Secrets of success for a value-based KAM model in Pharma
Value based selling is (finally) coming to pharma. A few forward-thinking pharmaceutical companies are trying this new approach to Key Account Management, calling it Value Based Engagements or Partnerships for Healthcare Value (PHV). But what does it take to it pull off? Pharmaceutical...
By on Feb 19, 2010Value based selling is (finally) coming to pharma. A few forward-thinking pharmaceutical companies are trying this new approach to Key Account Management, calling it Value Based Engagements or Partnerships for Healthcare Value (PHV).
But what does it take to it pull off? Pharmaceutical companies have approached value-based selling with payers or large institutions and provider networks in different ways, and some best practices are emerging:
Position KAM/PHV as beginning a fundamental change in doing business.
PHV are not easy. In our experience, they cannot be achieved by sending a group of representatives to account management training courses and then turning them loose. Downplaying the importance of the required change slows momentum and sets salespeople up for failure. The sales organization will not achieve a real transformation because the sales force believes that we are basically doing this already, or that creating these partnerships will be easy.
Expect skepticism at the beginning.
This is a logical consequence of positioning the value-based approach as a fundamental change. There is no presentation or training program thatalonewill compel the organization to adopt the required behaviors. PHV are so different that people need to experience them firsthand and see the benefits, and get into the nuts and bolts of doing it. This is necessary to make the hard work required of this model seem worthwhile, instead of just a lot of administration and hassle (a prime killer of KAM initiatives). The best way to create a firsthand experience is to start with only a few KAMs and customers, then expand to other members of the account team as the early adopters become advocates for the new approach and mentor peers.
Anticipate and allow time for change.
Evolving to a value-based KAM model is not a quick initiative. Thoughtful and comprehensive change management is critical. Providing mentorship for the best, to let them experience and then endorse it, and providing a clear timeframe for the rest to follow in others footsteps produces the best results. Hold the line on role and performance expectationsthe new KAM job is very different than the old KAM job, and not everybody will succeed.
Manage customer expectations very carefully.
Share the vision, journey and uncertainty with customers. Build innovative programs and experiment together looking for win-wins. Agree from day one that if it is not a win for both, you stop doing it. Dont promise too much. We have seen companies get into trouble with PHV when they could not live up to the expectations they had created: The rest of the organization was overwhelmed or was not ready for PHV, or the KAMs were not careful in their interactions and were not taught how to manage expectations appropriately. This is another reason to start with a small team, and expand only when your organization is ready.
Dont wait for technology before you try it.
It is too easy to fall into the technology trap. We will have this new CRM system and then we will be able to do all these wonderful things is something we hear far too often. Systems may be helpful to track valuable customer information or new metrics, but they will not create win-win solutions or build strategic partnerships. They will not of themselves change behaviors or belief. Low tech is faster, more flexible and less expensive in the beginning. Bring the technology along as Step 2. Dont let it be the first step in your journey!