Too Many Sales Reps

By Dave Stein, CEO & Founder, ES Research Group, Inc.

Last  week Pfizer announced it would be reducing its sales organization by 20 percent--more than 2,000 people. Jeffrey Kindler, Pfizer's CEO, said, "The changes we are making today will better align our sales organization to our overall customer and business needs. This is an important step toward making Pfizer a more agile and effective company."

This is big, big news not only for Pfizer and the pharmaceutical industry, but also for anyone in sales. For years, many doctors have had issues with the tactics of detail reps, not to mention the sheer number of them.  Last year WSJ columnist Benjamin Brewer, a family practice doctor in Forrest, Ill., decided he would no longer see drug sales reps in his office. One of his many complaints was that drug companies sent multiple salespeople pushing the same drugs, hoping one of them would succeed.

My former doctor (former, only due to my recent move to Massachusetts), knowing I was in sales, complained bitterly about the drug sales reps. He described them as ill-prepared, pushy, often arrogant and far too plentiful.  Understand, that's only one doctor's opinion.

Forbes reports the number of pharmaceutical salespeople tripled in the past decade, now with one for every nine doctors, compared to one to 18 in 1996. (Source: SeekingAlpha.) But that number is now working in reverse, as some pharmaceutical industry analysts see Pfizer's move as trendsetting.

Although Pfizer is facing the loss of patent protection on some of its best selling drugs, two of the stated reasons for the monumental change are right on target:
* Reducing cost of sales
* Better alignment with customer and business needs
What impact this will have on Pfizer's sales team, we won't know for a while.  Pfizer intends to keep top performers, but when cuts like this happen, it's often the best-performing sales talent and management that leave. But where do they go?  To other companies following Pfizer's lead and also drastically reducing the size of their sales forces?  Time will tell.

A message for all of us: Sales performance, alignment with customer needs and the cost of sales is becoming more of a focus at the boardroom level. That's good news for those who perform. It's bad news for those who don't.

*Read more on sales strategies on ManageSmarter.com

Comments

[Belstaff Jackets]

For any folks invested in more and better resident contribution, that is a knock back, i believe. But strangely enough, the newest one-pager Can involve many responsibilities around consultation.

[Paul Hebert]

The most important comment in the post is "Sales performance, alignment with customer needs and the cost of sales is becoming more of a focus at the boardroom level."

It's about time that people performance becomes mission critical for companies. I would ammend the statement to include "all" employees - not just sales. As a professional in the performance improvement industry I have continually seen companies dismiss the effort and investment required to truly attract, engage and retain their most important point of difference in their comnpany - their people. As the economy moves from manufacturing-based to knowledge-based, the performance of a company's human capital needs to become the most important focus of the "C" level.

Until companies see their human capital as the "new factory" and treat them as well as they treat the machines that produced their products in the past they will continue to wonder why they can't compete.

I know that sounds a bit detached but only to make the point that the current and future economy will rely on how well companies maintain their production equipment - their people.

[Daniel Haszard]

Eli Lilly zyprexa cost me $250.00 a month supply and has up to ten times the risk of causing diabetes and severe weight gain.

Nervous investors watch Eli Lilly shares drop $2.80 post election.

My issue is Zyprexa which is only FDA approved for schizophrenia (.5-1% of pop) and some bipolar (2% pop) and then an even smaller percentage of theses two groups.

So how does Zyprexa get to be the 7th largest drug sale in the world?
Eli Lilly is in deep trouble for using their drug reps to 'encourage' doctors to write zyprexa for non-FDA approved 'off label' uses.

The drug causes increased diabetes risk,and medicare picks up all the expensive fallout.There are now 7 states (and counting) going after Lilly for fraud and restitution.

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Daniel Haszard