DTC water cooler: Are sales reps irrelevant?
Companies that provide value-added services, like giving physicians transparent and credible data, will shine as the role of the traditional sales rep fades
By on Sep 16, 2010Companies that provide value-added services, like giving physicians transparent and credible data, will shine as the role of the traditional sales rep fades
Over the past year, I have been doing some work for a new biotech startup company in the San Francisco area of California.
They are funded by venture capitalists, and they are almost ready to submit their new drug application to the FDA.
Over the course of the year, I have led market research to see if we can get answers on a better way to reach both consumers and health care professionals with health information.
As I dove into their business plan, I noticed that a considerable amount of money was budgeted for the hiring and training of some 100 sales people.
The budget for sales people included salaries, cars, and expense accounts, but what I really wanted to find out was whether this was the best way to go.
We decided to do some market research with both primary care physicians and specialists in five cities, and what we learned changed how we thought about the sales function within big pharma.
We had primary data from various sources indicating that the number of physicians who meet with sales people is actually declining. (For more on the future of reps, see What's next for sales reps?.)
In addition, we heard that when they do meet with sales people physicians often get frustrated because they often cant have peer-to-peer conversations.
They come in with a playbook and unless your question is in that playbook, they often dont have the answers you need and want, one physician told us.
In listening to physicians, we also learned that they are spending more time on the Internet.
Sometimes, this is not by choice; its because they are having a hard time sorting through the breadth and depth of information online.
Based on this, we came up with a new approach: What if salespeople were not salespeople at all?
What if we hired people with medical degrees and backgrounds, gave them their own regional websites, and asked them to provide information to physicians rather than to sell to them?
The information could be links to journal articles, clinical studies, or peer-to-peer conversations with thought leaders.
In other words, these people would be company medical communication specialists who would be compensated on their ability to disseminate information to HCPs within their area. (For more on new kinds of reps, see Retraining reps to sell new technologies.)
It sounded good, but would it work? We decided to test the concepts with some physicians and, frankly, we were not prepared for the overwhelmingly positive response we received.
You mean, this person would not sell me but rather provide me with credible medical information? one physician said, as if he didnt believe it.
Another said, Talking to someone who has a medical degree instead of a business degree could allow me to get into some serious discussions.
But the key question was, How would physicians perceive a new biotech company that took this approach?
Again, we heard a lot of great things.
Anyone who can provide me with a way to cut through all the information and get me what I need gets a star in my book, a physician with a big practice in Denver told us.
We were energized by what we heard, and when we got back to the office we immediately sat down and looked at the difference in costs between hiring and training 100 salespeople versus hiring and training 25 to 30 medical communication managers.
When we did our spreadsheet analysis, it looked like the company could save over $4.5 million on launch, plus provide a value-added service to the healthcare professional community.
The Internet can be both a blessing and curse to those trying to cut through the clutter of health information to get what they need.
It doesnt do any good to have an encyclopedia that has a lot of information if there are over 1,000 books in the set.
We keep hearing about the semantic Web that can predict what we want and help us get it faster, but privacy concerns have delayed that feature for a long while.
Google sees a future in which physicians can enter data on patients symptoms and get a list of possible reasons along with recommended tests to be performed.
That may have some value, but with all the data out there we are reminded that what we know is not really what we should know.
Companies that can provide value-added services, like helping physicians by providing transparent and credible data, are going to stand out at a time when traditional sales reps are becoming a relic of the past. (For more on the role of reps, see Are reps still relevant?.)