Sutherland Global Services
Virtual Detailing in Life Science Organizations
Healthcare
Table of Contents
Problem Summary
2
Pharmaceutical Life Science Product Sales –
The Deteriorating Dynamics
3
Life Science Sales & Marketing:
Between A Rock and A hard Place
4
Life Science Sales & Marketing:
Synthesizing a Solution
4
Outsourcing: A Solution but Not a Silver Bullet
5
Virtual Detailing – A Case Study
8
Contact Information
8
About Sutherland Global Services
9
Problem Summary
This White Paper provides some insights and approaches that address four major questions facing Life Sciences sales organizations
1. Do you have a cost-‐efficient Business Intelligence enabled process to improve sales productivity, effectiveness and account management?
2. Does your structure allow for rapid capacity scale up and down to manage seasonality, launches and territory needs?
3. Do you have technology-‐enabled sales process oversight to improve compliance?
4. Do you have a satisfactory solution to address the Physician – Field Sales Representative
interaction restrictions?
Pharmaceutical Life Science Product Sales –
The Deteriorating Dynamics
Regulatory policies at both Federal and State levels and interaction restrictions with physicians have severely impeded the effectiveness of the prime Life Sciences Sales Channel – The Field Sales Representative (FSR). Highly publicized cases of misinformation/misrepresentation and aggressive/invasive sales techniques had also cloaked the Life Science Product sales profession with a negative reputation
The Physician – FSR/Detailer relationship… changed forever?
• Many physicians see FSR’s only with scheduled appointments. 1 in 4 Physician Practices refuses to
see FSR’s altogether.
• Life Science manufacturers are responding to hard times with layoffs and a shift toward remote
account managers. At its peak in 2007, the American pharmaceutical industry fielded 102,000 sales reps – slashed down to 92,000 since then and, according to ZS Associates projections, the number will fall to 75,000 by 2012.
But the cutbacks haven’t solved the problem
• Life Science sales force COS has increased and RoI has plummeted –
For every Sales visit only 37% place their products in the Practice’s Sample cabinet and only 20% speak to a physician in person (Source: TNS Healthcare)
• Profit per FSR visit fell 23% from 2008 to 2009 (Source: PWC)
• Ensuring compliance to a complex and continuously evolving regulatory regime across a
geographically distributed sales force is both challenging and costly
Life Science Sales & Marketing:
Between A Rock and A hard Place
Shrinking pipelines, heightened regulatory scrutiny and pricing pressures are forcing Life Science companies to consider new ways of managing the business.
In the drive for efficiency, sales and marketing functions are adopting complex sales models based on local conditions. The implementation of these new models requires innovative solutions from sales operations and market analytics groups that provide services such as business intelligence forecasting, sales force strategy, field force alignment, targeting, incentive compensation and reporting.
While sales and marketing operations need additional effort and innovation to support their complex selling models, they must do so with fewer resources due to cost-‐cutting pressures in
the industry. Furthermore, many of these support functions require labor-‐intensive analytical support, which is difficult to sustain when there are constraints on resources
Major Cutbacks
Wyeth: 1200 Merck & Co: 1200 Sanofi-‐Aventis: 650 Schering-‐Plough: 1000 GlaxoSmithKline: 1800
Figure 1: Between A Rock & a Hard Place
But there’s also some good news
• The percolation of generic/unbranded products presents both a threat and an opportunity. The
Threat is market share erosion. The Opportunity is market-‐share gain through targeted messaging and brand leverage.
• For example, approximately 60% of Diabetes Test Kit scripts are unbranded –providing a market
opportunity space of $4.8 billion in an $8 billion market segment.
• From a strategic perspective, the Medicare market is an excellent opportunity for product
influence since it’s an even playing field for all brands and sales are not dictated by the traditional tiered, HMO Co-‐pay structure
The Problem Statement Summary
Sales Operations Localized selling environments More heterogeneity New selling models Changes in data landscape
Budget restrictions Reduced headcount More expensive talent for higher complexity of work Shrinking pipelines Generic competition Regulatory constraints Pricing pressures Market Analytics Manage increased Complexity
Reduce Costs and become Operationally agile
ü Major dislocation of the traditional direct personal sales process
ü Heightened sensitivity to regulatory compliance in the sales process
ü Ability to rapidly leverage perceived market spaces and opportunities
ü Cost pressures aggravated by plummeting sales productivity and yield
ü Absolute need for cost efficiency and operational agility and market insight
Life Science Sales & Marketing: Synthesizing a Solution
An effective solution must necessarily address the constituents of theProblem Statement Summary defined in page 2.
While the sales force headcount cutbacks have reduced costs it has added to the problem of dwindling pipeline and sales productivity. In addition operational transparency and flexibility continue to be serious challenges.
The Table below illustrates an approach to a solution
Problem Statement Solution Outline
Major dislocation of the traditional direct
personal sales process Create a virtual sales process and channel and account management
Heightened sensitivity to regulatory
compliance in the sales process Rigorous technology-‐enabled monitoring and oversight
Ability to rapidly leverage perceived market spaces and opportunities
Analytics driven rapid go-‐to-‐market roll-‐out capability
Cost pressures aggravated by plummeting
sales productivity and yield Variable and outcome-‐based cost structure
Absolute need for cost efficiency and
operational agility and market insight Variable cost/capacity combined with high-‐end Business Intelligence and domain expertise
Restrictions on Physician-‐Rep interactions
affecting speed/rate of adoptions Remotely managed multi-‐touch-‐point process
Outsourcing: A Solution but Not a Silver Bullet
• Many companies have found that Third Party Outsourcing increases the flexibility of field
promotion to meet changing market dynamics. A company can rapidly adjust up or down to meet brand, season, region, or territory needs without impacting on internal resources, cost-‐efficiency or morale
• Outsourced promotional services providers are able to offer a more permanent cost
advantage over Field sales Representatives. This is due to the fact that outsource providers are able to leverage the infrastructure of fielding a team -‐ recruitment, hiring, on-‐boarding, training, SFA, fleet management, etc. across multiple clients and engagements
• Most of the major biopharmaceutical companies are now working with at least two
different Contract Sales Organizations (CSO’s), to meet their varied field requirements. Many smaller, emerging companies almost exclusively use outsourced FSR’s, not having the resources or risk-‐tolerance to support the infrastructure necessary to field an in-‐house team.
HOWEVER…
Historical data indicates that there is a significant variance in the realized value and actual experience of outsourcing across any given client cluster or Industry.
In-‐depth analysis across industries and client profiles as well as
on/offshore points of service delivery has identified certain consistent and common reasons for the variance.
1. The Expectation –2 – Experience Equation
When Outsourcing is considered as either the last option to
address a business challenge or a tactical ‘mess for less’ solution the eventual outcome is often disappointing. This is because in both situations the adopted strategy is the outcome not of design but of default. In both scenarios the reactive nature of the business requirement affects the dimensions of the evaluation and decision-‐making process resulting –usually – in a self-‐fulfilling prophecy.
2. The Requirement – 2 – Resolution Equation
The two core elements that require rigorous articulation and evaluation are:
Client: Realistic articulation of expected outcome and related timelines Service Provider: Relevant experience, expertise and cultural alignment
Sample Evaluation Parameters for Sales & Marketing Outsourcing
COMPONENT EVALUATION PARAMETERS
Core Outsourcing
Capabilities Quality of current client engagements Multi-‐shore service delivery infrastructure
Breadth and depth of service range – Transaction to Knowledge services
Transition, technology, program management and process expertise
Sales & Marketing
Delivery Experience Track record of Client business generation End-‐to-‐End Quote-‐2-‐Cash capability Track-‐record of process innovation
Ability for rapid ramp and compressed learning curve
Culture Fit Track record of aligning to brand values Track record of going the ‘extra mile’
Cost Structure Configuring costs to fit client requirements
Proof-‐of-‐Partnership Outcome-‐based pricing models Proactive investments
3. The Client-‐Service Provider Equation
Most successful Outsourcing relationships are symbiotic and structured with committed priority and focus on both the Operational and Management levels.
The continuing involvement of the executive level of the Client organization combined with the committed participation of the senior management of the Service Provider are the key components of significant and sustainable value generation
Sample Engagement Governance Structure
Outsourced Virtual Sales: The Do’s & Don’ts
DO’S DON’TS
Consider Outsourcing as an integral part of your
long term business strategy & process Perceive Outsourcing as a tactical and episodic option to solve immediate problems
Be sensitive to the expectations and concerns
of all stakeholders in your organization Enforce the decision as a ‘must do’ dictate down the organization
Assess the changes in work orientation that will
be required to be collaboratively effective Assume that internal people will align automatically to the new work paradigm
Be realistic in terms of learning curve and outcome expectations in terms of time and value
Accept vendor assurances about performance without irrefutable proof
Define and quantify both the tangible and
intangible expectations of the engagement Focus exclusively on efficiency and effort metrics which do not correlate to measureable business results
Executive Leadership
SERVICE PROVIDER
Service Excellence & Business Transformation Services Strategic Vision Partnership Value Delivery Control & Reporting Management & Reviews Knowledge Transfer CLIENT Project Management
Joint Steering Committee Meeting (Quarterly)
Service Review Meeting (Weekly) Joint Review Meeting (Monthly)
Delivery Management
Engagement Review Meeting (Biweekly) Executive Sponsorship Team
Steering Committee Quality &Metrics Program Management Delivery Management Subject Matter Experts Rel ati on sh ip a nd C om m er ci al M an ag em en t SER V IC E PROV IDER CL IEN T Pr ogr am Lead T2 T3 PR O CESS 2 PR O CESS 1 T1 Customer Experience Team Learning and Development HR and Recruitment IT Quality Support Services PR O CESS 3 PR O CESS 4 PR O CESS 5 T4 T5 Engagement Leadership Command Center PR OC ES S ‘n’ T5
Virtual Detailing – A Case Study
The Client: A global Pharmaceutical giant with revenues of $45 billion
Outsourcing Objective: To build a virtual and flexible Sales Promotion Channel to drive brand
recognition, incremental sales revenues and enhance account management effectiveness.
Selected Partner: Sutherland Global Services Sutherland Solution:
• Deploy a dedicated team with relevant domain expertise enabled by a proprietary CRM
Platform to roll-‐out multi-‐touch programs to a defined target base with targeted messaging and offers
• Complete all necessary documentation and processing as per client/regulatory
requirements
• Provide transparency in Program Reporting and real time /remote QA/call monitoring to
enable continuous performance improvement and ensure regulatory compliance
• Leverage Analytics and RCA techniques to drive sales productivity and yield
• Performance assurance driven by outcome-‐based pricing structure (measured by a Third
Party organization)
If you found this White Paper relevant and worth considering further we will be happy to collaborate and contribute to your thinking process. Please contact:
Ed Katz, Global Practice Head Healthcare, Sutherland Global Services
Cell: +1 (585) 298-‐2778 Email: [email protected] Measureable Results
ü 300% increase in successful Doctors/Decision-‐maker presentations)
ü 360% increase in sale call outcomes (samples/test kit requests, etc.)
About Sutherland Global Services
Established in 1986, Sutherland Global Services is a global provider of business process and
technology management services offering an integrated portfolio of analytics-‐driven back-‐office and customer facing solutions that support the entire customer lifecycle. As a Healthcare Solutions and Services provider, Sutherland designs innovative solutions to address business challenges including those driven by the paradigm shift in member/provider care, regulation and reform, administrative and operational cost pressures, revenue cycle management effectiveness, and electronic health record requirements. Headquartered in Rochester, N.Y., Sutherland employs over 30,000 professionals and has 35 operations centers in the United States, Philippines, India, UAE, Egypt, Bulgaria, UK, Canada, Mexico, Colombia, and Jamaica. For more information,
visit www.sutherlandglobal.com
