One of the toughest sales jobs in business today is that of the pharmaceutical sales representative. There are so many barriers to the traditional process of selling…limited access, managed care, limited resources and generic drugs in a time when every patient and physician is hyper-sensitive to costs. According to SK&A Associates, a leading provider of healthcare information and research basedin Irvine CA, the number of practices that no longer see reps has increased to 38.5%

Add to that the fact that a pharmaceutical sales rep rarely gets to see the “sale” at the point of the prescribing decision - that moment is rightfully reserved for the examining room - and you can see why the pharma sales job in an increasingly demanding position. It is really an “influencing job” rather than a more tactical selling approach.

A primary care physician (who gives access) sees an average of 35 reps per week and spends less than 90 seconds with each rep on average. What can reasonably be accomplished in 90 seconds in terms of effective selling? Most reps use the time to do a quick detail of the product they are promoting and than try to engage the Doctor for additional time by asking questions about disease states, personal interests and patient feedback on their product. The Doctor usually gives the rep an “auto-response”, in effect telling the rep what they believe the rep wants to hear for the singular purpose of getting the rep to leave their samples and then leave the office.

This equates to a tremendous waste of time for both the rep and the physician.

We suggest that a pharmaceutical rep has to differentiate their approach in order to effectively capture a physician’s attention. We have been working with reps to develop what we call a “Doc Stopper” questioning approach. The rep grabs the attention to the physician by asking a question that defies the “auto-response” and promotes a more open and honest conversation….it does not necessarily add time to the average sales call but garners a deeper, more thoughtful response.

One rep was constantly being told by a physician that any drug in their class would work for patients presenting a particular disease state. Since there are five drugs indicated for that disease state, the rep grabbed their attention by asking “Would you agree that it makes the most sense to spread your prescribing more equally among all five products to create competition and drive down the average sales price?”

The Doctor stopped for a moment, considered the question and replied that economically it made sense, but admitted that there were partcular clinical circumstances that affected her decision on which product to write for a specific patient. The Doctor went on to explain her thought process.

By asking the “Doc Stopper” question, the rep was able to move past the usual interaction and learn:

• How the physican was actually differentiating the five drugs in the class.
• That the presence of samples had an impact on prescribing decisions in some cases but not others.
• That the economics of the drugs in the class had limited, if any, impact on the prescribing decision with this physician.

Pretty valuable information from a 90 second interaction, and certainly more useful than the usual message - personal connection - signature routine.

Other Doc Stopper Questions

• How has the influx of “urgent care” facilities in the area affected your practice?
• What are your thoughts about the changes in how we market our products?
• How much will it cost your practice to convert your medical records to electronic files (if it becomes law)?
• Do you find that your patients are waiting longer to come in for office visits in this economy?
• What is your biggest business challenge today?
• What are your thoughts on “boutique” practices?
• How do you attract new patients to your practice? What differentiates you?

For more information on how this approach and other influencing techniques can help you make the most from every sales call, please call us at 410-662-4764.

Sorry about the long stretch since our last update…we have been on the road conducting research with some of our favorite clients - pharmaceutical companies! The prevailing opinion among the reps that we ride along with at the start of the day is that “We don’t negotiate! We’re not allowed to negotiate!” While we at SNI understand the FDArules and PhRMA guidelines (and the reasons they exist), we also know that negotiation is a process, not an event. Wenever recommend using the “traditional” negotiating techniques like quid pro quo (”I’ll buy you lunch when you start writing more _____!”), but we do recognize that other negotiation habits such as preparation, probing and proposing are vital tools for any sales professional.

There have been many recent changes in the pharmaceutical industry that make the use of effective negotiation skills even more relevant in today’s business marketplace for the pharma rep. Three changes that we have studied closely in our recent research are:

Recent restructuring makes the “feet on the street” approach antiquated and ineffective.

With thousands of pharma reps being laid off in recent months, most pharma companies are moving away from the “reach and frequency” model of sending one rep after another to keep the name of their product and the short clinical message in front of their target physicians. One reason is that there simply aren’t enough reps left to call on a doctor 2 or 3 times a week with the same message. Another reason is that pharma companies are hearing the cries of their customers….the physicians. In a managed care environment, doctors maximize their profitability by seeing as many patients as possible every day. The mere presence of a rep is an interruption to this business reality, and many practices are limiting access to the reps in order to keep patient “traffic” moving along. Doctors told SNI in recent interviews that one effective rep has a greater impact on their writing habits than having 2 or 3 reps repeating the same message over and over again.

Resources are limited and reps must capture value (market share, volume, etc) for value delivered.

With PhRMA guidelines abolishing the practice of delivering office supplies, personal hygiene supplies, and other product-branded materials to their customers, reps have to be even more creative about how they remind doctors of their products benefits after they leave the office. Many pharma companies are also limiting their samples and educational materials in an effort to contain expenses and manage their inventories more effectively. By using proven negotiation techniques, reps can leverage their resources to drive business in the most efficient and profitable way without offending the PhRMA guidelines (or, more importantly, the physicians and their staff!)

Mergers and acquisitions provide an opportunity to develop a shared, more effective sales approach.

Recently, mergers between former competitors (Merck and Schering-Plough, Wyeth and Pfizer, et al) have created an opportunity for these companies to come together and develop a shared sales model and culture. The benefit is that the reps will be learning a new approach together, saving the stress (and the accompanying sales “dip”) that goes along with abandoning old methods while adopting those of the other company. By jumping into a new model together, merged companies can tap into the strengths of both sides and start anew with a shared, collaborative model for effective sales. At SNI, we believe that the adoption of negotiation-based selling will prevent the sales lag while giving the reps new tools and techniques for moving forward in a more efficient, value-based sales culture.

Usually, by the end of a day on the road with a pharma rep, they acknowledge that they do negotiate…on just about every call! Whether it is for access, information, or when allocating their own limited resources. Our proven methodology has helped reps do more than just detail doctors - by building credibility, value and trust via effective negotiating…these reps have a clear advantage in an ever-changing marketplace.

In upcoming entries, we will share some of the specific findings from our 6-week immersion into the pharma world and provide some new ways for today’s pharmaceutical rep to maximize the opportunities that the “new world” provides.

Influencing is communicating with a goal in mind. In essence, influencing is a requesting process. You are requesting that the other person (or group) do something or achieve an outcome.

Because you are making a request, there is inherently more accountability for both parties, thus more potential risk of tension, misunderstanding, defensiveness and conflict.

Often people use their every day communication skills when influencing, find that they don’t work, and wonder why. The reason is that the influencing process is different and requires different skills.

Don’t focus on what has been done in the past - wasting time and apportioning blame here is pointless.

* Concentrate on activities that can lead to sales in the future. Expand your resources in this area and if necessary enlist the assistance of other management and staff. Get professional assistance to quickly analyse your sales “inventory” of selling skills and resources.

* Immediately start a sales forecasting system, by customer, by product, by value and by month. Lock in sales that you are certain that you will be getting. Update this forecast on a weekly basis.

* Eighty-five per cent of business comes from existing customers, so start there. Contact all of your previous customers and start initiating sales activities. The 80/20 rule applies, so concentrate on the top 20 per cent of clients, but make sure that your proposition is well thought out.

* Fifteen per cent of business typically comes from new business accounts, and sales from this can be time-consuming and longer-term. It is a trap to divert more than 15 per cent of your sales resource to chase after people who have never done business with you.

* Don’t fall for the salespeople saying they need new systems and marketing material to be able to sell. There were sales before computers.

* Try to sell, not discount. Understand your gross margin and whether discounts will make you a profit. Too often, people equate discounts with more business, when in fact they become a false economy.

* Remember selling starts when the customer says “No” - otherwise you are leaving good money on the table. Anyone can give away products. Get fair value for your products, as every dollar in this market is worth three in a boom market.

There may be a tendency for a senior manager to start doing the selling himself or herself, or to get involved with major customers. If you have sales experience, then this may be an option. If not, beware, as creating the wrong impression can lead to a loss of business for a long time.

Whatever you do during this time, remember it and keep doing it when good times come again. Business cycles come and go, and you will ensure that the next time a recession comes you will have the tools in place to see it coming and to make the adjustments you need to ensure that your business does not end up on the rocks.

One thing we have learned over the years in negotiating deals is that the way you get to the agreement is as important as the outcome of the agreement. Many deals are struck where one (or sometimes both!) sides walk away feeling like they “lost.” It is better to adhere to some fundamental rules for proposals that will help you avoid striking deals that leave you or the person with whom you are negotiating feeling like you “left money on the table.”

1. Try Not to Make the First Offer

Let’s imagine you are negotiating to purchase a used boat. Walking around the marina one day you see a boater cleaning his 24′ sailboat, and you notice a “For Sale” sign on the deck. You alook the boat over and privately decide that it meets your needs. The seller asks you a seemingly inocuous question - “How much were you looking to spend?” Your response here is critical.

You know from research (because you prepared, of course) that this particular model is going for $12,000 on the used market locally. You know you have $12,000 saved for this purchase…so you respond “$10,500″. Not a bad offer, right? You are aiming lower than your budget, and according to your research you are $1,500 below “market value.”

To your dismay, the seller leaps over to the dock, grabs your hand, shakes it vigorously and says “You just bought yourself a boat!” You immediately try to backpedal…because the seller’s quick response is leading you to believe that you have left money on the table.

The problem here is that you failed to consider the value of the boat from the seller’s perspective.

Maybe he needs $8000 today to pay for a new home heating system. Or maybe he just bought the boat from a relative for $5000 and was really hoping to make $1000 profit. Or perhaps his wife just told him to get rid of the boat even if he had to pay someone to take it!

So your “well-conceived” $10500 offer was really not very well thought out after all. Now you have established an “anchor” (ironically enough) for the negotiation. It will be VERY difficult to move that number too far south from the original $10500, as now the seller knows your budget. This is the reason big ticket salespeople (cars, home remodeling, realtors) always ask “What’s your budget?” right away. It helps them to know your budget so they can anchor your offer.

2. Do Not Accept FIrst Offers TOO Quickly

Now let’s change the perspective and imagine that you are the seller. Instead of leaping across to the dock and “closing” so fast, you took a different, more thoughtful approach. First, you paused. Then you said something like “I’ll have to consider that.” And then you pointed out some of the finer features of your boat. And then you closed with “You drive a pretty hard bargain. I was thinking more along the lines of $11,500.”

Now the buyer has a counter-offer that is still $500 below their budget (unknown to you) and you have asked for an additonal $1000. If the buyer accepts (or even uses the old “split the difference” gambit) - they are happy because they have bought a boat $500 less than their budget, and they go home believving that they “drove a hard bargain.” You are happy because you unloaded your boat for more than you had hoped.

This is the classic WIN-win outcome where one side exceeds their expectations and the other side is reasonably satisfied.

In the next entry, I will cover more proposing techniques that will help you achieve WIN-win outcomes. In the meantime, please check out http://www.shapironegotiations.com for more information on successful negotiating!

We are often asked to work with companies and organizations that do not negotiate in the traditional sense of bartering over price (or terms). Some sales representatives do not have any control over pricing or terms due to organizational norms or the commoditization of their products or services. Other companies, such as pharmaceutical firms, are even more limited in their ability to negotiate due to regulations. For example, pharmaceutical sales representatives cannot “trade” services, samples or “extras” for prescriptions.

We struggled at first to apply the usual negotiating lessons and techniques to the “indirect sale” until we realized that a tactical approach to sales would be less effective than a strategic influencing approach.

Let’s use the pharmaceutical sale as the example. A pharmaceutical sales representative spends their day detailing physicians about their products in a very limited amount of time, perhaps as little as 30 seconds while the doctor signs for their samples. Some busy physicians see as many as 15 different sales reps in a day. Most pharmaceutical reps see upwards of 10 physicians a day (often with a variety of products in their “bag”). The message has to be clear and concise and yet the “call to action” has to be more subtle than a direct sale - “Will you try Product X on patients who present the following indications…?” is about as direct as you can be within the pharma guidelines. The best “close” a pharmaceutical rep can hope for is a promise that the physician is willing to try the product at some point in the future.

The pharmaceutical sales rep has no direct control over the “sale”. The physician makes the prescribing decision on their own in the examination room after the sales representative has left the office. The doctor has built a prescribing habit over time and it is very dfficult to change the habits of a highly trained, intelligent and busy physician.

We believe that the key to successfully changing a physician’s prescribing habits is based a sales representative’s ability to develop three critical components of INFLUENCE:

1. The Credibility of the sales representative when educating the doctor about their products;

2. The Relationship that the physician enjoys with the sales representative; and

3. The Value that the sales rep delivers to the practice.

If the sales rep can build enough credibility, and the relationship with the practice and the value delivered to the physician outweigh the RISK of switching the prescription (the efficacy, safety and patient economic impact of the new product), the sales representative has started to influence the physician successfully.

In the next post, I will show you how the systematic approach to negotiating can be applied to influence physicians more successfully.

John Buelow

John is the Chief Learning Officer at Shapiro Negotiations Institute (SNI), a training and consulting firm based in Baltimore MD. SNI has trained over 300,000 professionals around the world since 1995 helping people to close more deals, faster at higher margins.