In the mid-1990s, Peter Ferguson was hired by Salomon Brothers, a highly respected investment bank focused on institutional business. Ready for a rewarding and lucrative career in investment banking, Peter joined the firm’s Institutional Equity sales team, calling on large mutual funds and hedge funds. Similar to a pharmaceutical sales representative, his role was to call on the firm’s customers and share the company’s research information. While Peter did much of his selling on the phone, he visited his most valuable customers in person to provide additional services and resources as necessary to acquire and keep their business. Although the first few years proved very lucrative, it became more and more difficult for Peter to call on his clients and gain their interest in his offerings.
Everyone we speak with agrees the pharmaceutical industry is currently undergoing transformational change, but will we learn from the experiences of those like Peter, who have gone through this type of change before us?
The Time for Transformation is Now
As life sciences and pharmaceutical companies continue to redefine their business models and create customer-centric centers of excellence that encompass the entire physician experience from drug development to commercialization, they must also create experiences that connect their products and services to an increasingly sophisticated customer base. They must develop a series of intertwined interactions among all stakeholders—patient, caregivers, doctors, nurses and payers.
Since technology has put so much information in their hands and connected them with others who can share their experiences from a credible perspective, physicians are no longer satisfied with sales messages that explain what we offer (product features, benefits and “reasons to believe”). They want to relate to why we do what we do, i.e., the type of experience we can offer. This market transformation requires an equal transformation in marketing and sales efforts to provide real value to customers and differentiate us from our competitors. This transformation must address the:
- Complex multi-stakeholder matrix
- Need to deliver valuable experiences to patients and HCPs
- Increasing burden of chronic diseases
- Demand to improve health outcomes
- Pressure to enhance business results
These interwoven and increasing demands have significant implications for the overall industry, and companies are searching for ways to adapt. As a result, traditional feature/benefit sales messages don’t have the impact they once did—a transformation is required to create positive customer experiences that will produce better health outcomes and greater business results.
Learn from Those Who Have Gone Before Us
Over the past 10 to 15 years, capital markets have experienced a radical transformation driven by technology and significant change in market structure. Electronic trading has dramatically increased trading volumes and liquidity, slashing the cost of intermediation and broadening access to markets. Because large fund money managers now have “direct” access to all the information and research they need, sales people like Peter are no longer necessary. Communications and trading transactions went from being “human” to “digital,” and the use of sales reps quickly became unprofitable.
As research became readily available, firms like Salomon Brothers became more and more competitive and compensation structures changed. Only specific expertise was in demand because offerings around the broader market information were impossible to differentiate. In an industry driven by growth and profitability, thousands of people (including Peter) lost their jobs and, with the economic downturn of 2008, companies merged, downsized or went bankrupt. The investment banking business was changed forever.
Why do we believe this transformation must happen now in pharma?
Think about the pharmaceutical industry, and you’ll realize how familiar all of this sounds:
- Driven by growth and profitability
- Major reductions in the number of sales representatives
- Merging of companies
- Open access to product information and research
- Specialization of products
- Generic dominance in the “broader” primary care market
Similar to hedge and mutual fund managers, physicians no longer value the reps’ delivery of information on the product’s features and benefits (with few exceptions), as they typically have this information at their fingertips (and may not perceive reps as the most credible source of this information anyway). Like the evolution in investment banking, technology has provided immediate access to product information and comparisons, clinical study data, expert opinions and most information physicians require to make a prescribing decision.
According to the 2015 AccessMonitor data from ZS Associates:
- Today, 53% of physicians in the U.S. place moderate to severe restrictions on visits from sales reps (compared to 49% in 2014, 45% in 2013, 35% in 2013, and 23% in 2008)
- In 2010, 75% of oncologists were labeled as “accessible”; in 2015, 73% of oncologists are labeled as “access-restricted”
- In 2015, only 19% of nephrologists are labeled “accessible”
- With increased access to technology and minimal exposure to sales reps during medical training and fellowship, the new generation of physicians is expected to limit rep access even more
Critical Components for Successful Experiential Marketing
To design and deliver great customer experiences, brand teams must first know who their customers are, what they’re trying to achieve (with their products or services), what they’re going through to achieve it, and who they’re involved with along the way. It’s important for brand teams to understand what their customers are thinking, feeling and doing during the “key moments of impact” when decisions are being made, what language gaps exist between patients and doctors, where the brand and its competitors’ current programs are in relation to these key moments, where they are making an impact, and where there are gaps.
Only then can brand teams create compelling strategies for their products and services that reach and engage physicians and add value. Experiential selling provides opportunities to establish continuous engagement with physicians. By deepening their insights into customer needs through continuous re-engagement, brand teams can use these insights to guide sales rep interactions, inform future marketing strategies, drive brand loyalty, and continually improve ROI.
The Rep Can Remain a Valuable Asset
It’s time for sales reps to stop “selling”—maybe not literally, but certainly figuratively. If they want to truly engage their target audiences and add value “beyond the pill,” they must move away from pushing brand features and benefits to creating immersive customer experiences. Successful reps will become the “conductors” of all communication channels—including digital—to supplement face-to-face interactions and cater to their physicians’ preferences. They will leverage experiential selling to enable greater personalization of content based on specific physician preferences, and create more focused and richer personal relationships that emphasize “added value.”
As an industry, we must study and learn from companies and industries that have transformed before us because, unless we embrace this transformational change, our reps may end up like Peter—looking for jobs that no longer exist.