Professional Outside Sales

(republished from the Pharmaceutical Sales Manager Journal)

Key Account Management (KAM) is a phenomenon that has been gathering momentum in many industries for some time now and represents a way of ensuring that sales forces are used to gain optimal returns over a sustained period. Such models allow companies to build sustainable competitive advantages over rivals in a tight, focused manner, whilst erecting substantial barriers to entry against the competition.

Typical sales relationships in the old model tend to look rather like a Bow-tie arrangement (see Exhibit 1). This model leaves the sales relationship between company and customer weak and extremely vulnerable to competition. Typical of the old, Representative to GP or Hospital Representative to Consultant model, this approach is now in need of a drastic re-think. Because the only meaningful point of contact is between the Sales Representative and a handful of customers within the PCT, the entire relationship is vulnerable. If the Representative is poor then the relationship is doomed. If the Representative is good, then a competitor can poach him or her away, taking much of the goodwill and relationship away at the same time.

Additionally, the great premise of Customer Relationship Management, (CRM), also comes into play here. Vulnerability exists for companies because the majority of the knowledge that makes this singular customer relationship so special resides in the head of one employee. Many companies have spent small, and often not so small, fortunes on Knowledge Management (KM) and CRM software endeavouring to share this valuable knowledge more widely. The question is, good as CRM is, is it the best and only way to share knowledge of a PCT around the organisation?

Exhibit 1 The Bow-Tie Relationship

Companies can differentiate themselves to key customers and shore up the potential weaknesses in their key customer relationships by moving from Bow-tie models to Diamond models of customer relationship (see Exhibit 2). In this relationship model, many personnel within the company interact with their designated opposite numbers in the PCT, overcoming many of the drawbacks of the traditional approach in that it requires the involvement of a number of different personnel and specialities interacting with the PCT in varied and meaningful ways.

Exhibit 2 The Diamond Relationship

This type of relationship Locks the PCT much more closely to the company. It does not stand or fall on the relationship between, perhaps only two, individuals and is extremely stable. It also elevates the job of Salesman to that of Key Account Manager, although many of the companies that have already gone down that route tend to use Senior Managers as Key Account Managers rather than salespeople, preferring to keep the salesperson as part of the team.

Whilst there are obvious advantages to this type of relationship, particularly as PCTs get ever larger and more complex, it is not without its difficulties. The Diamond model is a more complex beast than the Bow-tie; it is fraught with difficulties if communication within the company is not excellent.

The other mind-sets challenged by KAM are those of timescale and functional silos. KAM, done correctly, takes a long time to achieve and is most definitely not a quick-fix sales scheme. It is, rather, a longstanding, strategic commitment to embed the company with those customers that are most important to its long-term success. The simple selection of which accounts should be considered Key is fraught with difficulty and again, done correctly, is a far cry from a simple measurement of biggest or most vocal. There is also the functional fall-out from such a decision. Historically, sales departments have guarded very carefully their access to customers and their relationships with them.There have been countless arguments inside pharmaceutical companies between sales and marketing and sales and Medical over who owns a customer after a CRA visit or pre-launch initiative. KAM mandates such interactions and all involved have to regard this multipointed interaction as an integral part of the new modus operandi for the organisation.

The techniques of Key Account Management challenge sales managers who cling to the old detail-driven activity model. They will not satisfy those looking for the quick-fix or the initiative for Q3. However, these techniques are proven and they will help companies to build an enduring and sustainable competitive advantage with an increasingly important set of customers in a highly competitive and hostile environment. Only time will tell if the mega mergers can deliver the same promise.