Overcoming sales productivity leakages

25 October 2017

Overcoming sales productivity leakages

Many pharmaceutical companies experience what we call “productivity leakages” i.e. productivity losses due to inadequate SFE practices. Customer targeting for example is a typical culprit; lack of robustness in the profiling and segmentation process, followed by low buy-in from the sales force and sub-optimal allocation of resources are common issues. These productivity leakages take potential revenue away and often decrease ROI.

This is especially true in emerging markets where SFE is not yet so developed. These productivity leakages can be found across the entire SFE spectrum (and often don’t come in isolation). Common issues include:


SFE driver

Common issues


Customer targeting
  • Unclear segmentation strategy
  • Poor questionnaire design
  • Poor execution of customer profiling
  • Use of flawed, incomplete or inaccurate 3rd party data
  • Faulty customer segmentation methodology
  • Subjective classification of customers
  • Poor implementation
  • Poor maintenance
  • Poor monitoring
  • Customers are not properly segmented (an “A” might not be a real “A”)
  • Lack of buy-in
  • Lack of engagement
  • Resources are not properly assigned
Territory design
  • Workload imbalance
  • Potential imbalance
  • Unworkable territories
  • Too little or too much workload in the territory leading to deviation from the sales strategy
  • Very different workload and potential across the sales force leading to a decrease in motivation
Resource allocation
  • Insufficient or excessive number of Medical Representatives
  • Sub-optimal allocation of resources across products
  • Highly complex sales force structures
  • Sales targets are not met
  • Increase in costs
  • Deviation from the sales strategy
  • Sub-optimal launches
  • Sales management becomes tricky
Sales incentives
  • Unclear target setting governance
  • Inaccurate or biased target setting
  • Top down approach ruled by negotiation
  • Little or no participation of First Line Sales Managers into the target setting process
  • Poor communication of sales targets
  • Poorly designed and/or exceedingly complex incentive schemes
  • Incentive scheme in conflict with the sales strategy
  • Poor distribution of target achievement
  • Low meaningful engagement rates
  • Misalignment between incentives and sales outcome
  • Decrease in motivation
  • Lack of engagement
  • Increase in turnover
  • Sales targets are not met
  • Financial risk increases
Monitoring and KPIs
  • Inadequate selection of KPIs
  • Misalignment with company strategy
  • Poor monitoring of sales force activity
  • Deviation from the sales strategy
  • Root cause for failure cannot be identified
  • Negative impact on performance management

And the list goes on. Each of these taking a bite on the potential revenue (or margin). The good news is that we, SFE practitioners, can address and fix many of these leakages. Some are easy to fix: setting the right KPIs, defining a robust target setting process and designing fair and balanced territories are usually quick wins. Some fixes might require more time and effort. Achieving a robust customer segmentation (where an “A” is really an “A”), for example, might require a few runs.

Where to start?

We advise companies to conduct a detailed assessment to understand where they stand on the key sales force effectiveness drivers. Companies need to identify what is working and what needs fixing.

Companies then need to define productivity enhancement priorities and the “sequence of fixing”. A good tool to facilitate the discussion is to map “impact” versus “ease of implementation”. We define impact as the benefit achieved by fixing the leakage. The impact must be aligned to your business goals; e.g. increase revenue or decrease costs. Ease of implementation is usually a blend of several variables like investment required (to fix the leakage), level of decision making (how many people I need to involve to fix this? What is the level of autonomy required?), timing (how long will it take to fix? How long will it take to show results? Can I wait so long?) and degree of change management involved (revolution or evolution?). For our discussion we can use three levels (low, mid, high) for both axis. We also need to include the dependencies into the picture; example: we might want to fix our customer segmentation before designing sales territories.

A comprehensive and realistic action plan should follow. Watch out your pace. A steady walk with periodic, visible wins usually works better than a sprint.

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