MODELLING OF SALES FORCE

EFFECTIVENSS
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 Developing Directing Determining

strategic the Sales the Sales Sales for
role of the force force effectiveness
Sales &
function 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 high-
value 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 Firm B- Effective Targeting

Total Number of Prescribing 3,000 3,000
Physicians

Number of Prescribing 1,000 1,000

Physicians Visited
Weekly Rx's Written by Top 25,000 25,000
1,000 Prescribers
Weekly Rx's Written by 13,000 22,500
Physicians Visited
Sales: 15% Share of 1,950 3,375
Physicians Visited

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.

INDEXING METHODS
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.