The life sciences industry in India

Life sciences sales — how qualitative incentives can help deliver success

The life sciences industry in India is undergoing a massive transformation. That shift is happening on many fronts, and is being driven by a wide range of scientific, technological, economic and social factors. In response, many organisations have had to overhaul their sales strategies overnight, as they try to keep pace with the dynamic realities of the market.

However, good sales strategies can only go so far. Companies need a well-trained and well-motivated sales organisation if their strategies are to be implemented effectively. Unfortunately sales teams in the Indian life sciences industry face multiple demands and challenges. This is because they now operate in a world of volatility, uncertainty, complexity and ambiguity (the so-called VUCA context).

One of the key challenges sales teams have had to face recently is the on-going COVID-19 pandemic. In terms of their sales and marketing, most Indian life sciences organisations have responded by altering their sales-performance parameters. They have done this in a way they hope will deliver their organisational objectives in the context of the new normal.

Figure 1 Organisations’ responses to COVID-19 challenges.

This begs a number of questions:

•  How does an organisation’s people function (its HR team) ensure that its sales force is properly motivated?
•  How can the organisation ensure that its sales force will adopt the right behaviours to achieve its allocated target revenue numbers?
•  How can a sales force play its part in implementing its organisation’s desired transformation process?
• How can sales performance parameters be balanced to maximise performance?

There is no one answer to these questions — or to the overall challenge they relate to. However, over the years, it has been observed that sales incentive plans (SIP) can be a highly effective strategy. SIPs can have considerable influence, as they reward individuals and teams for implementing a desired set of actions and for behaving in the desired way. Many organisations are therefore crafting SIPs designed to drive “desirable behaviours” amongst their sales teams and to reinforce their performance targets.

*A recent Mercer study, found that 75% of life sciences organisations have qualitative parameters built into their SIPs.

These parameters were included to ensure that:

• The quality of sales is maintained.
• The effort of the sales force is rewarded.
• Change management initiatives are successful.

These qualitative parameters include:

• Doctor/call ratios
• The level of adoption of virtual platforms and channels for engagement and content delivery
• Product knowledge
• Customer satisfaction scores
• Lead- generation results

While most of these qualitative parameters are common, some are only now coming into general use (for example, doctor/call ratios, the adoption of virtual platforms).

The way in which certain sectors of the Indian life sciences industry have incorporated these parameters into their SIPs is discussed in more detail in the sections below.

Doctor/call ratio

Our survey suggests that eight out of 10 pharmaceutical organisations look at doctor/call ratios to evaluate the performance of their sales representatives.

The doctor/call ratio provides a target for the average number of healthcare professionals that a sales representative must visit in a day.

A doctor/call ratio is incorporated into many SIPs for a number of key reasons:

•  Sales representatives have to meet healthcare professionals on a regular basis.
•  Regular communication between doctors and sales reps boosts  brand/product recall and creates demand for products.
•  Given the nature of the industry, it is imperative that doctors are constantly informed of the latest product launches, enhancements to existing products, etc.
•  Connecting regularly with doctors creates the best environment for secondary sales of products at the retailer/pharmacist.
•  Regular meetings help sales representatives to become invested in enabling doctors to serve patients better. Over time, they become partners in the delivery of healthcare products and services.

It should be noted that, while physical visits have long been the norm, in the post-pandemic world many organisations are actively evaluating online interactions, and considering whether to make them comparable with the in-clinic meetings.

Adoption of virtual platforms and channels for engagement and content delivery

Our survey suggests that about 19% of surveyed organisations are factoring in the adoption rate of digital content platforms into their Sales Incentive Plans.

• Organisations are tracking the pace of adoption of digital channels by sales representatives and healthcare professionals.
• They are providing incentives based on the adoption rate for reviewing content on digital platforms.
• Overall, many SIPs are being realigned to reflect the usage of digital enablement.
• These changes relate to both SIPs for sales individuals and teams, and to those owned jointly by sales representatives and digital teams.

Most of these companies have already integrated digital platforms into their work, to complement in-person meetings. This puts such companies ahead of the curve in terms of digitisation. It is clear that this emerging trend will become more of a norm in the next couple of years.

The adoption of virtual platforms/channels is incorporated into many SIPs for a number of key reasons:

• The era of digital is here to stay. Be it clinic visits, product detailing, continuing medical education (CME), or CME camps, few aspects of sales have been left untouched by the technology revolution.
• Digital platforms/channels are more than just a means of facilitating communication in times when face-to-face interactions may not be possible.
• Digital platforms/channels can enhance many aspects of the sales process. Take product detailing: e-detailing modules are increasingly superseding the piles of pamphlets seen in many clinics.
• Digital platforms/channels deliver the most up-to-date, accurate and comprehensive content.
• Using closed-loop marketing (CLM) techniques, digital platforms/channels enable organisations to track the type of content being accessed by healthcare professionals (HCPs).
• Using this information, marketers can push tailored content to HCPs.
• Such platforms/channels can be further integrated with marketing analytics to help segment HCPs (based on their preferences, demographics and online behaviour). They can also be used to create customer personas.

Product knowledge and skills

Our survey suggests that about 33% of organisations incentivise sales teams based on the product knowledge and skills they have acquired.

Product knowledge and skills are incorporated into many SIPs for a number of key reasons:

• New developments such as omni-channel digital marketing and multiple fast-paced new product launches have disrupted the traditional sales model and heightened the need for sales teams to have up-to-date product knowledge.
• The market is disrupted and volatile: due to recent disruptions, many pharmaceutical companies have seen reduced sales because of delayed and cancelled elective surgeries. Others have seen an unprecedented uptick in their orders (these are primarily companies supplying essential products such as ventilators, PPE and COVID-19 tests). Thus, the steady growth for which many firms have planned has been replaced by massive upward or downward swings. This, in turn, requires sales teams to be well informed about the full range of products and services they are marketing.
• Training for sales personnel is shifting to focus on new products, alongside digital/social selling tactics and the importance of aligning with customers’ digital personas. Organisations are equipping their sales forces with knowledge and skills using multiple learning channels. These include mobile/virtual applications, structured training calendars and product experts who act as coaches.
• Rigorous governance oversight structures are being put in place to ensure compliance with regulations. This means that sales people must be up to speed with the latest rules and how they relate to the products they are selling.

Customer satisfaction scores

**Our survey covering medical devices firms suggests that only one in five organisations include satisfaction scores in their sales incentive plans.

Incentivisation based on customer-satisfaction scores was not prevalent in the medical devices industry due to difficulty in tracking and measuring this criteria.

However, this situation may soon change:

• Many medtech organisations are repositioning themselves as long-term healthcare solution partners (rather than just product suppliers).
• With the help of digital technology, it is becoming easier for such companies to map the customer journey and measure customer satisfaction ratings.
• In turn, it will become easier to use this metric to track the performance of sales staff (and so incentivise them to improve).

Lead generation

The above survey also suggests that one in ten medtech organisations are incorporating incentives based on lead generation into their SIPs.

This parameter is driven by the organisation’s product portfolio. It is being added to SIPs for a number of key reasons:

• To balance both short- and long-term sales cycles, especially where there is a need for creating a pipeline to funnel customers towards making a purchase.
• To create a balance between immediate sales and the generation of leads, especially for products with longer sales cycles.
• To encourage sales teams to focus on this aspect of their job across the whole of their company’s product portfolio (and to focus on lead generation for specific products, as required).

Conclusion

The unprecedented pace of transformation in the life sciences industry demonstrates the need for innovative and dynamic SIPs. Such plans must:

• Optimally reward the achievement of revenue targets.
• Drive behaviour which will ensure that other key qualitative metrics are achieved.

These metrics include doctor/call ratios, the level of adoption of virtual platforms and channels for engagement and content delivery, product knowledge, customer satisfaction scores and lead-generation results.

The right SIP can go a long way towards helping an organisation achieve its strategic goals and boost its operational excellence. It can help leadership to keep the focus of their sales force on the right/desirable behaviours and actions. In turn, an effective SIP can help build a healthy sales organisation by enhancing its overall performance culture, ensuring discipline and driving innovation.

*2021 Pharmaceutical Field Force Rewards Benchmarking Study (Mercer partnered with sixteen global pharmaceutical organisations to analyse and report their sales incentive quantum and insights from their practices)

**This metric has been taken from Sales Incentive plan study for large Medical devices.

Author