- November 29, 2006
- Posted by: Dave Kurlan
- Category: Understanding the Sales Force
How is this for confusing and hypocritical? In the same year in which physicians voted Pfizer’s sales force the most valuable among the major pharmaceutical companies, Pfizer announced that it is reducing the size of it’s sales force by 20% as part of a $4 Billion dollar cost cutting measure. Pfizer has apparently concluded that a sales force is not the best way to market its drugs to physicians. Seth Godin would jump up and down upon hearing this.
In my opinion, selling by the pharmaceutical industry has never been very effective. With salespeople not required to actually close sales, their role has been more of ambassador, product expert and educator. Measuring their effectiveness, as you can well imagine, is more difficult as well.
The real question is which 20% did Pfizer choose to jettison? Their least senior salespeople? Their least liked? Those with the least potential for growth? Those who make the fewest doctor visits? Those with the lowest sales to pharmacies?
When a company reorganizes its sales force, it can choose from various criteria to make its decisions. Invariably, companies use subjective rather than objective reasoning and often make bad decisions. When our sales force evaluation is used for this purpose it sheds light on the reasons why people perform the way they do, how closely they really fit in comparison to the company’s strategic requirements, whether they can execute the company’s strategies, sales management’s impact on their performance, and a prediction of how they will perform in the future with proper development. These findings cause companies to look at their sales organizations from a totally different perspective, one that’s much more objective rather than subjective.
Did Pfizer evaluate their sales force prior to making their decision? I don’t know. Did they use the right criteria? I don’t know that either. Was it a good decision? Probably. Based on the data we have collected on salespeople from 32,000 companies, it would be fair to say that 20% of the salespeople in most companies can be eliminated without a loss of revenue. But the real key is in choosing the right 20% and most companies use the wrong information to make those decisions.