Novartis’s Winning Strategy

With all the uncertainty the pharmaceutical industry faces, driven by cost-cutting pressures, reluctant buyers, narrowing pipelines, and the looming specter of government healthcare reform, changing the traditional pharma sales strategy has rapidly gone from an intriguing idea to an absolute necessity. Such fundamental shifts are fraught with peril, however, and industry executives would do well to follow the best practices of companies that have already successfully navigated the sales strategy realignment process.

According to Andris Zoltners, cofounder of ZS Associates and author of Building a Winning Sales Force; Powerful Strategies for Driving High Performance (AMACOM, 2009), the key to developing a new sales strategy lies in examining sales force structure and roles, assessing the skills and capabilities of the sales force, and then implementing performance-based incentives and other sales effectiveness drivers that specifically promote those sales activities associated with the new strategy.

One company Zoltners suggests is making all the right moves is Novartis Pharmaceuticals. In a recent Pharmaceutical Executive magazine article, Zoltners praises the way the Switzerland-based company uses annual sales effectiveness reviews "to assess and enhance global sales performance."

With these sales effectiveness reviews, Zoltners says, Novartis executives identify potential opportunities for increased sales. In 2001, for example, the company conducted the first round of such reviews and discovered that salespeople were spending too much time calling on physicians who did not write significant numbers of prescriptions for Novartis’s class of drugs. In response, the company shifted the sales focus to concentrate on the top 35 percent of physicians who wrote the greatest volume of prescriptions in those drug classes.

Even such a seemingly uncomplicated strategic shift required significant adjustments, Zoltners says. They included the following steps:

• adding a new sales team to help increase Novartis’s call frequency on those high-volume prescribers;
• creating training programs designed to teach company salespeople how to focus on the targeted physician group, as well as explain the benefits of the new strategy;
• tasking the marketing department with equipping the sales team members with the information and tools they’d need to target these physicians most effectively.

The initiative worked well, resulting in increased sales, which has led Novartis to follow the same process with subsequent strategic change efforts. Following a review, the company leadership develops a plan for improvement, executes the plan, and then measures progress.

As a result of a more recent sales effectiveness review, Novartis executives discovered that low and average sales performers improved their production when the organization arranged consultations between the lower performers and more effective members of the sales team. Part of the process involved having sales leaders accompany salespeople at both levels making sales calls, then comparing the behavior of the two groups. Interviews with district managers and physicians helped round out the picture to determine which behaviors tended to achieve the greatest success in educating customers.

Based on this data, Novartis developed guidelines based on the specific methods top performers used for relationship-building, call preparation, probing and listening, adapting corporate communications strategies to suit individual physicians’ needs, and reinforcing Novartis’s products’ specific value propositions. New training based on these approaches was developed, and managers were given new tools and reports to help them evaluate salespeople based on the new selling models.

Zoltners reports that the new strategy proved so successful that Novartis rolled out the same training approach for the company’s sales teams in other countries. Meanwhile, the annual effectiveness reviews continue, each year generating a wealth of new opportunities for improving sales strategy.

At its core, Zoltners says, Novartis’s success in uncovering, assessing, and implementing the most effective sales strategies is about fearlessly and proactively pursuing change. "While there is no consistent, one-size-fits-all solution to pharmaceutical sales strategy," he says, "pharmaceutical executives who embrace change – and use a structured approach to continually assess and improve their sales strategies – will best prepare their organizations to not only face today’s uncertainties, but also conquer tomorrow’s challenges."