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Any company has many people specialized in their core skills are there, like financial people for financial decision, HR for staffing & dealing with manpower, a separate department for accounting, operations & manufacturing to running the operations smoothly. This thing reminds me a story about the five blind people who came upon an elephant for the first time. Each used his hands to “see” the beast, and saw very different things: The first person touched the leg and thought it was a tree trunk The second person grabbed the tail and thought it was a rope The third person felt the ear and thought it was a giant leaf The fourth person ran into the elephant’s side and thought they'd touched a wall The fifth person grabbed the trunk and was convinced he had a snake Moral of the story is “According to their perception they might be right but for excellence holistic view is necessary.” Everyone contributes in cycle; like financial people invests is different financial projects just by trading between risk & return, accounts people keeps a track of record that from where money comes and where the money goes, Operations people take care of the machine & man to be optimized in such a manner so that cost of the production can be reduced, HR managers are there to take care of people their needs as well their effectiveness. So every lever just work together so that they can produce a service according to demand of the market with minimum cost to the company so that they can not only fight competitively with the substitutes available in the market but will also be able to give the maximum profit to the shareholders or stakeholders. So the combined efforts are putted for wealth maximization. Marketing and especially sales force are the actually feeders for the company that not only sell the product but also bring the prosperous return which are the actual thing stakeholders are interested in. Sales force is something which is like a mother feeding any child to survive throughout his life. The sales forces is something which is to be motivated as well as well equipped with every tool which is required to do the sales. Their efficiency is something on which companies’ success depends, it does not mean that other department are not playing critical role but the whole concept of monetary gains or actual profit or money for any investment comes from the sweat & intellect of sales force.
Sales Management Model for any company is something which is very much necessary to be followed in a good manner.
Describing the personal Selling function
Defining the strategic role of the Sales function
Developing the Sales force
Directing the Sales force
Determining Sales for effectiveness & performance
Selling in pharmaceutical industry is incredibly competitive, in India only there are more than 30,000 Pharma companies are registered. Each year we see sales teams work to get more calls per day from their representatives, improve customer targeting and message delivery, implement CRM systems, and develop better programs for boosting the sales by influencing & creating a long term relationship with doctors. While all of these tactics have impact whether that impact is positive or negative, there are two traits successful SFE: Cross-functional teams: Utilizing a wide range of team members ensures that a wide range of experiences and expertise are brought to bear to identify opportunities and develop creative solutions. Continuous improvement process: Repeatedly cycling through the three phases of assessment, implementation and monitoring ensures that SFE improvement is an evolutionary, or "Kaizen", rather than a revolutionary, or Big Bang Process. Successful SFE initiatives start by building a cross-functional team with a common, well defined objective and charter. This team should be responsible for identifying and ranking
improvement opportunities and implementing change. A good cross-functional team would include sales representatives, sales managers, sales trainers, product marketers, and sales analysts, with support from finance and human resources. The first objective of this team is to fully assess current sales force processes, strategies, and effectiveness. A three-pronged approach utilizing field travel, diagnostic sales representative surveys, and data analysis will provide not only a balanced scorecard, but also insights useful for developing creative solutions. Three keys to successfully addressing these SFE opportunities: Forming effective teams Identifying the root causes of problems Developing detailed action plans to implement solutions
TRACK is most important in effecting change with a sales force. These are:
Team, Recognize emotional impact, Accelerate, Communicate and coach, Keep focused
Raising the level of sales force effectiveness requires sustained commitment and effort. Successful sales force effectiveness initiatives ultimately fail because managers don’t fully implement an effective measurement and monitoring process. In the pharmaceutical business, the ultimate measure of success is sales. Whether the metric is growth in total sales, new prescriptions, market share, or product switches, outcome measures are the best indication of success. But, just as patient mortality rates tell very little about the procedures that are most effective in healing people, sales figures alone don’t shed much insight on the behaviors and activities that drive sales success. To gain a broader understanding of sales performance, managers must effectively track and manage key behaviors and activities. Most pharmaceutical firms already track and manage sales activity. Unfortunately, the most commonly used measure – sales calls per day – is usually inappropriate and can often be counterproductive. By tracking calls per day, management often unintentionally encourages reps to visit easy-to-see, low-value doctors at the expense of the best target customers who are often harder to see with the desired frequency.
A more effective metric is the percentage of target customers seen with the desired frequency (or frequency goal). Figure below highlights several insights from this simple metric:
None of the sales districts in the example is achieving the desired frequency for all target customers
Calls per day performance is roughly equal for all districts, yet frequency attainment
on key customers varies widely District 3’s poor performance on frequency goal attainment and good performance on calls per day may indicate that the number of target customers exceeds sales capacity, or reps have substituted their own target list for management’s target list In this example, other factors being roughly equal, we would expect District 1 to significantly outperform the others because of its superior frequency attainment on key customers. Measuring the quality of the customer target list is an effective tool for improving market coverage and incremental sales. A simple targeting effectiveness metric that compares a sales force’s actual market value coverage to the best attainable market coverage given a particular reach of physicians. In this example, dropping lower-value doctors from the customer target list and adding higher potential doctors would significantly improve market coverage and incremental sales. We are familiar with the old adage “Pereto Principle” that 20% of customers account for 80% of sales. In reality, pharmaceutical market concentration varies considerably based on the therapeutic category and type of medical system. Even in the least concentrated markets, calling on the high-value physicians rather than average-value physicians can make a substantial difference in sales performance.
Consider two firms launching new products in the same therapeutic class. Each firm calls on 1,000 physicians. Firm A selects 1,000 average-value customers. Firm B selects 1,000 highvalue customers. In this case, let's assume that both firms have equally effective sales reps, and that both firms receive 15% of the total prescriptions written by the physicians they visit. Firm A-Average Targeting
Total Number of Prescribing Physicians 3,000
Firm B- Effective Targeting
Number of Prescribing Physicians Visited Weekly Rx's Written by Top 1,000 Prescribers Weekly Rx's Written by Physicians Visited Sales: 15% Share of Physicians Visited
1,000 25,000 13,000 1,950
1,000 25,000 22,500 3,375
Firm B's sales are 75% higher than Firm A. Although this example sounds extreme, it's not unusual. Sales forces that excel at targeting significantly outperform those that don't. Basic targeting begins by selecting doctors with the highest therapeutic class sales for the first line product. Focusing on these high-value physicians often means making tough decisions to drop low-value physicians from the target list even though they: Are easy to see Prescribe your products Are friends with the reps In most cases, as a firm retargets its customers, it will begin with its current target list (Figure A). It must then identify lower value physicians to remove from the target list and replace them with higher value physician sales organizations must implement a disciplined doctor profiling process in order to estimate each doctor's total therapeutic class potential for each key product. It's important that the profiling process focus on physician therapeutic class sales, not on firm product sales. Profiling doctors based on their usage of your firm's products often ignores the biggest opportunities to improve sales.
Third party sample prescribing data can substantially improve the profiling process. IMS and Close-Up, for example, collect sample prescribing data in European, Asian and Latin American markets. These samples typically range from 10% to 50% of relevant physician populations and can provide sales managers an important supplement to the profiling process. Ex. sample data may provide appropriate criteria for populating a target list. Let's imagine that a sales force has a goal of 30% reach on primary care physicians for an antibiotic. A sample of physicians in the market indicates that the top 30% of doctors each write at least 28 antibiotic prescriptions per week. Then, each rep's target list should include doctors prescribing at least 28 antibiotics per week and should exclude physicians writing less than 28 antibiotics per week. Similar criteria can also be derived through a disciplined profiling process, but some firms may view third-party data as more credible and less uncertain than rep-reported profile estimates. Multiple Criteria Targeting Once the location of the dartboard is known, firms can fill in concentric circles of declining size until they've identified the bull's-eye. Firms with more experienced sales forces can supplement quantitative targeting methods with qualitative profiling. For instance, a firm preparing to launch a new hypertensive (HT) product might profile doctors on their willingness to prescribe new products. The targeting process might begin by identifying doctors with the highest HT class potential. Then, the target list is revised. High potential doctors who aren't likely to prescribe new products are replaced by moderate potential doctors with a tendency to adopt new products quickly. This more complex targeting process requires outstanding sales training and coaching as well as effective coordination between marketing and sales functions. A more sophisticated targeting process adds additional qualitative targeting considerations. This process is typically used in markets like the US where robust physician-level data is available, but it can be successfully implemented in international markets with disciplined sales forces. Firms may adopt multiple criteria for targeting customers. In the case of our HT product, reps might also target physicians who are known to spread their prescriptions across many HT products or to heavily prescribe a distinctly inferior competitive product. International managers can utilize sample data to implement this process. Firms using a multiple-criteria targeting process often limit sales rep influence over the target list. This process requires excellent communication between sales and marketing as well as a high level of field force ability and discipline. Measuring message quality is critical to ensuring that reps are appropriately executing product positioning strategy. Firms commonly use third party market research to determine physician recall of key product messages. If recall is high yet sales lag, the marketing strategy may be flawed. However, if recall is low, management should implement a message
leakage diagnostic and improvement strategy. Firms employ a number of research and testing tools to determine where message “leakage” is occurring.
A-A-P-E-R (ACCESS-ATTENTION-PERMISSION-EXPERIENCE-REPUTATION) MODEL
CALCULATION OF COMMERCIAL INDICES
Indices (or Indicators, or - financially - Ratios) are useful to understand and to monitor Performance Components behaviours and trends. They are numbers or percentages and represent mathematically figures, facts and situations of an Enterprise. Monitoring Indices over periods of time is a very valid way of controlling Performance Components trends. Indices are useful on their own and even more when put in relationship the one to the other. It is also possible to create an Index representing the overall behaviour of a number of Indices, and it is even possible to create an overall Enterprise Performance Index. Ims = Market Share Index = 100 x Overall Market Value ($)/Sales ($) PCPM (Per Capita Per month) = [(Total Sales)/(12 X No. of Sales Person)] B.E.P point where Sales = Expenses Efficiency of any system = output /input= Sales (Inflows)/ Input (expenses or outflows)
Conclusion IF PCPM < B.E.P(Breakeven point) Then No. of Executives should be reduced to making PCPM higher than B.E.P, if not able to generate higher PCPM then company should dissolve that territory. PCPM = B.E.P (Breakeven point)
No. of Executives should be reduced. Executives should be more focused on Profitable product (Product where profit margin is high) rather than Normal products( which companies are just dealing for name). If PCPM > B.E.P (Breakeven point) Good for company. This can be considered as Potential territory. No. of executives can be increased to utilize this potential territory up to a certain level. This scheme is generally used by Zydus Cadilla & Unisankyo Pharmaceutical companies. I have done telephonic Interviews of Zonal & National Sales Manager Ritesh Joshi & Hemant Joshi for finding these best models. I want to appreciate their efforts for sharing their valuable knowledge. For other cases subjectivity in decision also plays a vital role.
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