Pharma Sales Reps going Freelance in 2012? Will Social Media be the Enabler?
Richie. A. Bavasso, President of Exploria Sales Performance Solutions discusses the revolutionary way in which social media could change the field sales landscape.
The pharma sales rep will become a freelancer for hire this year, says Richie A. Bavasso, President of Exploria Sales Performance Solutions. Speaking at our recent Barcelona 2012 conference, Mr. Bavasso outlined his vision for the future of the ever-changing sales landscape.
His presentation, “Virtual Private Social Networks” (VPSN) introduced the concept of a self-employed, independent rep to a captivated audience, and while the concept of this may make some people feel uneasy, Richie is confident not only of the direction, but that it will become a reality this year.
“I have been very surprised by the reception from the pharmaceutical C-Suite.” Says Richie, “I’ve got companies who are interested in doing it, funding it. I foresee initial start-up in 2012.”
Bold words given our industry’s reputation for procrastination. However, sitting down with Bavasso, it’s impossible to doubt the man’s passion and enthusiasm on the subject.
“In studying business to business commerce in social media, I began to observe some trends and concepts that translate well to the pharma business model, namely, significantly reducing cost of sales while maintaining or improving revenues by reducing the field force globally to one field force shared by all pharma companies. Next, only paying reps for performance and the performance is defined by "I’m standing in front of a doctor". If I’m doing anything else but standing in front of a doctor, I’m not getting paid. And finally, the reps are all independent entrepreneurs, they work for themselves and what they sell is access to the customer, that’s what they sell and that’s what Pharma wants.”
While big pharma might already be comfortable with partially outsourcing their sales solutions through the use of CSOs (Contract Sales Organisations), Richie’s model presents a unique opportunity – hire the top guns of the sales force community on a freelance basis and let the free market decide who will prevail as the “best” reps.
“Any sales executive will tell you that the best reps are always the best because they meet the same universal criteria – they are trusted by and bring value to the prescriber,” adds Bavasso. By implementing such a performance-based business model, the potential savings to the industry could be astronomical. However there is at least one issue to be addressed, as Richie points out:
“Is pharma willing to give up ownership of the rep to get access to the customer? That’s the question they have to answer.”
We already know the pharma sales industry is in a state of flux, with customer access in ever decreasing supply and the hasty, 90 second pitch. But very few seem prepared to really speculate on the solution.
What’s the incentive to even think about this? Bavasso explains: “I referred to the MediMix study in my presentation that stated that only 30 percent of doctors continued to see reps regularly. Contrast that with the metric that 70 percent of doctors want to engage in dialogue with pharma and see great value in the exchange. Think about the dichotomy! So the point is; the current model doesn’t work. Even in the thirty percent of the time where the doctor allows it to happen, it’s still not working.”
Bavasso adds, “It is startling to me that given the recognized inefficiencies of deploying and supporting a live field force, Pharma is replicating the same model in emerging markets and expecting a different result.”
“The inside joke among sales professionals is that pharma reps are not actually sales people. They don’t sell anything, and that’s the scary part.”
While I remain sceptical about the likelihood we’ll see a “freelance-for-hire” model any time soon, the idea has great appeal for this reason if no other – it puts the focus back on expertise and performance-based success. Those who will thrive using such a business model will be those individuals who provide the best ROI.
Using his two colleagues as unsuspecting victims, Richie paints me a picture of just how competitive this industry could be - using an online rating system for freelance reps:
“Pharma will be able, at any point in time, to get a full view of the transaction between rep Melanie, and Dr. Dave. It will be real time and the doctor will rate the interaction every time they meet. I’m going to see Dr. Dave’s rating on the entire transaction from intro, to detail materials used and how they are used, to sample drop right through follow-up. Reps will be using this system as well to decide with whom to collaborate as one rep may have access to a customer but may not have the subject matter expertise. Reps can collaborate on sales and share commissions. So if Melanie does a bad job that reflects poorly on her as well as reflecting poorly on the Pharma Company. The first rule of social media is reputation management. There’s high incentive for everyone to do a good job by a certain set of criteria.”
So will we see some version of Richie’s sales model in the field by the end of 2012? What are your thoughts regarding the potential positives and pitfalls it might present? I myself remain sadly sceptical; however in a time when more people seem to have questions than answers relative to Pharma’s struggle with a new business model, it does provide a possible and interesting solution to Pharma’s on-going sales woes…
For more predictions on the future of the Pharma sales force take a look at SFE USA 2011: The future of the sales force. If you'd like to know more about Virtual Private Social Networks, Richie Bavasso will also be speaking at SFE USA 2012 in June.