Tuesday, June 06, 2006

Industry PR & Rep Morale

In February, I wrote about GSK's use of sales representatives to deliver to physicians and the community at large a PR campaign that is designed to promote the value of the pharmaceutical industry. I criticized this effort on the basis that sales reps are among the least credible of pharma employees (see "Sales Reps Make Poor Spokespeople"). This strategy is the brainchild of Mike Pucci, GSK's VP-external advocacy.

What I failed to realize, however, was that the primary goal may not be to spread the good word but rather to boost the morale of the sales force! What leads me to this conclusion? The recent release of RepReview -- a market research study that examines pharmaceutical marketing from the perspective of sales representatives. The biannual study was performed by G & S Research (see the
2005 RepReview Synopsis).

According to this study, eighty-five percent (85%) of rep respondents think that public opinion of healthcare manufacturers declined in the previous year (2004) and only 5% think it improved (huh?). Of this majority, 51% blamed media exposure as the culprit (duh!). Only 37% cited high medication costs along with manufacturer's greed and a paltry 13% felt the loss of reputation had something to do with unsafe/failed drugs and related lawsuits.


As the G & S report states:

The number of reps in the US alone has grown 85% during the last five years, with practically no physician growth. Today, the number stands around 90,000, and this sales force commands four out of every ten dollars [my emphasis] of the industry's sales and marketing budget. So it's no surprise that improving the return on the sales force investment is a top priority for pharmaceutical companies, both domestically and worldwide.
Add to this the fact that there is an average annual rep turnover rate of 14% to 15% and you realize how important it is to keep reps motivated. Usually, high incomes and big bonuses would be motivation enough (see, for example, "Generation X Pharma Reps"). These days, however, pharma companies need to trim some of the fat and some are even downsizing their sales force -- but other methods of increasing or at least maintaining sales rep performance are also needed. I think Pucci's strategy fits the bill perfectly!
The Hay Group, a human resources consulting firm, also predicts there will be greater demand for experienced sales staff in the biotech and specialty pharma sectors and declining opportunities for recent college graduates pursuing jobs as sales representatives at the major pharmaceutical companies (see "Downsizing Looming and Decline in Pharmaceutical Sales Rep Jobs for Class of 2005").
Big Pharma is now competing for sales reps with biotech, an industry that enjoys -- for now -- a much higher positive public perception. [I say "for now" because biotech is being lured to follow the same path as Big Pharma as far as risky marketing practices are concerned. For more on this, see "Biotech DTC: Business Not As Usual."]

Pucci's program begins with sales training -- steeping reps in facts and figures that support a positive image of the industry (see "
The Empire Strikes Back"). The result: instant morale booster!

Will the reps be successful in getting the word out? Who knows? Who cares? Maintaining employee morale -- especially sales rep morale -- is more important. Pucci is a genius!


Other Results from the RepReview Study

The RepReview Study revealed a contradiction between the view reps have of themselves and how physicians probably see them. Forty-one percent (41%) of respondents chose "trusted colleagueue" as the best descriptor of how they believe the physician viewed them during their last sales call (40% chose "new information provider).

A mere 13% chose "sample supplier"!
That's funny, because almost half the reps conceded that physicians would not see them if they did not have samples on hand. How can half of reps be perceived as sample providers by physicians yet only 13% of reps see themselves that way? It's a riddle wrapped in a mystery.

If you are interested in how important samples are in the rep-physician relationship, please consider ordering this
Pharma Marketing News reprint: "Intelligent Online Sampling Strategies."

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