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

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

Report Summary
Best Practices, LLC

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

Best Practices, LLC

Copyright © Best Practices®, LLC ®
1 BEST PRACTICES, LLC

Table of Contents

Project Overview
Key Insights
Detailed Findings
Appendix
About Best Practices


Project Methodology and Study Objectives
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.
Research 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 study will help
define the most important current and future roles of the district sales manager to
drive 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.

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)

Range of Career Levels Lend Insight

From seasoned executives to managers full of ideas, the range of respondent titles
suggests depth and breadth of perspective on the future of district sales managers.

Associate Director, Field Development Head, Sales Training
Associate Director, Field Sales Mgmt Development Manager, First Line Sales
Associate Director, Sales Operations Manager, Global Sales
Associate Manager, Sales Training & Development Manager, Learning & Development
Director, Business Unit Manager, Marketing
Director, Field Sales Manager, National Market Development
Director, Global Selling Effectiveness Manager, National Sales Force
Director, Marketing Manager, Sales
Director, Mgmt Development Manager, Sales & Marketing
Director, Payer Strategy & Non Professional Promotion Manager, Sales & Marketing Training
Director, Platform Development Manager, Sales Training & Development
Director, Sales Manager, Training
Director, Sales & Marketing Excellence Manager, Training & Development
Director, Sales & Training President, US Operations
Director, Sales Effectiveness & Operations Regional Director, Sales
Director, Sales Operations Regional Manager, Sales Force Excellence
Director, Sales Strategy & Effectiveness Senior Director, Mgmt Development
Director, Strategy & Operations Senior Director, Sales
District Manager, Sales Senior District Manager, Sales
Executive Vice President, Sales & Marketing Senior District Manager, Specialty Sales
Global Manager, Sales Force Excellence Senior Manager, Mgmt Training
Head, Business Intelligence Vice President, Organizational Development
Head, Organizational Development & Talent Mgmt Vice President, Sales & Marketing
Head, Sales Excellence Vice President, Sales Operations

Key Insights


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.


DSM Future a Chief Concern for Pharmas, Biotechs
Most respondents answered the survey on behalf of a pharmaceutical or
biotechnology 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


2007 Sales Force Size at Participating Companies
Benchmark participants represented sales forces ranging in size from 28 for a single
specialty product to 8,500 for the entire global field staff. The average sales force
represented 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


2007 Number of Sales Reps and DMs
On average, benchmark participants represented groups with nearly 1,400 reps and
more than 160 front line district sales managers. In the groups represented by
survey 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


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

Two Years Ago, Change Signals Began Lighting Up
Half of research participants were completely overhauling their sales models within
the next few years. As many as 84 percent had recently experienced or currently
anticipated 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 this

Increased 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!

DM Training is Evolving to Enable Change
Training curriculum must evolve to enable the DM to be effective in shifting to new
roles 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 old
model; 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

Broad Training Needs Seen for DMs
Training needs identified through field research range broadly from leadership and
business skills to regulatory issues and evidence-based medicine competency.
District sales managers most often prescribed analytical and business management
training 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)”

DM Success Dependent upon Rep Success
Employee 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

Key Insights for Reflection & Action Planning
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.

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.

About Best Practices, LLC
Best Practices, LLC is a research and consulting firm that conducts work based on the
simple yet profound principle that organizations can chart a course to superior
economic performance by studying the best business practices, operating tactics, and
winning 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


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

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