Trends and Future Directions for the High   Performing District Sales Manager       A Comparative View from 2007 and 2009 ...
Trends and Future Directions for the High         Performing District Sales Manager                          A Comparative...
Table of Contents            Project Overview            Key Insights            Detailed Findings            Appendix    ...
Project Methodology and Study ObjectivesThe district sales manager (DM) is the cornerstone of sales force effectiveness an...
Field Insights Span the Global Bio-Pharma Market  First-line field sales management insights were harvested from 94 sales ...
Range of Career Levels Lend InsightFrom seasoned executives to managers full of ideas, the range of respondent titlessugge...
Key InsightsCopyright © Best Practices®, LLC                                    ®                                     6   ...
Key Observations, Insights & Findings Field research surfaced various insights and observations that spotlight the acceler...
DSM Future a Chief Concern for Pharmas, BiotechsMost respondents answered the survey on behalf of a pharmaceutical orbiote...
2007 Sales Force Size at Participating CompaniesBenchmark participants represented sales forces ranging in size from 28 fo...
2007 Number of Sales Reps and DMsOn average, benchmark participants represented groups with nearly 1,400 reps andmore than...
In 2007, New Products Drove Sales Force Expansion Three-quarters of companies that expected growth in their sales forces i...
Two Years Ago, Change Signals Began Lighting UpHalf of research participants were completely overhauling their sales model...
DM Training is Evolving to Enable ChangeTraining curriculum must evolve to enable the DM to be effective in shifting to ne...
Broad Training Needs Seen for DMsTraining needs identified through field research range broadly from leadership andbusines...
DM Success Dependent upon Rep SuccessEmployee related activities, such as staffing, development, evaluation and retention,...
Key Insights for Reflection & Action PlanningField research surfaced various insights and observations that spotlight thea...
About Best Practices, LLCBest Practices, LLC is a research and consulting firm that conducts work based on thesimple yet p...
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Trends and Future Directions for the High Performing District Sales Manager A Comparative View from 2007 and 2009 Report Summary

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The district sales manager (DM) is the cornerstone of sales force effectiveness and high performance. As pharmaceutical, biotechnology, and medical device companies evolve, roles and responsibilities for DMs also must evolve to boost sales performance. Market pressures are changing the pharmaceutical sales model, and by extension the DM job role. Workforce reductions are decreasing the need for monitoring and coordinating sales representatives - it has become essential for organizations to define present and future roles and responsibilities of a DM to garner maximum sales growth. Research for this study was conducted through an online survey in 2009 to update 2007 survey data. Deep dive interviews in 2007 captured executive insights and best practices that are still applicable in today’s landscape. By identifying recent changes, new directions and best practices, this report can help define the most important current and future roles of the district sales manager to drive superior sales productivity and growth

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Trends and Future Directions for the High Performing District Sales Manager A Comparative View from 2007 and 2009 Report Summary

  1. 1. Trends and Future Directions for the High Performing District Sales Manager A Comparative View from 2007 and 2009 Report Summary Best Practices, LLC
  2. 2. Trends and Future Directions for the High Performing District Sales Manager A Comparative View from 2007 and 2009 Best Practices, LLCCopyright © Best Practices®, LLC ® 1 BEST PRACTICES, LLC
  3. 3. Table of Contents Project Overview Key Insights Detailed Findings Appendix About Best PracticesCopyright © Best Practices®, LLC ® 2 BEST PRACTICES, LLC
  4. 4. Project Methodology and Study ObjectivesThe district sales manager (DM) is the cornerstone of sales force effectiveness andhigh performance. As pharmaceutical, biotechnology, and medical devicecompanies evolve, roles and responsibilities for DMs also must evolve to boostsales performance.Research was conducted through an online survey in 2009 to update 2007 surveydata.Deep dive interviews in 2007 captured executive insights and best practices that arestill applicable in today’s landscape.By identifying recent changes, new directions and best practices, this study will helpdefine the most important current and future roles of the district sales manager todrive superior sales productivity and growth. Sales Force Growth & Reduction Drivers Detailed Sales Model Changes Physician Access Levels Critical DM Activities & Trends in DM Responsibilities Essential DM Management, Leadership & Competency Skills Impact of Pharma Model Changes on DMs Pharma Sales Rep Licensing DM Readiness for Change Slides with this symbol in lower left-hand corner are part of the initial 2007 study and are included for longitudinal and comparison purposes. Copyright © Best Practices®, LLC ® 3 BEST PRACTICES, LLC
  5. 5. Field Insights Span the Global Bio-Pharma Market First-line field sales management insights were harvested from 94 sales leaders from 46 different pharmaceutical and biotechnology companies across 24 different countries on six continents. Interestingly, most key themes cross countries and continents.Participating Pharma & Biotech Companies Partner Locations Algeria Belgium Canada Egypt Australia Brazil Croatia France Hungary Netherlands South Africa Ireland Pakistan Spain Japan Poland UAE Kenya Puerto Rico Ukraine SUHASINI IMPEX Malaysia Singapore USA (30+ Mexico responses) Copyright © Best Practices®, LLC ® 4 BEST PRACTICES, LLC
  6. 6. Range of Career Levels Lend InsightFrom seasoned executives to managers full of ideas, the range of respondent titlessuggests depth and breadth of perspective on the future of district sales managers.Associate Director, Field Development Head, Sales TrainingAssociate Director, Field Sales Mgmt Development Manager, First Line SalesAssociate Director, Sales Operations Manager, Global SalesAssociate Manager, Sales Training & Development Manager, Learning & DevelopmentDirector, Business Unit Manager, MarketingDirector, Field Sales Manager, National Market DevelopmentDirector, Global Selling Effectiveness Manager, National Sales ForceDirector, Marketing Manager, SalesDirector, Mgmt Development Manager, Sales & MarketingDirector, Payer Strategy & Non Professional Promotion Manager, Sales & Marketing TrainingDirector, Platform Development Manager, Sales Training & DevelopmentDirector, Sales Manager, TrainingDirector, Sales & Marketing Excellence Manager, Training & DevelopmentDirector, Sales & Training President, US OperationsDirector, Sales Effectiveness & Operations Regional Director, SalesDirector, Sales Operations Regional Manager, Sales Force ExcellenceDirector, Sales Strategy & Effectiveness Senior Director, Mgmt DevelopmentDirector, Strategy & Operations Senior Director, SalesDistrict Manager, Sales Senior District Manager, SalesExecutive Vice President, Sales & Marketing Senior District Manager, Specialty SalesGlobal Manager, Sales Force Excellence Senior Manager, Mgmt TrainingHead, Business Intelligence Vice President, Organizational DevelopmentHead, Organizational Development & Talent Mgmt Vice President, Sales & MarketingHead, Sales Excellence Vice President, Sales OperationsCopyright © Best Practices®, LLC ® 5 BEST PRACTICES, LLC
  7. 7. Key InsightsCopyright © Best Practices®, LLC ® 6 BEST PRACTICES, LLC
  8. 8. Key Observations, Insights & Findings Field research surfaced various insights and observations that spotlight the accelerated evolution of the bio-pharmaceutical sales model and the changing role of the first line district manager. Key findings include:MOTTLED VIEWS OF THE EVOLVING BIO-PHARMA SALES LANDSCAPE Overall Industry Hopes For Growth Remain: Companies expect to keep their sales forces flat in the upcoming year – and hope for growth remains with a majority expecting to increase sales staffs within three years. Field research reveals 53 percent of companies expect sales force sizes to increase. Products in development expected to hit the market, sales model changes, new therapeutic areas and customer segments to address will fuel this sales force growth.ACCELERATED EVOLUTION OF ALTERNATIVE SALES MODELS Alternative Sales & Marketing Channels Emerge: Rapid experimentation is occurring and myriad sales model changes are underway. The “revolutionary re are make” of the outside sales model has been overstated in terms of how quickly e-channels and technologies will transform. Customer Centricity Defines The New Sales Model. The majority of changes are occurring in territory size to better focus reps, to create individualize call plans for key accounts and to reduce how many accounts reps can call upon – all changes designed to deepen customer focus. Copyright © Best Practices®, LLC ® 7 BEST PRACTICES, LLC
  9. 9. DSM Future a Chief Concern for Pharmas, BiotechsMost respondents answered the survey on behalf of a pharmaceutical orbiotechnology manufacturer. Q2. Indicate which of the following types of companies you represent. Other, 6.5% Medical Device Manufacturer, 6.5% • Pharma/Biotech Technology Provider • Physician Recruiter/Placement • Pharma Product Exporter Biotechnology Manufacturer, 17% Pharmaceuticals Manufacturer, 70% n=46 % of Respondents Copyright © Best Practices®, LLC ® 8 BEST PRACTICES, LLC
  10. 10. 2007 Sales Force Size at Participating CompaniesBenchmark participants represented sales forces ranging in size from 28 for a singlespecialty product to 8,500 for the entire global field staff. The average sales forcerepresented by survey respondents had more than 1,500 employees. Q. Please estimate total number of employees in current field sales force 1,537 1,275 *The average sales force size has decreased by Number of employees less than 100 reps 543 from 2007 to 2009. 140 25th Median Average 75th (n=33) Percentile Percentile Copyright © Best Practices®, LLC ® 9 BEST PRACTICES, LLC
  11. 11. 2007 Number of Sales Reps and DMsOn average, benchmark participants represented groups with nearly 1,400 reps andmore than 160 front line district sales managers. In the groups represented bysurvey participants, the average number of sales reps per District Manager was 9.3. Q. What is the current total number of Reps and DMs in the group you represent? 1,600 1,397 *The span of Number of employees control for DMs Reps has increased DMs slightly, from 9.3 to 10, since 2007. 550 The average number of DMs has decreased. 120 151 120 50 15 (n=33) 25th Median Average 75th Percentile Percentile Copyright © Best Practices®, LLC ® 10 BEST PRACTICES, LLC
  12. 12. In 2007, New Products Drove Sales Force Expansion Three-quarters of companies that expected growth in their sales forces in 2008 and beyond also anticipated new product launches. Expansion into new therapeutic areas also was expected to drive growth. Q. Which of the following factors are key drivers of the expected growth? New products expected to launch 76% Moving into new therapeutic areas 32% New sales model *From 2010 to 2012, 24% moving into new therapeutic areas and New indications anticipated 20% addressing new customer segments are New customer segments (i.e., managed care) 16% expected growth drivers more so than in the past. Expanding into new regions 8% Sales force has not kept pace with corporate growth 4%(n=24) % of Companies Copyright © Best Practices®, LLC ® 11 BEST PRACTICES, LLC
  13. 13. Two Years Ago, Change Signals Began Lighting UpHalf of research participants were completely overhauling their sales models withinthe next few years. As many as 84 percent had recently experienced or currentlyanticipated some significant sales model changes. Q. Has your company made or planned any significant changes to its sales model? Accelerated evolution No Completed Change Change Total current Sales Model Changes within last ~18 underway but scheduled within planning plans for months not complete ~18 months change thisIncreased customer focus 41% 41% 3% 84% 16%Revised DM training 22% 38% 16% 75% 25%Alternative sales channel investment 10% 29% 32% 71% 29%Piloted new sales model(s) 30% 17% 23% 70% 30%Revised DM duties/role 20% 37% 13% 70% 30%Revised rep duties/role 29% 29% 6% 65% 35%New sales technology investment 19% 6% 26% 52% 48%Complete sales model overhaul 23% 17% 10% 50% 50% ½ benchmark class (n=32) companies plan full overhaul! Copyright © Best Practices®, LLC ® 12 BEST PRACTICES, LLC
  14. 14. DM Training is Evolving to Enable ChangeTraining curriculum must evolve to enable the DM to be effective in shifting to newroles in a rapidly changing local market. FLM Training Elements (Mentioned in Interviews) • Business acumen & Business Analytics • Business planning & Resource Allocation • Financial analysis – Territory P&L and Balance Sheet • Developing a strategy for the market. • Assessing state of local markets; • Key influencers in health care for state & market; • Working with local Managed Care entities • Using Health Economics & Outcomes Information • HR training to reflect multi-generational work force • Major account selling and account management • Dealing with C-level customers at local major accounts“Part of what we’re looking at doing…is more training for our DMs around business acumen, “Part of what we’re looking at doing…is more training for our DMs around business acumen,because there’s major change or aaparadigm shift. I’d say most of pharma is still in the old because there’s major change or paradigm shift. I’d say most of pharma is still in the oldmodel; even ififyou change the way you’re structured, you may not be changing the thinking.” model; even you change the way you’re structured, you may not be changing the thinking.” ––Director Sales Force Effectiveness Director Sales Force Effectiveness Copyright © Best Practices®, LLC ® 13 BEST PRACTICES, LLC
  15. 15. Broad Training Needs Seen for DMsTraining needs identified through field research range broadly from leadership andbusiness skills to regulatory issues and evidence-based medicine competency.District sales managers most often prescribed analytical and business managementtraining to prepare DMs for changing roles. Executive Quotes: Executive Quotes:DM Training Needs Specified by Participants: “Management development “Management development programs designed at the DM programs designed at the DM employee level” employee level”• Leadership skills • Strategy planning & “Well-laid training programs “Well-laid training programs execution to empower DMs in jobs” to empower DMs in jobs”• Coaching & motivation skills • Profitability mindset “Develop training programs to• Analytical & financial skills “Develop training programs to strengthen strategic strengthen strategic • Selling & recruiting perspective (acct mgmt) and• Change management perspective (acct mgmt) and business acumen” • Specific subject areas: business acumen”• Business management • Outcomes data “Develop “management “Develop “management trainee" positions as DM trainee" positions as DM• Diversity management • Evidence based stepping stone” stepping stone”• Scientific education medicine “Continued study and “Continued study and• Market & industry knowledge • Patient advocacy educational opportunities” educational opportunities”• Surviving a paradigm shift • Regulatory Issues “Analytical tasks (trends on “Analytical tasks (trends on regional market)” regional market)” Copyright © Best Practices®, LLC ® 14 BEST PRACTICES, LLC
  16. 16. DM Success Dependent upon Rep SuccessEmployee related activities, such as staffing, development, evaluation and retention,impact the successful performance of a DM. Q18. Evaluate the following management skills of your district sales managers in terms of their importance to successful performance. Highly Important Somewhat Important Not Very Important Not at All Important Employee performance management 92% 6% 2% (evaluation, development) HR management (staffing, retention) 71% 23% 4% 2% Organization 52% 44% 2% Information management (managing rep 48% 44% 8% communications) Budget management 31% 56% 13% Information management 29% 60% 8% Diversity management 23% 58% 15% 2% Project management 23% 46% 25% 2% • Negotiations, Strong Leadership Other 2% 4% • Communicating vision n=48 • Strategic analysis % of Respondents Copyright © Best Practices®, LLC ® 15 BEST PRACTICES, LLC
  17. 17. Key Insights for Reflection & Action PlanningField research surfaced various insights and observations that spotlight theaccelerated evolution of the bio-pharmaceutical sales model and the changing roleof the first line district manager.1. Overall industry hopes for growth remain - but one in three expect sales forces to shrink. Customer centricity is defining the new sales model.2. Business models experience accelerated evolution - not radical change or mass extinctions. Technology enables - but is not the “answer.”3. Training curricula are rapidly evolving and are central to readying DMs for change.4. DMs require greater strategic thinking and analytic skills to develop winning strategies in local markets.5. Evidence-based medicine, complex reimbursement systems and health outcomes data all are gaining importance.6. Generational differences challenge district sales managers - and should be addressed with training.7. Stricter regulations for bio-pharma sales professionals lie on the near horizon. Copyright © Best Practices®, LLC ® 16 BEST PRACTICES, LLC
  18. 18. About Best Practices, LLCBest Practices, LLC is a research and consulting firm that conducts work based on thesimple yet profound principle that organizations can chart a course to superioreconomic performance by studying the best business practices, operating tactics, andwinning strategies of world-class companies. Best Practices, LLC 6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517 www.best-in-class.com 919-403-0251 Copyright © Best Practices®, LLC ® 17 BEST PRACTICES, LLC

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