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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

Death of a salesman

Will people communicate the same way if their results are not being measured?
Salesman

In the wake of the China-bribery scandal, GlaxoSmithKline announced some weeks ago that they would do away with sales targets for their sales representatives. Instead, they plan to replace the traditional sales target with a system that rewards “technical knowledge, the quality of the service they deliver to support improved patient care and the overall performance of GSK's business”. 

Very good, but I have a concern with the last part of this statement - don't you? If GSK continues to link compensation to the overall performance of its business, isn't this just one giant sales target for everyone in the company to hit? Look, the truth is that compensation in any aspect of healthcare is contentious for obvious reasons.

On the provider side we debate and struggle with whether doctors are best paid by a fee-for-service, salary or capitation model. What 'signals' do we send to doctors and patients when we set up a system that rewards quantity over quality? Or a system that rewards the treatment of younger and healthier patients over the elderly and chronically ill and does not explicitly take risk-adjustment into account? And just how exactly does one measure 'technical knowledge'? Will sales representatives be routinely tested on disease state, pharmacokinetics, mechanism of action and other such elements of their promoted brands? What link does technical knowledge have with continued training provided by GSK? Or is there a link? Quality of service to support improved patient care is a noble metric, but how is it measured - what components constitute quality? And who measures it - your manager? the doctor? the patient? 

You'll pardon the cynicism I hope because it's well intentioned and because we need to play the role of devil's advocate in this debate. Not because the elimination of sales targets is not a good idea but because it can't be just a good idea. This needs to become a great idea and the 'gold standard' in the industry. Surely, some compensation expert working in conjunction with GSK's HR department will figure this all out (we think). 

Some of us believe that this needed to happen years ago. Many of us know that media reports of questionable sales practices can't all have been wrong. Manufacturers have paid fines, public outrage has waxed and waned and lawmakers have threatened to 'lower the hammer'. Despite all of this, the industry has trucked along with very little urgency around revamping its compensation model. Not so any more.

By moving away from sales targets GSK could actually help its business 

But two central questions remain around this recent GSK news: will everyone follow and will the transmission of knowledge between sales representative and clinician suffer? The first question is a relatively straightforward one. Because our industry self-regulates, there is no compulsion for any other manufacturer to follow suit. Until, that is, GSK turns this into a competitive advantage either with patients or clinicians (or both).

The irony is that by moving away from sales targets and focusing on the important things, GSK could actually help its business. The extent to which it is truly able to empower frontline employees to forget about the number and focus on the 'doing what's right', the more successful they will become. None of us are quite sure how exactly the commercial and finance leaders within GSK are going to drive revenue higher and sustain growth with new product launches without some sort of revenue metric that trickles down to the individual level but it shall be interesting to watch this unfold.

The second question is certainly more ambiguous and an area that few people have ventured in this sales compensation debate. Do people fundamentally alter the quality and quantity of information delivered depending on whether the results of their activities (ie sales) are being tracked at the individual level? It's easy to say that it will be 'business as usual' but when you have no sales targets to shoot for, does that extra call get made? Does the call that gets made get 'closed' or does it die a quick death as the sales representative meekly gives up at the first sign of resistance? And does the substance of the information remain the same? Do we actually communicate the same way when our results are not being measured? 

Maybe none of these questions matter. Maybe this will become the 'new normal'. Just as we adapted to other changes in our industry that impacted the representative-clinician relationship, like limits on samples and limits on how much we can spend on dinners. As Charly, the next door neighbour to Willy Loman in Arthur Miller's 1949 Pulitzer Prize winning play says: “The only thing you've got in this world is what you can sell.” And maybe that has always been part of the problem.

Article by
Rohit Khanna

president and managing director, Catalytic Health. He can be reached at rohit@catalytichealth.com

7th March 2014

From: Sales, Marketing

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