Companies are using more analytics to enable better sales teams decisions, yet one area that is still too frequently undervalued is sales territory design, or the way in which the responsibility for accounts is assigned to salespeople or sales teams. The impact of vacant sales territories on overall brand performance is often underestimated within pharma and biotech companies. There are varying causes of vacancies, including rep promotions and transfers, resignations, terminations, and organizational restructuring. These vacancies have significant impact on pharma and biotech brands. The most obvious impact is a decline in sales and market share as competitors take advantage of no personal selling SOV for affected brands. This can result in a 25-50% decline from baseline market share. In addition, there are significant declines in service-based items such as samples, copay cards, etc., which are critical to driving new patient starts.
Sales forces that have not recently evaluated and adapted their territory design to current business needs likely have misalignments that are keeping the sales force from achieving maximum effectiveness. In today’s dynamic marketplace, many factors can cause alignments to get out of synch, including a new product launch, entry into a new market, a revised company strategy, and a new sales force size or structure. To stay current with market needs, alignments need to be re-evaluated at a minimum every two years.
Defensive approaches can protect companies in high sales force turnover environments. Two strategies help minimize sales loss across all three phases surrounding a salesperson’s departure.
First, build multiple connections between customers and the company. The risk of customer loss is especially great when departing salespeople hope to bring customers along to a new job with a competitor.
Vacant territories are a significant challenge for pharma and biotech companies, resulting in loss of business, as well as additional negative impact on company and brand image with HCP targets; these negative factors can linger for a significant period of time after the territory is filled. Through successful implementation of our Vacancy Management Plan, we maintained the overall business trend for the brand during the six-month timeframe and actually showed increases in business with some target HCP subgroups.
