The pharmaceutical industry is in the midst of a significant transformation at present, driven by technological advances, changes in consumer behaviour and expectations, geopolitical uncertainty, the urbanisation of emerging economies and a range of additional factors. As a result, organisations are investing in change.
Perhaps most notably, buyer dynamics have shifted. Indeed, according to the findings of CSO Insights, the research arm of Miller Heiman Group, 74.6 percent of sellers believe customers’ expectations are increasing. Furthermore, buyer engagement is decreasing and more decision makers are now involved in the typical buying process.
Pharma customers are also more informed than in the past, largely thanks to the internet and social media, which allow them to consume much more targeted and relevant content. The internet also provides customers and potential customers with access to a global marketplace, meaning businesses must do more to generate genuine, long-term loyalty.
CSO Insights has carried out in-depth research into the performance of pharmaceutical companies and their adoption of sales best practices. Interestingly, our research division found that pharma businesses are performing above the average sales organisation when it comes to implementing personalised performance improvement plans.
With that being said, pharma companies are also performing below average in a number of key process and relationship practices, such as continually assessing why top performers are successful, articulating solutions that are aligned to the needs of customers, and delivering consistently positive experiences across all buyer channels.
I recently gave a presentation at the Eye for Pharma event, providing insight into how organisations in this industry can optimise business results. Over the course of this two-part feature, I will take a detailed look at four key steps on the road towards business optimisation which were covered during the presentation.
1. Value Engineer
In the modern sales industry, it is no longer sufficient for organisations to simply learn about customer needs or issues, and then provide them with solutions through products or services. While those practices remain at the core of sales, success now depends on organisations providing additional value during the sales process.
Research from CSO Insights shows that just 43 percent of sales organisations say their salespeople consistently and effectively communicate appropriate value messages, which are aligned to customer needs. In the health care industry, this figure is also exactly 43 percent. Yet, among world-class organisations, it reaches 97 percent.
Such research highlights the importance in delivering value, but what does being a value engineer actually mean, especially within the pharmaceuticals industry? The main component is providing perspective for the customer during the various different stages of the sales process.
In the pharmaceuticals industry, this means learning about your customer and their situation, serving as an expert in your particular field, and connecting your expertise to their concepts, so that the insight you provide is relevant. This may require a complete sales transformation and a re-vamp of your sales training and coaching strategy.
For sales organisations, in general, the three main areas where salespeople can add value are: by providing analytical support, by providing genuinely helpful insight, and by providing relevant, useful content to customers. In all cases, the key is putting the customer at the very heart of any sales strategy.
In the current sales environment, pharmaceutical companies must compete based on more than simply product and price. They must also not mistake ‘value’ for ‘price’. In actual fact, when we talk about ‘value’, we are talking about adding value to the entire relationship, so that the business itself becomes valuable to the customer.
To provide an example, sales training can be used to teach and emphasise the importance of social selling. Put simply, this is where social media is leveraged to share useful content, have meaningful interactions with customers and develop relationships that go deeper than the basic relationship between consumers and suppliers.
One of the key findings of the CSO Insights Sales Best Practices Study was the fact that world-class organisations are two years ahead of average performers in terms of social selling. Despite making up just seven percent of the study’s participants, the world-class segment outperformed all others by 23 percent.
Value can also be delivered by helping customers to see problems in a different way, or by anticipating problems ahead of time and providing solutions to them. Ultimately, this will require training and coaching, in order to help salespeople to work in new ways, and it will also require collaboration between sales and marketing.
2. Digital Sales Enablement
The second step on the road to business optimisation revolves around digital sales enablement. This relates to the use of digital tools and technology to reduce the amount of repetitive or tedious tasks that need to be performed, to facilitate greater flexibility, and to provide analytical support throughout the sales process.
Sales enablement itself is concerned with improving the efficiency and effectiveness of the sales funnel. One way to think of enablement is the process of maximising the following equation:
(sales activity x quality of activity / time) / distractions = revenue.
At present, CSO Insights research suggests that almost 60 percent of companies in the pharmaceutical industry now have a sales force enablement function, compared to less than 20 percent back in 2013. Simply having an enablement function in place is enough to increase revenue plan attainment by more than eight percent, on average.
Digital enablement in pharmaceutical companies potentially covers a wide variety of different areas, including sales tools, content services, sales training and sales coaching. Enablement services should cater for frontline salespeople, as well as sales managers and other leaders, and should be aligned to the customer journey.
One of the most promising digital technologies is artificial intelligence and many organisations are already deploying it to reduce the amount of time salespeople spend on tedious activities, such as administrative tasks. This, in turn, frees them up to spend more time on what I call the ingenuity of sales, which is where they really earn their money.
According to findings published by Salesforce Research, the typical salesperson currently spends 64 percent of their time on non-selling activities, and just 36 percent of their time actually meeting clients, connecting with prospects, making contact with customers and other direct sales activities.
Through the use of AI, many of the non-selling activities can be automated and the balance can be shifted towards selling activities instead, resulting in more high-quality conversations and, hopefully, more sales revenue.
The other major digital revelation to be aware of is the role of data collection, particularly in relation to sales behaviour. Moving forward, pharmaceutical companies will have the ability to capture behavioural data, analyse it, learn from it and shape coaching activities around the lessons that are learned.
As a result, coaching can be much more targeted, with sales managers using technology like voice recognition, in order to gain true insight into sales conversations and the gaps that exist in those conversations. So, for instance, if a pharmaceutical company has developed a successful approach to sales, and this software identifies that a salesperson is not adhering to that approach, managers can identify that problem and address it quickly.
This kind of personalised, data-driven coaching is then much more likely to achieve results in terms of changing sales behaviours and encouraging staff to utilise best practices to optimise sales results.
The pharmaceutical industry is undergoing a period of significant transformation and organisations must move with the times if they wish to optimise results. In particular, it is imperative that pharma companies focus on adding value to the entire customer journey, and that they make use of digital technology to enable sales reps.
In the second and final part of this article, I will discuss two additional steps towards business optimisation: next generation talent, where I will highlight the type of analytical thinking and problem solving abilities required for success, and process maturity, where I will look at the importance of a consistent, defined methodology and the provision of clear guidelines.