established with a common, well-defined objective and charter: identify organizational strengths that can be leveraged to boost sales, identify and improve organizational weaknesses, and pinpoint best practices to standardize throughout the company. 13 Implementation Issues Instituting better metrics is a crucial part of an overall effort to increase sales force effectiveness For the full report, please visit: www.eularis.com or email us at contact@eularis.com

14. Eularis ©2014 www.eularis.com Implementation Issues First step: diagnose current Sales Forces processes, strategies and effectiveness. A three-pronged approach can be utilized: An initial diagnostic phase with Sales Representative surveys. This phase can be completed very quickly with methods like Web-based surveys that are convenient and anonymous. Meanwhile, the team participates in field travel. All team members should be in the field observing “a day in the life of a rep”. For many cross-functional team members who have not had recent field experience, this could be a crucial reality check that will help the assessment process. This also provides the team common experiences from which to draw insight. The field travel should be structured for a broad assessment, observing calls, interviewing Reps between calls, and gaining an understanding of territory and account planning. After survey analysis and field travel, the team should meet to debrief. Members can begin to pinpoint potential root causes of existing issues and develop a data analysis plan. Within two weeks, the team should meet again. After analyzing all the diagnostic data, team members can gauge their hypotheses on root causes. It’s crucial to work through this process carefully – solutions that solve the wrong problems only waste time and funds. Once the problems are diagnosed, the team can begin developing solutions to address them. The key to developing effective solutions to productivity issues is providing enough detail for successful implementation. Now – what about buy-in? Pharmaceutical companies are large entities. Inherently, any large organization will be resistant to widespread change. It can be a painful process, incurring expenses, time and employee resentment. A major challenge, then, of implementing better metrics and analytics to measure Sales Force Effectiveness will be motivating management and employees. Somehow, companies must communicate to workers (and particularly Sales Reps) how changes will improve not only the company bottom line, but also their day-to-day work lives. The goal is to install new habits and break these old, ineffective ones. Employees only behave a certain way if they’re being rewarded for doing so. Metrics focusing on efficiency rather than effectiveness reinforce these behaviors. Knowing this, altering reinforcement can effect quick and lasting change. One good way to do this through positive reinforcement is compensation and benefits. Consider bonus schemes. Well designed and implemented plans can be a powerful motivation to change Rep behavior. Successful bonus schemes stimulate the exact behaviors envisaged and maximize motivation. With this kind of behavior reinforcement, self-interest and the company interest can become one. The Rep is guided by two motivations that are rewarded properly with bonuses: realistically ambitious targets and sales maximization. Another method of positive reinforcement to change Rep behavior is management support. Team leaders should be used as a key tool in implementing change. They should motivate their Reps by supporting and reinforcing these changes every day, every week, every quarter. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

15. Eularis ©2014 www.eularis.com Where Does ‘e’ Fit In? – The Role Of eDetailing 15 eDetailing can provide Physicians with a more convenient means of getting information they want at a time that suits them

16. Eularis ©2014 www.eularis.com One key aspect of instituting new metrics and objectively viewing current methods is rethinking some of those methods. The central focus of our Sales Force, detailing directly to the Doctor, serves an important purpose. Physicians want and need information from the Sales Representatives. However, increasingly, Physicians want it on their own time and their own terms. eDetailing can potentially provide Physicians with a more convenient means of getting the information they want at a time that suits them. The use of the Internet to promote Pharmaceutical products to the Medical Professional is being tested or used by all of the top Pharmaceutical companies in the U.S. and many in Europe. Aside from overall development of the Internet in everyday life, there are three direct drivers behind the growth of eDetailing: Falling effectiveness and increasing costs of Sales Representatives Increasingly busy Doctors with little time to see Reps High connectivity and acceptance of the Internet by Physicians In Forrester’s 2003 Techno-Graphics Benchmark Study, data suggested significant differences between Physicians and the general population when it came to technology adoption. Physicians are more likely to go online at least once per month, are more likely to use mobile phones and PDA’s, and are more likely to have Broadband Internet access. 16 Where Does ‘e’ Fit In? -- The Role Of eDetailing Data suggests significant differences between Physicians and the general population when it came to technology adoption For the full report, please visit: www.eularis.com or email us at contact@eularis.com

17. Eularis ©2014 www.eularis.com Where Does ‘e’ Fit In? -- The Role Of eDetailing There are, potentially, a myriad of benefits from an eDetailing program. A properly executed eDetailing system can: Expose Physicians to powerful promotional and educational messages Guide the way for Sales Force access through Sales Rep and sample requests Reach large numbers of customers quickly Provide feedback to Reps and the marketing team on a Physician-specific level Be cost-effective Enhance relationships with Healthcare Professionals via timely, convenient and targeted content There is still some resistance to eDetailing within the industry. This resistance may be justified as Physicians want more than simply static sites that provide convenient information, but not much else. To take full advantage of what eDetailing can offer, the program must do a few key things: Go beyond printed materials. A site that simply regurgitates the information found on brochures or other printed marketing aids does nothing to entice Physicians. Offer opt-in eNewsletters, embedded market research, opportunities for samples and other interactive features. Include more than a sales pitch. eDetailing should work in conjunction with a Sales Rep to establish a relationship with Physicians, educating them on the brand and the various programs. Encourage viral activities, meaning enticement for Physicians to send this information to their colleagues. Measure the results. Determining whether or not eDetailing is appropriate for a specific country or product is a key issue that must be considered prior to developing or buying eDetailing capabilities. Factors affecting whether to initiate eDetailing as well as which form of eDetailing to use will include drug stage in drug lifecycle, and segmentation of Physician prescribing patterns. Returning to our discussion on metrics, any implementation of a system needs to be judged by bottom-line improvement. In the case of eDetailing, this probably means increasing the numbers of prescriptions written or substantially reducing costs of a sales and marketing operations. It is usual business practice to calculate the ‘return on investment’ on software investment, and an eDetailing system should be no different. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

18. Eularis ©2014 www.eularis.com Where Does ‘e’ Fit In? -- The Role Of eDetailing When calculating ROI, it is important to ascertain which products are most suitable (this could depend on the product spot in its lifecycle), which Physicians should be chosen to participate, the format of eDetailing, and which markets to pilot in first. Other areas to consider are which metrics to use to measure the ROI, how these metrics are used and who will calculate the ROI. The metrics used in calculating ROI are directly related to the objectives initially set (as with any business planning process). The metrics most commonly used are: Length of detail Number of details per day Effectiveness of each detail Cost per detail Number of increased prescriptions New prescription market share increase eDetailing, when planned and implemented effectively, engages the Physician, encourages repeat visits, and allows the Sales Representative to be more productive. Productivity increases are in terms of more effective sales calls each day (virtually and face-to-face), decreased costs, and potentially increased sales. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

19. Eularis ©2014 www.eularis.com Results Analysis 19 After developing and implementing a new plan to measure sales force effectiveness, analysis becomes crucial

20. Eularis ©2014 www.eularis.com After developing and implementing a new plan to measure Sales Force Effectiveness, analysis becomes crucial. To do this well, companies need to have an in-depth understanding of all the interplays among messages, Sales Force activity and promotional activity. They need to see how the competitors’ activities impact them. Analytics provides a complete view of the Sales Force efforts in terms of multiple definitions of effectiveness. Eularis uses an analytics system that helps track Sales Force productivity, marketing messages, competitor activity, and all aspects of the big picture, to provide insight into brand performance. The type of analytics discussed provides a key way to tease out these constituent areas and translate these into strategies that fit together and provide a seamless loop between both sales and marketing for optimal results. CASE STUDY 1 A Primary Care brand was in a crowded marketplace at a decent market share. They were growing well until the last two years. The brand team regularly commissioned a number of primary market research studies, including Detail Follow-ups (DFU’s), to understand how the detailing was influencing the Doctor perceptions of the product, and how the Sales Force was performing. They had data on message recall and on share of voice, and knew they were performing at the same level as key competitors in this regard. Using this data, they had formulated some changes, but the results remained the same. The team commissioned ‘Intent to Prescribe’ research to uncover the Physicians’ intent following the changes implemented. Physicians said they intended to prescribe more of this brand but sales stayed static. Undeterred by failure to impact a change, the team searched for other methods to measure performance and uncover real influencers that would have more actionable recommendations. 20 Results Analysis Analytics provides a complete view of the sales force efforts in terms of multiple definitions of effectiveness For the full report, please visit: www.eularis.com or email us at contact@eularis.com

21. Eularis ©2014 www.eularis.com Results Analysis The team turned to the Eularis Analytics System. They were eager to know: How effective are our Reps in delivering key messages? Is our key message differentiated enough against competitors? How effective are our messages? Should these be changed? Which of our messages provides the most influence on changing actual prescribing behavior? Are our sales materials providing the appropriate messages for most influence on prescribing? Are our sales materials providing the best use of the messages? Is our call frequency appropriate or should it be changed? How much market share is our detailing getting us compared with our promotional activities? How should the focus of the detail call be broken down? What activities should we be teaching the Reps to be able to do better? We know our share of voice is the same as our key competitors but what are they doing differently to our Sales Force? The Eularis Analytics System was implemented and the picture of this brand can be seen in the next figure. This shows that the field force activity was just supporting the current market share of 24.7%. However, continuing these efforts would not be effective in growing the market share despite the results of the ‘Intent to Prescribe’ research. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

22. Eularis ©2014 www.eularis.com Results Analysis When looking at the overall analytics for the brand it can be seen that, although the Product messages were reasonably well entrenched from all the previous good work, the Promotional Effort was now lagging behind key Product messages it had previously established. This means that the brand could defend its current market share but not necessarily get more market share from its budget if the company continued doing what they were doing. Recommendations around message focus and focus within the detail call were made. For example, Question 9, around how should the detail call be broken down, is shown graphically below. The recommendations around messages, Rep Activity, Detail Aids, were followed and the results for the brand 6 months later can be seen in the following figure. The market share had increased by 2.6% but, more importantly now, the field force could be clearly seen to be having a real impact on market share results. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

23. Eularis ©2014 www.eularis.com Results Analysis CASE STUDY 2 AstraZeneca was not performing well in market confidence rankings nor sales potential when it commissioned our analysis. The CEO desired a tool that could pinpoint where to improve and what was required to improve. The first step was in-depth research done with target Doctors. AstraZeneca’s confidence ratings were down relative to its key competitors by target Doctors in all areas researched. This was a significant drain, inhibiting the growth and performance of the company. After examining this data on competitor product sentiment, AstraZeneca decided that the best focus area to improve initially was its Sales Force and Marketing effort. As shown in the next figure, AstraZeneca’s confidence ratings were weaker than market share in almost all areas, including Trust in Company and Trust in Products. Among Future Prospects and Reps, sentiment was also weak, and marketing Communications were not helping. Sales Force improvements addressed the specific weaknesses identified, with the help of Eularis’ data, showing precise areas where Sales Force was stumbling. Client’s solutions included a five-phase training program addressing: Anatomy, physiology, pathology and pharmacology, using CBT Product-based information (own and competitors’) Selling skills, with a strong focus on micro-marketing initiatives Commercial training, allowing the sales management team to manage the growth in their respective areas Differentiators (time management, presentation skills, NLP, social styles) Solutions also included the addition of checks and balances to the Rep training, and the initiation of a creative incentive scheme which rewarded both individual and team performance. After these steps, AstraZeneca then moved on to look at other weak areas identified by Eularis’ analysis. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

24. Eularis ©2014 www.eularis.com Results Analysis After another year, things were improving dramatically. The result was visible improvement in sales and market share. The perception around the brands increased radically: The uptake of the marketing message was far better received. The market was serviced according to expectation. The confidence within the company grew. The company started to attract the industry’s best. Two years later, sentiment was still improving. Four years after Eularis’ first analysis, AstraZeneca was a major player in the market. AstraZeneca recognized the role Eularis’ data played in vastly improving their position. They were a company who had not realized its full potential, unaware of key drivers and underlying sentiments of customers. This lack of knowledge was preventing growth and increased market presence. For the full report, please visit: www.eularis.com or email us at contact@eularis.com

25. Eularis ©2014 www.eularis.com Ongoing Monitoring 25 Raising the level of sales force effectiveness requires sustained commitment and effort

26. Eularis ©2014 www.eularis.com Raising the level of Sales Force Effectiveness requires sustained commitment and effort. After assessing the current situation, determining a new metrics and analytics strategy to measure Sales Force Effectiveness, and negotiating the land mines of implementation issues, it’s tempting to declare success and move on. Many otherwise successful Sales Force Effectiveness initiatives will fail, and have failed because of neglect of the final, ongoing step. Managers must fully implement an effective measurement and monitoring process. Systematically and effectively measuring and monitoring key selling activities significantly improves sales results. One component that must be continually monitored, long after initial implementation of new metrics, is the appropriateness and effectiveness of sales messages. Reps and marketing materials can’t work if their messages aren’t targeted and bringing in business. Measuring message quality is essential to ensure that Sales Reps are appropriately executing product positioning strategy. Pharmaceutical firms often research Physician recall of key product messages and make the assumption that if recall is high, yet sales lag, the marketing strategy may be fl awed; if recall is low, management should implement message analytics and improve their strategy to include messages that drive prescribing. Most Pharmaceutical companies measure the ROI for key marketing programs but then don’t measure the ROI on Sales Force execution. One result of this is that Pharmaceutical companies can wrongly attribute a low ROI to poor program design rather than poor sales execution. Despite the fact that many marketing programs are designed for a specific target audience, many Sales Forces take a random approach to implementing programs, offering them to any Doctor who will agree to participate. Sales teams often determine whether a brand will flourish or flounder. By correlating key activities with results, Sales Managers can determine those factors that drive success and manage behavior to improve outcomes. Pharmaceutical firms that effectively track and improve key sales activities will significantly outperform firms that focus solely on results. 26 Ongoing Monitoring Managers must fully implement an effective measurement and monitoring process For the full report, please visit: www.eularis.com or email us at contact@eularis.com

27. Eularis ©2014 www.eularis.com Conclusion 27 The good news is that Pharmaceutical companies can improve their sales productivity

28. Eularis ©2014 www.eularis.com The current state of Sales Force Effectiveness is not pretty. The good news is that Pharmaceutical companies can improve their sales productivity. They can boost Sales Force Effectiveness without resorting to hiring more Sales Reps. Focusing metrics on key drivers such as those listed above do work. Leading companies have demonstrated that quick and significant sales gains can be won with reorganization of sales metrics and efforts. Improving Sales Force Effectiveness may seem overwhelming, but the potential for reward is staggering. Best-in-class companies have seen their efforts pay for themselves with improved top-line growth, and continue to post sales increases while others in the industry are facing struggles. For those companies that choose to take on the dynamic and ongoing process of improving Sales Force Effectiveness through better metrics and improved behaviors, the market is there for the taking. 28 Conclusion For the full report, please visit: www.eularis.com or email contact@eularis.com

29. Eularis ©2014 www.eularis.com The World Trade Center Leutschenbachstrasse 95 8050 Zürich Switzerland Tel: +41 (0)44 308 39 86 Fax: +41 (0)44 732 67 52 Email: europe@eularis.com Contacts Kamiyacho MT 14th Floor 4-3-20 Toranomon Minato-ku 105-0001 Tokyo Japan Tel: +81-3-54043585 Fax: +81-3-44966445 Email: japan@eularis.com Eularis Europe Eularis Japan 12/F Shui On Plaza 333 Huai Hai Zhong Road Shanghai, 200021 China Tel: +86 (021) 5116 0767 Fax: +86 (021) 5116 0555 Email: china@eularis.com Eularis China Unit 10-18, 32 Floor Tower 1, Millennium City 1 388 Kwun Tong Road Kwun Tong, Kowloon Hong Kong Tel: +852 2824 8071 Fax: +852 3010 0811 Email: china@eularis.com Eularis Hong Kong 415 Madison Avenue 14th Floor NY10017 New York USA Tel: +1 646 673 8408 Fax: +1 917 591 7502 Email: us@eularis.com Eularis North America

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