It is no secret that decision making in pharmaceutical utilization is increasingly moving away from individual clinicians to groups of business and functional stakeholders, such as those in integrated networks, hospital P&T committees, payer organizations and large group practices. Selling pharmaceuticals is consequently becoming, though not exclusively, the province of key account management strategies, an aspect of which is the key account manager (KAM) role.
Yet pharmaceutical manufacturers have struggled to build effective KAM selling models. One reason behind this absence of success is a lack of effective talent. This seems almost inconceivable at a time when the industry ought to be awash with talent, having shed over 30% of its sales force since its peak in 2006. But there are some very practical reasons for the current state.
Historical success in pharmaceutical selling has relied on clinical, one-to-one selling. Find and gain access to the right doctors, visit the right number of times and deliver core messages linked to what matters to that doctor. In this context, selling excellence was defined by strong execution related to gaining access, choosing from among a few regulated clinical messages and delivering those messages. The sales pitch has been highly constrained by compliance and nearly always focused on a clinical and product-oriented message. The goal of the sales call was to win the highest possible share of the next upcoming choices the clinician would make.
But this approach doesn’t work for key accounts. Repetition of highly scripted and relatively simple messages is unwelcome. The environment is complex; stakeholders are many and with different needs. And unlike the individual clinician who may make several prescribing decisions in a single day, formulary, protocol, coverage, rebating, listing, service provider and strategic partnership decisions are high stakes and infrequent.
In addition to selling within a complex decision-making environment, succeeding with a key account requires the KAM to adapt the value proposition to the needs of the account and each individual stakeholder. KAMs must listen, question and probe. An effective KAM must gather enough insight to understand stakeholders, their needs and their relative influence, and then be able to navigate the decision-making process and tailor a value proposition for a solution that is mutually beneficial.
Comparing the historical success profile in pharma to the needs of key accounts very clearly demonstrates why there is a talent shortage. The drivers necessary to succeed in traditional clinical selling have little overlap with those needed in a multi-stakeholder, high-stakes commercial environment. As a result, pharma sales organizations simply have not developed enough of the people needed to succeed in the new model. Unfortunately, upgraded training programs do not offer a complete solution; many of these new skills require significant practice and apprenticeship.
Since pharma grows so few effective KAMs organically (especially outside of managed care roles), there are attempts to “import” talent. But this is not without risk and often fails. KAMs from other industries struggle with the shackles of a highly compliant industry, and, as outsiders, do not know how to work their new organizations to get things done. They are challenged in an area where marketing resources are focused on the product. Pharma recruiting profiles place unnecessarily high value on clinical selling. And pharma often unreasonably wants the KAMs to have “carried the bag” in the clinical force before being welcome at the high-stakes KAM game. Interestingly, the right pharma KAM profile likely requires more of a GM-type skillset, and may be better sourced internally from marketing management in addition to sales. Indeed, successful candidates may not meet some of the hiring constraints that are often in place.
As pharma marches inevitably to a more key account-oriented selling environment, we have four suggestions to address the talent shortage.
1. Set clear KAM objectives.
A crucial success factor is defining precisely what is needed of the KAM organization so that members clearly understand their objectives. One successful KAM organization for a medical device company went through a year-long design process to interview customers to define organizational goals, create target account profiles and develop theoretical “offering bundles.” In the end, there was clear organizational alignment on what was to be done, how the company would get value from the KAM organization and objectives for the KAM role.
2. Create a talent management program to evaluate recruits and motivate development.
Finding and then developing the right people is critical to the success of the program. An organization operating in Europe makes use of a KAM-specific competency model to clearly delineate the attributes and behaviors of a successful KAM. The competency model serves as an interviewing standard for incoming talent, internal or external, and a yardstick for measuring the continuing development of that talent. The interview also contains a business case simulation which can be used as a behavioral test.
3. Scale slowly, don’t force the organization into “warm body” placement or hiring.
One of the worst possible mistakes is to scale the organization too quickly. “Warm-body” hiring that dilutes the talent pool undermines the fledgling organization. Outsized investments made in an oversized organization leads to unrealistic or impossible expectations. Smart organizations move with care, ensuring that quality is never compromised by hiring beyond the available talent. This also ensures that only the best people work with only the best-fit accounts and proper support is available from the rest of the organization for the KAMs to succeed.
4. Don’t rely on raw talent alone, provide necessary enablers.
Some of the biggest barriers to KAMs building mutually beneficial arrangements with the accounts with whom they work are internal. The organization inadvertently creates barriers through compliance, approval levels and inter-brand politics. One organization sought to address these barriers through two mechanisms. First, it created a “playbook” for creating solutions. This approach institutionalized the process by which a unique customer solution can be created, showing clear business criteria and a “contract” for delivering approved solutions. In addition, a standing business review council was created to review the solutions at regular intervals. By speeding the approvals, clarifying the requirements and providing clear guidance, the organization was able to foster the creative implementation of new solutions. KAMs know exactly what to do and how to do it. The organization even used these unique mechanisms in the recruiting process to attract outside talent which was otherwise skeptical of joining the notoriously compliance-shackled industry.
While Key Account Management emerges in fits and starts in the pharmaceutical industry, it is here to stay. The sooner the industry learns to adapt its way of selling to and engaging key accounts, the sooner it can work with major customers to unlock mutual value. As the pace of pure product innovation slows, it is an essential way of the future.
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