Want A Good Sales Rep? Poach From Your Rival
9 CommentsBy Ed Silverman // March 4th, 2010 // 8:23 am
A recent survey among drugmakers found that 91 percent view other drugmakers as the place to go for finding sales reps and 68 percent believe reps from other industries are preferable to people in their own companies who lack sales experience. Moreover, 83 percent value pharma sales experience more than interpersonal skills or business acumen.
The survey, which was conducted by the Hay Group and appeared in Pharmaceutical Executive, also found that 80 percent of companies adjust salary scales annually and more employers are using market data to set pay levels. The average increase in salary structures held steady between 2008 and 2009 at 3.3 percent, while the average merit increase of 3.3 percent was slightly less than the 3.9 percent average offered in 2008.
Another nugget - most incentive compensation plans across the sales organization are based on three performance metrics. Prescription volume, market share, and revenue attainment continue to be the primary criteria for determining incentive compensation payout, with qualitative measures most often used secondarily, according to the Hay Group. And across all plans, the most common qualitative measure is selling skills/call quality, followed by territory management and teamwork.
pharmavet
Becoming a drug rep in 2010 is what we in the industry call a CLM-Career Limiting Move. Here’s why:
1) Being a drug sales rep isn’t really a selling job. The point of sale these days is with the insurance company or managed care plan, not with the rep. The only sale is the food that the rep buys for the office, without which he/she doesn’t get past the front door. Unlike traditional sales jobs, where a salesperson has to hustle to make a commission, there are no commissions for a drug rep. Furthermore, due to the current state of pharma health, there are far fewer “rewards” (i.e. free trips) for well-performing reps.
2) One reason for all of the poaching is that, per #1, just about the only “sales” job a rep can get is to stay within pharma. As soon as they begin to look outside pharma (i.e. devices), they soon learn that their “selling skills” count for zilch.
3) With global pharma downsizing, there are more reps competing for fewer pharma jobs.
4) Within 5 years all pharma rep jobs will be outsourced to contract companies. Reps will have to pay for their own benefits, which these days counts for about 30% of the salary of a full time equivalent. Thus, for example, a pharma rep who made $100,000/yr with benefits was actually earning $130,000/yr. When that same rep goes to work for a contractor, he/she will probably make about $75,000 without benefits. This equivalent to an overall reduction of 42% in salary and benefits.
5) Therefore being a drug rep is a CLM.
JediMindTrick
As usual, only partially right Pharmavet. Your comments in section one seem to indicate your vet status came purely from primarcy care. If so, I understand your limited view of the world (still think reps are about reach and frequency or they do dash and dines?)but surely you realize that their are many nimble, high moxie selling studs in the specialty business (IV antibiotics, oncology, inflamation and trauma) that have never brought in lunch. They access their customers through clinical value. The problem is that their own companies are now cracking down on their use of pharmacoeconomic outcomes data, but they don’t get past the front door because they spend their time in the OR, surgery suites or units with their customers. The fat receptionists that you may have dealt with in primary care don’t even know these sales people exist.
As for point 2, the same people go back and forth from Medtronics to Genentech to Pfizer to Stryker, etc. The people willing to move product only care about selling skills, not labels.
Point 3: spot on.
Point 4: spot on.
Point 5: for the masses, correct. For the elite, not so.
pharmavet
Jedi, you are correct about specialty reps. I knew a talented orthopedic device rep that has the best access in the world. The surgeons let him scrub in on a spine case and he actually helped the surgeon insert a stabilizing rod. I have no reason to believe that this guy would BS me, although I doubt that his name will show up on the operative summary. In another case I heard of a vascular rep whom the invasive cardiologist allowed to place a new form of drug coated stent, although I haven’t received a confirm on that.
You are correct about reach/frequency. Any rep who is skilled enough to insert a spinal rod doesn’t need reach or frequency. Word of mouth will get him all the face time he wants.
BTW, my uncle, the primary care doc tells me he misses the days of dine and dash but especially gas and go, since oil prices are on the rise again. He tells me that one tankful will guarantee a 15 minute face time detail. I told him I’d have to check since I’m away from that area currently.
Can anyone tell me if any primary care reps are still doing gas and go? My uncle would appreciate it. He’s currently spending $51,000 to put his niece through an Ivy League school.
Sean
As a pharm rep, I fully agree that there isn’t a pure selling cycle in pharmaceutical sales as with device, copier or hardgood sales. However, for the right individual, there are some demonstratable skills in the job that are extremely transferable and bigger than just getting another sales job. Specifically, the skill and talent of impacting and influencing individuals that are highly educated and there is no clear line of authority. Many companies outside of pharma, and sales in general, are looking for talented individuals that can impact and influence other employees across cross functional teams and within a matrix environment.
I always ask other sales people “What’s harder, knowing you have the sale or not…or trying to influence person where the confirmation of the sale is usually delayed or vaguely implied, and then returning a week later to try again.” Each type of sale requires skill.
Regarding your other points, I do agree the role of the rep is becoming limited and the chances of complete outsourcing is high. Many companies will probably retain a core sales force to allocate as needed for launches, key accounts or learning institutions. In the end though, the idea of a career as a rep is over.
JediMindTrick
Pharma companies don’t do anything close to that. Sorry, your uncle has to buy his own gas. Pharma can’t even give out a pen, scratch pad…anything that doesn’t have demonstratable education content like a text book. Those days are over and have been for 3 years. They can give out fancy version of the package insert and use ridiculous computer versions as well, but I’m a bit removed from it these days. I can tell you more about device.
pharmavet
Sorry to hear about that, since pharma reps are known to top off their own tanks on the company’s dime.
Ched
Experience is a good reason to hire someone, but so is potential. If you see someone who has good potential, hire this person immediately, because this potential has a huge chance of converting to real sales.
P.S. Granted, making the sale depends largely on who is working on it, but there are fundamentals that these people will have to learn. It isn’t just about personality, you know. Read about emerging sales trends in 2010 here http://budurl.com/ybru. It just might help you reach the quota.
Bman
It really is a joke when I see people blast other for doing a job that they may be pretty good at. I do not quite understand why one would feel the need to knock somone for doing what they need to do to drive business. Its rather interesting to say the least. I have a friend that works in the beverage industry and
calls on clients that may not be on the level of a doctor. Hear is my point If you need to wine and dine to get business and you make quota, you get paid, Bottom line, the smart reps know how to balance clinical selling with promotion selling. so if you on the bash Pharma
reps get a life
John
Pharmavet, I think your comments about going into pharma sales being a CLM were right on target, as were your comments about massive outsourcing of pharma sales jobs. The only thing I didn’t understand was why you included the delimiter “sales” in your comments. Maybe you haven’t looked down the hall lately to see all the recently vacated R and D labs?