Selling in the pharmaceutical industry is very different to other industries due to the nature of the product offering. There are a number of key factors to consider, including heavy regulation, ethical issues, key influencers (key opinion leaders) and the overall selling process.
This article aims to answer this key question: what are the main differences between selling in the pharmaceutical industry and mainstream sales?
In order to answer this question, I interviewed a Sales Manager at one of the largest pharmaceutical companies in the world. The interview was structured using a number of different topic areas including psychology, the sales process, leadership, motivation, the changing environment and ethics.
Psychology of Selling
The ‘Sales’ Personality
When we asked our interviewee about the ideal salesperson personality, he stated that there are three personality traits which effective salespeople should possess; “confidence, a thick neck and likeability”. In addition to this, he maintains that specific abilities are of greater benefit, depending on the specific target industry. However, it is difficult to determine clearly from theory what would be viewed as being of higher importance. After analysing the relevant literature, we found that there doesn’t seem to be one clear or predominant answer.
Koehler (2012) argues that, “to be a professional producer you must exhibit certain traits”. Plotkin (1987) agrees and describes the ideal salesperson as “energetic, sincere, enthusiastic, enjoys dealing with people and can work on commission”. However, others have disagreed, Donaldson argues “The important difference is not in their training or sales skills, but in their ability to recognise the personality style of the client and tailor the presentation to fit with the personality of the prospect”. Walton agrees with this view, stating that it’s not down to personality, but rather a matter of having the right attitude (Capell 1993).Overall, it doesn’t seem that there is one right or wrong answer to the ideal salesperson personality.
Our interviewee explained why he believes that abilities are of greater importance than personality, in respect to selling in the pharmaceutical industry. He demonstrated this using the example of a pharmaceutical salesperson approaching a doctor. In this case the doctor is aware that the salesperson is trying to sell them something, which will not only be of sole benefit to them, but will have benefits for the patient also. This is very different to other industries where the potential customer may have to be convinced of the benefits. The “ability to explain the product features, benefits and emotional benefits is more effective in selling products to their doctors rather than the personality of the salesperson”. Without this ability, the doctor will find it difficult to determine how beneficial the medicines are to his/her patient.
From both the interview and researching the relevant literature, there isn’t one defining answer, both theory and practice differ, to a degree. Jobber and Lancaster (2009) make an interesting point and show the importance of identifying with brand personality, “the characterisation of brands as perceived by customers” and the ability to adapt to your brand personality rather than your own personality. You could extrapolate that because pharmaceutical brands are characterised as factual and knowledge based, an ideal salesperson would require the ability to explain the product in a clear, methodical manner. This correlates with our interviewee’s view, who argues that the ability to explain the product features, benefits and emotional benefits are more effective in selling pharmaceuticals.
Are Salespeople Born or Made?
From reading relevant literature, it is argued that a combination of innate abilities and learned skills produce the best salespeople. Theory suggests that a good salesperson needs to be born with certain personality traits, such as an extroverted personality, but must still learn additional skills, most important of which is the ability to match products with customers needs (Bragg 1988). According to Montgomery (2011) it’s a combination of both. He argues that there are definitely some inherent attributes allowing you to be successful at this profession “…but that doesn’t mean you can’t learn to improve”. Our interviewee disagrees with what theory suggests and argues that top salespeople are born – “It is definitely not any sort of training course the company could provide them with that gives them that flair”. He feels that anyone can become a good sales person if they acquire certain attributes, however, elite salespeople are born. He argues that selling is all about the ability to change peoples behavior, for example, he explained that it would take an elite salesperson to convince a consumer who is loyal to Apple to change to Microsoft.
Selling Technique
There is no right or wrong answer to what is the best selling technique. From reading the literature there seems to be environmental factors in place that will determine the type of selling technique which should be used. However, most importantly, theory suggests that it’s about your ability to adapt to the needs of your customers that is of greatest importance. The interviewee agrees with mainstream theory and has also created a theory of his own which he feels is most beneficial when selling pharmaceuticals. The sales technique that he teaches is a “Win, Win, Win Model”. This model requires that you seek out the benefits of the products you are selling and determine who will win at each step. It is a tiered system, where, firstly you convey to the customer the product features, then the product benefits and most importantly the emotional benefits.
He demonstrates an emotional benefit with an example, such as the ability to prove to the doctor that their patients would be able to go home this Christmas if they were to start prescribing their product immediately. In pharmaceuticals, it is all about determining how the sales team, the doctors, and ultimately the patients will win. In addition to this, in the pharmaceutical industry it is as important to find long term wins. Because all drugs are patented for the short to medium term, it is essential that they can build a long lasting, trusting relationship with doctors. This is in order to retain their customer loyalty when competitors enter the market offering a generic equivalent of their drug. Therefore, they need to find long term wins rather than short term.
The Sales Process
“For at least 80 years, the steps in a selling process have remained virtually the same…, perhaps the oldest paradigm in the sales discipline” (Moncrief and Marshall 2005, p.13). The theoretical model of the sales process has 7 clearly defined stages, and our interviewee agreed that this model is ‘more or less’ as it applies in the pharmaceutical industry. However, he noted one important difference – selling in the pharma industry is a repetitive cycle instead of a linear process.
This is because the sales rep is not trying to influence the doctor, who is the customer, to prescribe their drugs once or any set number of times, but on a continuous basis. This leads the sales rep to attempt to build a long lasting relationship with the doctor which will outlive patent expiry of the drug – in this way sales in the pharma industry can be described as Customer Relationship Management. The theory agrees, according to Storbacka et al. (2009) “the sales process is much less about selling a product and much more about creating a relationship”. Aspects of CRM include “issues such as establishing trust with customers, responding to subtle cues, anticipating customer needs, providing personalised service and nurturing ongoing relationships (Anderson 1996)” (Landry et al. 2005).
According to Jobber and Lancaster (2009), pharmaceutical salespeople fall into the category of “Order-Creators” and they can be defined as missionary salespeople. On a sales call, the salesperson is not attempting to close the sale, instead they are trying to achieve an Action Agreement where “the salesperson or doctor agree to do something before their next meeting. This technique has the effect of helping the doctor-salesperson relationship to develop and continue”. Our interviewee agrees wholeheartedly with this – “that describes exactly what I try to aim for when I make a call!”.
The theory suggests that sales relationships are comprehensible from four perspectives on the sales process – the environment, the firm, the sales cycle and sale characteristics (Borg and Freytag 2012). They found that dynamic forces exist at each level and also between levels, and that “there seems to be an implicit understanding that it is people who compose the levels” (Borg and Freytag 2012). Indeed, when we asked our interviewee to describe a typical day as a salesperson the first thing he said is he spends most of his time “out meeting customers, building relationships”. He emphasised that he tries to get key messages across “but in a subtle way” – he wants to be thought of as somebody who is there to talk with the customer and help them, not just as another sales representative.
Sales in the pharmaceutical industry would be classified as industrial selling, as opposed to consumer selling, because the customer is the physician not the patient. The theory states that “….industrial salespeople periodically check to determine if the customer is satisfied…” (Hite & Bellizzi 1985) and this can be observed in practice as our interviewee continuously checks in with his physicians to ensure they have confidence in prescribing the drug and to find out if they are having any problems. In addition, “…industrial salespeople found the tailored and partially standardised presentation styles to be of significantly greater importance…” (Hite & Bellizzi 1985). Again, this reflects selling the emotional benefits, not just product features. Product benefits would require only one standardised sales pitch per product, however, customers will value different emotional benefits, so it is important to personalise each sales call to ensure you are selling the correct benefits. This links back to when our interviewee mentioned that, for him, Problem Identification is the most difficult part of the sales process – “If you fail at this stage, you are selling the wrong benefits”.
According to Chakrabarty et al. (2010), “salespeople may perceive that their customers depend on them for attaining important goals. Perceived customer dependence enables salespeople to have power in customer-salesperson interactions that they can use as a potential for influence…”. However, our interviewee doesn’t agree that this is the case in the pharmaceutical industry, instead he refers to a framework which he calls the “Ladder of Influence” where the salesperson is at the bottom. Indeed, the lower half of the ladder is made up of representatives from inside any particular pharmaceutical company, and the top half of the ladder (i.e. with greater influential power) is made up of those who are external to the company. This demonstrates the importance of developing strong relationships and gaining endorsements from Key Opinion Leaders in this industry. “People do business with people they know, like and trust”.
The cultivation of visible accounts (i.e. influentials that affect other buyers) are deemed important. “This represents an attempt to take advantage of the ‘bandwagon’ effect and the influence of opinion leaders” (Hite & Bellizzi 1985). This is why sales reps are called “Account Managers” – “because Account Managers have the savvy to bring people in, instead of just pushing messages out”.
In light of this, Key Account Management is essential in the pharmaceutical industry. Wotruba and Castleberry (1993) found that developing long-term relationships was the number one task involved in Key Account Management – which is exactly what our interviewee talked about. If a salesperson can develop long-lasting, positive relationships with their most important physicians, this will have a knock-on affect as Peer-to-Peer endorsements and KOLs have the greatest influence. The more positive these customers are about your product, the more they will spread your sales message for you and it will hold far greater credibility.
According to Jobber and Lancaster (2009), there are 5 ways in which a salesperson can build relationships with key accounts – personal trust, technical support, resource support, service levels and risk reduction. In the pharma industry, resource support and service levels don’t apply as there is no transaction between the Account Manager and the physician. However, personal trust, technical support and risk reduction are key factors – we have already demonstrated how trust plays a vital role. Technical support is provided by the Account Manager by conveying their in-depth knowledge of the mode of action, adverse events and competitive differences of a drug, as well as providing copies of clinical studies, leave pieces etc. to the customer. Risk reduction is provided through honesty about the strengths and limitations of a drug, this allows the physician to prescribe the correct product and dose to their patients.
Sales Management
Motivation and leadership are two important factors of management. Motivation has been described as “the art of getting people to do what you want them to do because they want to do it” (Dwight D. Eisenhower). To effectively motivate someone you need leadership. “Motivation provides the movement while leadership supplies the direction” (Jobber and Lancaster 2009). In order to motivate someone you must understand them. We asked our interviewee what tools he used to motivate his account managers. He sets out a vision and allows everyone to find their own way to that vision. Not only does he set out the vision, but he breaks it down into smaller manageable goals. At times he encourages his team to go and find their own way to the vision themselves.
One of the tools used for motivation in the pharmaceutical industry is the ‘Rep of The Year’ awards. We asked him about the importance of using this as a motivational tool. He believed the ‘Rep of the Year’ award would motivate some people, particularly the Account Managers, as they would be motivated by the prestige associated with the award. He believes that people like to know they are doing a good job. His mantra is “Say it when you see it” – when someone is doing a good job, say it to them then rather than waiting until the end of the year. It is about understanding why people work and using this as a motivating tool. He mentioned he works to sustain a certain type of lifestyle. He would be more motivated towards something that would help him sustain this lifestyle than being on a stage in front of his colleagues. A bonus would motivate him more so.
Cash rewards are the easiest in some ways, because they enable you to do different things. Cash also gives the prestige of the higher the bonus you are on, the better the sales rep you are. This refers to Vroom’s expectancy theory, the harder one works the higher the reward one receives. “Thus, for a salesperson who already receives a more than adequate level of remuneration, additional payments may have no effect on motivation. Secondly, Maslow is saying that what may act as a motivator for one salesperson may not be effective with another“ (Maslow). This is similar to Herzberg’s theory, where one receives recognition for their achievements. “Kalu et al. (2010) research indicates that the performance of the salesperson is positively correlated to his or her working harder (effort)” (Amue Gonewa John 2012).
“Leadership is the process of influencing the behaviour of people towards the accomplishment of objectives” (Jobber and Lancaster 2009). With regards to sales management, the main focus for leadership is based on the relationship between the sales manager and their salespeople. In order for a leader to generate a good performance from their team, one must increase the rewards for the sales team.
What is required to be a successful leader? Goleman’s study suggests that the best leaders are those who can communicate effectively, those who are persistent and hardworking, those who have self-awareness and have the ability to take risks. We asked our interviewee his views on the best styles of leadership and he said that his natural style was that of an autocratic leader. However, he believes it is important to have the ability to adapt between the different types of leadership given the situation you are in. He believes that the autocratic style is most useful as it gives the team a better sense of direction.
Of the six types of leadership, different people will be better suited to different styles. In certain cases, people just need to be told how to achieve the goal (a clear path), and there are other people who you can coach (how do you think you are going to achieve the goal?). “Managers who provided three or more hours of coaching per month per sales representative achieved 107% of their sales goals” (Otterbein and York 2006).
Your leadership style impacts directly on the motivation of your team. Some of the best managers give free reign to their team to meet their objectives. Our interviewee thrives where he is given leadership responsibilities. In some cases, if people are motivated to keep their job, they will be motivated to do their job. However, this doesn’t always achieve the best results. On the contrary, you will have others who will want to do well at their job and thrive for perfection. It is important to apply a certain leadership style in a given situation to motivate the team to achieve excellent results. If the team are not motivated, results will drop.
His views on leadership agree with Goleman’s views and can be summarised in Goleman’s golf analogy – “over the course of a game of golf, a golfer chooses clubs based on the demands of the shot. That is how highly effective leaders also operate”. Goleman believes that the best leaders are those who have mastered four or more styles. “Salesforce motivational strategies are always associated with incentives, but the work of Adams emphasises that the elimination of disincentives (injustice, unfair treatment, favouritism) may be a powerful motivational strategy” (Amue Gonewa John 2012).
With respect to the theory of management and our interview, we believe he falls under the category of a transactional leader. He identifies and clarifies job tasks. He is a leader who communicates how to successfully execute the tasks along with providing regular feedback. Transactional leadership is the most frequently used leadership style in the sales industry. Engelbert Tjeenk Willink (2009) believes that there are two personas when it comes to leadership, “the many transactional managers who are simply waiting to be unleashed and the very few transformational leaders with the knowledge of how to unleash them”. He believes that transformational leaders should lead instead of the pre-dominant transactional leader, as they are the people who can be “empowered to become leaders who dream, create and transform”.
Ethics
In recent years, much research attention has been directed to ethical issues in marketing, the selling arena in particular. This focus has come in response to highly unethical business practices from a number of different large corporations, including Mattel, Enron and the pharmaceutical giant Merck (Burnett et al. 2008) (Lyon and Mirivel 2011). Although these types of scandals result in huge losses for the companies involved, many organisations today still choose to follow a work ethic in line with the words of Mark Twain, who once said, “The secret of success is honesty and fair dealing. If you can fake these, you’ve got it made.”
Salespeople are a fundamental part of any organisation. They are heavily relied on as major, if not the sole, revenue generators for a firm. They often work in unsupervised conditions, operating at the nexus of the buying and selling organisation. Therefore, the very nature of this job fosters a “laboratory of ethical scenarios” (Wotruba, 1990).
Theoretical frameworks in sales and marketing ethics affirm that ethical decision making is a multistage judgement cycle, which occurs when an individual is faced with a situation which could result in moral ramifications (Ferrell and Gresham, 1985; Valentine and Barnett, 2007). The ethical values of an organisation, and how these standards are perceived by employees, act as key influencers in this decision making process.
Brian agreed with this theory and when asked about the ethical culture of his company, he spoke of their “ethics oath”. Internally, the “credo” is used by employees as their moral compass, which guides their decision making process on a day-to-day basis. It outlines how the company is accountable to a variety of groups, “Our first responsibility is to the doctors, nurses, patients, parents and all who use our products. Next comes the responsibility to our employees, followed by the communities in which we serve. Our final responsibility is to our stockholders”.
In light of recent unethical pharmaceutical practices, we were interested to learn more about pharma sales representatives and their interactions with healthcare professionals. According to the literature, doctors prescribing habits are influenced by drug reps, who provide gifts, meals and samples, or by paying for their education programs – “Doctors deny it, but the evidence is clear that these financial relationships lead to significant increases in prescribing and sales” (Thomas 2012). Cialdini expands on this, stating that pharma companies use the rule of reciprocation to influence prescribing – once we are given a gift, we feel indebted to the giver. Our interviewee agreed that there was once a time where you could take doctors on weekends away or buy them gifts, but this has all changed now, and there are regulations and procedures in place to ensure this does not happen. He also explained that in Ireland, his company “no longer give out free samples to doctors”.
The Changing Environment of Sales
New developments and trends in selling and sales management are forcing firms to adapt and perform to new approaches and ways of conducting business. In today’s business environment salespeople are required to do more in less time and technological advances have become an integral part of the personal selling and sales management process (Rapp et al. 2008).
Recent studies have found that customers’ expectations of salespeople and their organisations have also increased dramatically over the last number of years, particularly in relation to “…speed of response and breadth of communication…”. In order for sales representatives to keep up with these changing needs, they are expected to “know more – faster” (Jones et al. 2005). Our interviewee explained that the new “always-on” communication technology allows them to do this, however, this may not always be a good thing. “Because we can now access emails directly from our smartphones, at any time, no matter where we are, I often find myself responding to emails into the early hours of the morning”.
In another pharmaceutical company the sales team have recently upgraded from their Blackberry mobiles to iPhones as they have noticed that the majority of their customers use iPhones. The company has developed mobile apps that aid the physicians when administering assessment scales and when the account manager is on a sales call, he can demonstrate the effectiveness of the apps. This adds to the overall perception of the value added by the sales rep and represents a shift in the perception of the usefulness of technology in the sales function.
Our interviewee mentioned that his company are moving towards the use iPads for use in sales calls. “It is critical that our account managers deliver their presentations and relevant information quickly and efficiently to doctors – sometimes they might only have a couple minutes”. “We are running a pilot scheme at present to see how this technology works for us”.
Conclusion
To summarise, we compared and contrasted the differences between the sales theory, from textbooks and academic journals, with the sales practice, which we discovered through our interview, in the context of the pharmaceutical industry.
The psychology of sales seems to differ not only between theory and practices but within the theory itself. The psychology of sales is up for debate and could be argued on a number of different levels. Psychology is dependant on people’s own experiences and their own beliefs, however, unfortunately there is no way of proving one is better than the other. Of course, the theory may conduct systematic tests on a number of different salespeople with alternating experience, but most of the times the results are inconclusive or different. Therefore, its a grey area and there doesn’t seem to be one justified correct or incorrect answer, to most of the questions it poses.
In relation to the sales process itself, the theory appears to be almost exactly as it applies in the real life situations. The only notable difference is, as mentioned earlier, in the pharma industry the process becomes a continuous, repetitive cycle with the aim of building strong customer relations for the long term. However, theory states that perceived customer dependence on the salesperson can give influential power to them. Our interviewee disagrees with this and he believes that the salesperson actually holds the lowest influence because physicians are too accustomed to meeting reps from every company. Also, building relationships is essential to key account management according to the theory and he agreed with this unequivocally.
The various theories of motivation can be applied to practice as we have demonstrated above. The factors that motivate our interviewee and his team can be explained through the motivational theories. The theory also states that effective leadership combines the various styles of leadership when needed. He commented that he was an autocratic leader, but he realises the need to use different styles depending on the situation – this conforms to the theory.
Ethics is a grey area, especially when it comes to pharmaceuticals. However, as recommended in the literature, his company implement a code of ethics. These values are engraved in the heritage of the company and according to the theory and as agreed by our interviewee, help ensure the sales team make ethical decisions when selling. Finally, as suggested by the theory, in order to meet increasing customer demands a company must be able to interact quickly and efficiently at any time with its customers.
To answer our research question, we found that the theory of sales is not fully reflected in the practice of sales in the pharmaceutical industry. The gap is evident and perhaps always will exist in the sales function.
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