Send ‘Em Packing: How To Reward Those Sales Reps
8 CommentsBy Ed Silverman // March 13th, 2008 // 9:56 am
Many long-suffering detail people are not in vogue in an era of thinning pipelines, patent expirations and sagging stock prices. Some are being tossed overboard. Still, what drugmaker can do without at least a few conscientious reps? To reward them for helping to keep the sinking ships afloat, most drugmakers dole out free trips, according to a recent survey. In fact, travel is the preferred incentive for high performers among 91 percent, while cash and gifts are handed out by 64 percent.
“Travel incentives are perceived to have a greater impact on long-term performance and retention than cash alternatives,” according to Best Practices, a research firm, which queried execs from nearly two dozen drugmakers. By rewarding top performers with a free trip, which often involves allowing the rep to bring a guest, employers say “luxurious, exclusive and unique” experiences create a lasting memory. And drugmakers ought to know.
UPDATE: A reader writes in to ask how this may compare with other industries. The survey compared pharma with a group of 50 so-called benchmark companies, which included drugmakers as well as American Express, Nationwide Insurance, Marriott, Unisys, Vanguard, Electrolux, Cargill and PNC Bank. The benchmark group awards 78 percent of its top tier sales reps with trips, 48 percent with cash and 30 percent with gifts.
Dan
Long suffering detail people? Your vocation is a unique combination of acquiring the traits of silence and obedience.
Lichtstrasse 35
This seems a bit unfair, unless you have the research that shows that pharma companies use trips as sales incentives at a statistically significant higher rate than other industries that provide incentives to their sales people.
Ed Silverman
Hi Lichstrasse 35
That’s a fair question, although I think the information is interesting by itself. In any event, I updated the post with info from the survey, which did compare pharma with a benchmark group that mixed drugmakers with big names from other industries. I don’t know that this answers your question entirely - probably not - but perhaps this helps a little.
Regards
ed
Doc
Most companies award the trips to their top 10-20% of sales reps. Most also use those forced rankings for performance evaluations. Wonder if the average patient knows that their doctor is being ‘educated’ by primarily non-medically trained people who are incentivized to win cash, trips and prizes. But more importantly, know the ability to keep their high paying job depends on achieving some RX or dollar goal. Does this system lead to excellent patient care and putting patient well being first?
Chris
Doc,
Excellent patient care and putting patient well being first is the job of the medical professionals treating the patients, isn’t it? The system isn’t perfect for certain, but detailing and promotion are only a part of it. Because reps have incentives to perform doesn’t mean that medical professionals have to act on the reps’ requests and recommendations.
Doc
Chris,
I’ve been deep in the big pharma business for over 25 years. Yes, it is the doctors responsibility to treat patients, but it is also the manufacturers responsibility to assure fair and balanced promotion. That happens too infrequently by big pharma. Are there individual reps and marketing/sales people that have patient well being first? Yes, but there are too many that have their paycheck, bonus and next award trip in first place - in spite of affect on patients. There are also too many reps that have a narrow and shallow medical background, they don’t fully understand patient co-morbidities, only what their great product does. And you are correct that detailing and promotion are only a part of the system, but with IMS data, fear of being fired for ‘low performance’, and the billions of dollars spent on detailing and promotion - they are a significant part of the system and have a significant impact on prescribing behavior regardless of what my MD collegues think.
Lichtstrasse 35
Thanks for the clarification, Ed.
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