significance of sales force competency on … · significance of sales force competency on...

SIGNIFICANCE OF SALES FORCE COMPETENCY ON

PERFORMANCE OF PHARMACEUTICAL COMPANIES

Rajeev Mishra1 & Deepak Sanghvi2

1 Research Scholar, Faculty of Management Studies Email: [email protected]

2 Faculty of Management Studies, C. U. Shah University, Wadhwan City, Guajrat. email: [email protected]

Abstract:

The study investigates vital role of sales force in increasing the performance of pharmaceutical companies as most

pharmaceutical companies invest a huge amount in their hiring and training along with a huge spend allocated to promotional

budget to field force activities. The salespersons in the Indian pharmaceutical business having three competency dimensions

including self-concept, traits and motive and right skills along with knowledge can lead to pharmaceutical companies in

achieving best performance. The competent and clever salesman shall be effective and beneficial for organization commercial

growth being significant link between customer and business. Further, we discuss that performance of salesperson is directly

related to his level of competencies. The research model is backed by analysis of data carried out from a feedback-sample of 125

pharmaceutical managers of leading 36 pharmaceutical companies across eight states holding 75.7% share of pharmaceutical

manufacturing in India.

Keywords:

Performance, Pharmaceutical Company, Competency, Performance, Salesman capability, Communication

1. INTRODUCTION AND LITERATURE REVIEW

In the competitive era, the organizational, team and individual performances can be improved by

utilizing competency-based methods which is widely used by business practitioners. The

business organizations are using various competency models for compensation and performance

appraisal. The conventional method of predicting the performance of human using intelligence

and trait approaches is replaced by competency based methods by McClelland in the year 1973

[1]. This method was originally functional for the testing achievements in educational field but

later the competency based approach was widely adopted by many businesses. Some

investigators [2-3] have questioned the competency movement which was proven to be a

revolutionary for predicting and measuring human performance by [4,5,1]. With the growth in

competency applications, it is suitable to reflect its effect on performance of human.

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Volume 8, Issue 5, 2020

The sales performance measurement is one amongst many essential issues in sales management

and personal selling and both researchers and managers have great interest in the same. A

salesman who is skilled can prove valuable for the industry in numerous ways. Sales

performance depend not only on motivation, role perception, personality, aptitude and

organization factors, but also on skills (sales competencies) as stated by [6-8]. Government

regulations, scientific and technical changes are transforming the physicians’ environment,

government is also planning to enforce the MCI guidelines & UCPMP Code. This leads to

marketers getting tight competition in nurturing and retaining their customer base, in order to

maintain profitability. The prime responsibility of marketers is to treat the customers with

highest care and sophistication because this directly leads to fact that well approached and well

treated customer always turns out to be loyal and potential consumers. This is the main reason;

businesses are looking for more efficient sales force. Sales people are considered as the nexus

between customers and firms and they act as major contributors to an organizations survival [9].

Rising emphasis on fair marketing will require pharmaceutical sales force to give up its deep-

seated marketing practices and embrace entirely knowledge-based outlook while interacting with

physicians. The individuals who are well trained and clever with proficient in various

competencies and soft skills are in very much demand. According to the salesman's; they should

be laden with the core competencies which definitely safeguards the rewarded performance in

addition to personal growth. The skills along with proficiencies will help the salesman to build

healthier rapport with the consumers, which will eventually lead to the favorable growth of the

business and the individual. The study emphasizes on prime competence of salesman which

enables him to improve the key performance domains.

The key aspects on improving the performance due to competency and its moderating effects on

the association between performance and competencies are investigated in this article. The

suggestions derived from the results accumulated tries to provide direction to managers for

development of performance and competencies of salespersons in the pharmaceutical sectors.

1.1 Competencies & Performance The abilities and skills possessed by an individual can immensely contribute towards the sales

performance and it also supports numerous sales responsibilities. The brilliance of delivering

effective sales is known as an individual’s sales performance. The individual outcomes of a sales

man and organizational effectiveness depend on the efforts and skills of the salesman [10-11].

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The competencies which acts as a performance predictors are widely accepted however very less

experimental research is carried out to prove that these skills do make a big impact on the

performance. Marketing is a thorough procedure which is divided into multiple phases. The

salesman needs to perform well at different phases in order to deal with customers and for that

an individual should be packed with abilities and proficient skills. The primary goal for this

study is to find out the relation between sales performance and competencies. Various

competencies (skills) essential by the salesman who is involved in the procedure of selling is

mentioned in the study statement by National Skills Development Cooperation (NSDC, 2014)

[12]. Based on the prior opinions from various HR executives and the report, six competencies

(skills) are identified and considered for the analysis. The theoretical model as shown in figure 1

illustrates the assumed relativeness among sales performance and different competencies of a

salesman.

Figure 1. Hypothetical model for relativeness between sales performance and competencies of salesman

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The salesman must have Competencies which include Merchandise knowledge, good

demonstration skills, listening ability, complaint handling, convincing skills and interactive

ability.

The accurate Merchandise (product) knowledge leads to more sales. According to the Business

Dictionary (2014), Product Knowledge is all about acquiring detailed information about goods

or services features, functions, users, applications and related support features. If a salesman

fails to address the specific needs of how the product can satisfy the consumer needs; than it gets

difficult to sell the product to the customers [13]. The thorough knowledge of the product will

help the salesman in overcoming the doubts and objections arising from the customers regarding

the product and it will also enhance the confidence and enthusiasm. Product knowledge of a

salesman can definitely lead to profitable sales.

In sales situation, good demonstration skills of a salesman have great significance [9]. With

right demonstration skills - detailing the pharmaceutical visual aid or flip chart and other printed

scientific literatures - a salesman can easily make the customer aware about the benefits,

features, and usability of the service/product. Sales success depends on sales demonstration

skills which are also backed by salesman and sales managers. Pharma companies should nurture

specialists for each segment with sound product knowledge as a must-have. Lot of efforts is

being carried out by the vendors and trainers for improving demonstration skills because they

expect that increase in the skill level will lead to improve in the sales performance. Salesman

having more competencies at providing effective sales demonstrations will always perform at an

upper level. Pharmaceutical giant Glaxo’s initiative to motivate medical representatives to focus

on their knowledge competency rather than targets was a path breaking decision & also is a step

in the right direction. Many pharmaceutical marketers were taken aback when MD of

GlaxoSmithKline-India, Mr.Annaswamy Vaidheesh, said in an interview with ETHealthWorld

in 2017 that GSK’s representatives were no longer measured on lagging indicators like sales

targets but on leading indicators like their ability to transfer scientific information effectively to

doctors [17].

The listening ability of a Salesperson can be defined as the process of enthusiastically

interpreting, sensing, evaluating and responding to all the nonverbal and verbal messages of

potential customers. For successful salespeople, listening is considered to be the most required

skill in order to build open relationships and build trust among customers [14]. Listening will

help the salesman to collect information and understand all the needs of their customers' in a

better way. Proper listening ability will lead the salesman to make progressive closing of the sale

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and thus, the salesman’s performance level will also increase. Salesman can make the customers

feel more interested and trustworthy by sincerely listening and putting efforts to fulfill their

needs.

The ability to distinguish objection handling is vital for the success of a sales person. Smartly

handling customer's objections will essentially eradicate the obstacles coming in between sales

success. The well-handled objection reflects in the enhanced sales and thus, better level of sales

performance by a salesman. With appropriate and lively objection handling, a salesman can

easily convert estimated sale in to a positive sale.

The salesman having appropriate product knowledge and confidence can easily convince the

customers to buy the products. Convincing should be done to a customer in such a way that that

they will preserve their interest on buying the product again and again. The appropriate

convincing methodology brings the consumer to the another level of procurement procedure.

Sales personnel which are able to manage to sale persuasively or convincingly to consumers are

highly likely to exemplify upper standard of sales efficiency. The Interactive skills of a salesman

will help to develop and form a productive and gainful relationship with their customers. The

interactive skills of a sales person are considered as useful forecasters of salespersons

performance [8, 15]. Researchers have suggested that salesman having decent flexibility in

interpersonal skills have higher performance. Interactive skills are essential as same will make

the customer feeling comfortable enough for purchasing what a salesman is selling [16]. Further,

interpersonal sales skills help in building long term relations with consumers that eventually

direct towards improved sales person efficiency and hence eventually, higher organizational

profits.

2. METHODOLOGY

The performance of the pharma companies due to sales force competency is established with the

help of study carried out after taking the feedback from managers of various pharmaceutical

companies. The primary data for establishing the relation is collected from various managers

from across India. The data required is collected with the help of a pilot studied/well-tested

questionnaire. The questionnaire made after careful consideration were distributed to

pharmaceutical managers of leading pharmaceutical companies based in eight states holding

maximum percentage share of pharmaceutical manufacturing like Maharashtra, Gujarat, West

Bengal, AP/Telangana, Delhi, Tamil Nadu, Uttar Pradesh & Karnataka as shown in Table 1.

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Table 1. List of cities from which the data is collected

State Maharashtra Gujarat WB AP/Telangana Delhi TN UP Karnataka % Share of State

wise distribution of Pharmaceuticals

Manufacturing Units

29.7 14.4 7.2 6.9 5.1 5.4 4.2 2.8

Source: Directory of Pharmaceuticals Manufacturing Units in India, 2007, National Pharmaceutical

Pricing Authority, Govt. of India. New Delhi; http://www.nppaindia.nic.in

A questionnaire keeping various key aspects to identify the sales competency were used for the

study and response was received from around 125 managers from several Indian pharmaceutical

companies. Various factors affecting the competency were covered with the help of this pilot

study which was mainly focused with respect to sales persons serving in reputed Pharmaceutical

companies. The competencies are broadly grouped into four dimensions which includes

salesman core competence, salesman capability analysis, salesman’s communication

competence, and finally the image of salesman.

3. DISCUSSIONS

The data gathered from the mangers has been evaluated thoroughly, summarized and presented

using graphs, mean and standard deviation. For statistical analysis of data, Microsoft Excel has

been extensively used for empirical interpretation.

Figure 2 depicts the salesman core competency based on five different parameters. The

managers were told to judge the sales competency based on salesman’s appropriate educational

qualification for pharmaceutical sales job, number of years of experience in leading

pharmaceutical companies, good geographical knowledge of the working area, urban education,

self-confidence and motivation level where responses were taken on a scale of 1 to 5 where 5

rating defines very high impact and 1 rating defines very low impact.

It is observed in this research that managers expect their sale force must have self-confidence

and high motivation level as their most important competency so that they can function at a high

energy level all day away without direct supervision & should not be beaten by rejection from

customers & distribution channel partners. Good geographical knowledge of the working area

will help in proper work planning & channelize efforts correctly. Most of the HR managers look

into the educational qualifications & experience as sales persons competencies while recruiting

but miss to check the self-confidence, motivation & geographical knowledge which is the most

important competency impacting the sales performance. Pharmaceutical company management

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should invest in training to shape & build their sales force confidence along with proper reward

& recognitions to keep them highly motivated.

Figure 2. Salesman core competency

Figure 3 illustrates the analysis of salesman’s capability based on twenty-three different

parameters. The managers judged the salesman’s capability based on ability to plan coverage of

all doctors in the master doctor list, ability to understand doctors nature of practice, ability to

understand product preferences & prescription habits of doctors, ability to calculate doctors

business potential, understanding of scope of new product introduction at doctors, ability to

analyze and convince which new product to be added to existing prescribers, ability to priorities

product detailing to doctors, ability to do pre call planning before each call, knowledge of

product availability status at chemists, ability to convince the chemist to stock companies

products, knowledge of scheme & discount operated by own company & competition at

chemists, ability to plan sales month wise, week wise & product wise, ability to plan execution

of sales customer wise & party wise, knowledge of demand mapping & inventory planning at the

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stockists & retailers, ability to show adaptability with situation and stakeholders, ability to

possess self-emotional control to respond to the problems of stakeholders, ability to handle

failure in meeting targets, shows adaptability to acquire new knowledge, ability to exhibit

analytical thinking ability, possesses agreeableness to both positives and negative situations,

shows openness to market changes, exhibits thoroughness, ability to exhibit instantaneous

positive reactions to unexpected situation where responses were taken on a scale of 1 to 5 where

5 rating defines very high impact and 1 rating defines very low impact.

This research gives insight that most important capability of sales force is to thoroughly

understand the need of customer and ensure to reach each customer with proper pre call planning

to catering to his need. A “one size fits all” approach will not work anymore, sales person has to

customize his offerings from the product basket available through proper retail audit and develop

insight about each and every customer & distribution channel partner. Sale force should be

competent to analyze legacy of sale data of its territory & plan their sales customer wise, party

wise & also into saliency of weeks, months & products. Most of the pharmaceutical companies

spends a considerable amount of their budget in training their sales force on product knowledge

& product detailing competencies but very less importance is given to sales force customer list

analysis or studying the key customer profiles from the database available. Managers should

train sales force to build their competency for qualitative observation of their customers such as

behavioral patterns, personal goal, decision-making drivers, family background & encourage

sales force to do diary studies before each customer visit. Sales force training should also include

data analysis & planning.

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Figure 3. Salesman Capability Analysis

Figure 4 represents the salesman’s communication competency based on nine different

parameters. The managers judged the salesman’s communication competency based on

proficiency in English language to understand the companies desired communication,

competency to deliver the desired communication in English to all doctors, competency to

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deliver the desired communication in regional language to all stake holders, competencies to

discuss scientific clinical data with doctors, ability to answer doctors objections and questions,

ability to record doctors experience & feedback, competencies to demand new prescriptions, and

ability to handle digital technology as communication media where responses were taken on a

scale of 1 to 5 where 5 rating defines very high impact and 1 rating defines very low impact.

A sales person might wait for hours to see a prescriber and communicate his product, only to

have a short, distorted communication that may be forgotten easily. This research shows that

sales force must be thoroughly trained to communicate product USP’s very briefly with

competency to handle objections/questions impactfully and demand business in language he is

most confident from all stake holders. Pharma management should equip their sales force to

optimize the experience of customers through digital technology for long lasting impact. A study

on promotional strategies of pharmaceutical organizations through online and social media

suggests that there is a strong opportunity to integrate online and social media with traditional

marketing strategies to reach out to a larger human population to meet the expected business

objectives [18].

Figure 4. Communication competency

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Lastly the salesman’s image on sales is illustrated in Figure 5. The managers judged the

salesman’s image on overall sales based on four different parameters including well-groomed

during the doctor call, good conduct on and off the field, disseminates positive information about

the company, earning the respect of customers where responses were taken on a scale of 1 to 5

where 5 rating defines very high impact and 1 rating defines very low impact. Based on the

responses received from managers, it can be observed that they think all the traits mention

should be present in a salesman to earn respect of the customer which makes a significant impact

on the sales performance.

Figure 5. Salesman Image on Sales competency

4. CONCLUSION:

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Salesman performance is extremely vital component in the overall revenue of the pharmaceutical

organization. The competence of Salesman widely determines the scope of reach by pharma

companies. The presented manuscript analyzes the key competence of the salesman from holistic

perspective. The statistical analysis exhibits experience of the managers and senior level

employees about the correlation between salesman traits and organization performance. It is

evident from the survey that pharmaceutical sales force which is confident, motivated with

proper customer understanding and geographical knowledge of its territory, thoroughly trained

to briefly communicate USP’s with suitable planning ability & objection handling will earn

customer respect & will then be the most competent to demand business to impact its

performance. Thus, superior quality of salesman’s competence Viz. Core competence,

Communication Skills with integrate digital media marketing strategies and his image permits

the organization to influence & achieve its short, medium- and long-term goals. The success of

the business is quite dependent on abilities of the salesman, not completely but yet definitely on

large degree.

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[16] Handfield, L. (2014). Interpersonal Skills for Salespeople. Retrieved form eHow effective work habits website available at: http://www.ehow.com /list_7636743_ interpersonalskillssalespeo ple.html#ixzz33mzdakBn.

[17] Medicinman (2017). Incentivizing A Patient-First Approach in Pharma, A Conversation with Annaswamy Vaidheesh, GSK available at: https://medicinman.net/download/MedicinMan_August_2017.pdf.

[18] Rajeev Mishra, Deepak Sanghvi. (2020). Promotional Strategies of Pharmaceutical Organizations through Online and Social Media. A Journal Of Composition Theory, 602-613 Volume XIII Issue I, ISSN : 0731-6755.

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