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All things Pharma

Turning the key: Are you ready to lead your company into the future?

 Dr Brian D. Smith and Lindsay Bruce describe research into how sales teams make key account and key opinion leader strategies work.  

The fundamental trends in the pharmaceutical industry are obvious to anyone working in the field: fewer distinctive new products, less decision making power in the hands of the prescriber, more pressure from HQ to maximise returns before the generics come out. Less obvious, is that those trends have led to the two major developments in how commercial strategy is implemented. Key account management (KAM) is a response to the shift in decision power whilst key opinion leader management (KOLM) is an important step in differentiating branded products from low cost copies. Whilst these two developments are often written about in marketing and strategy journals, insufficient attention has been paid to the role of customer-facing teams. This article redresses that imbalance, explaining what KAM and KOLM are and the crucial role of field teams in making them both happen. The first challenge is to see through the waffle and woolly thinking about these two related topics. As with other new ideas, the terms KAM and KOLM are often thrown around loosely, making it hard to understand how they differ from traditional sales management and so more difficult to apply in practice. So a good place to start is with definitions, as shown in Box 1.  

Key account management is the process by which supplier and customer work together to create value for each other. It differs from traditional sales management in that it involves multiple points of contact coordinated by a key account manager, its goal is to create financial and non-financial value and it is long-term oriented.   Key opinion leadership is the process by which a supplier works with influential individuals or groups in order to communicate with and influence other customers. It differs from traditional selling in that it involves much more frequent, more interactive and more detailed working.      

Careful consideration of these definitions reveals that much of what we, in the industry, call KAM and KOLM is nothing of the sort. More often, companies have merely changed titles and terminology to make what they do sound more impressive, whilst not actually implementing important KAM and KOLM processes. This superficial approach fails to deliver the faster penetration and higher sales that flow from professional, well-planned application of the techniques. So, from a field sales perspective, what do KAM and KOLM involve? And how might an effective sales person push their company away from a superficial approach towards a more rigorous and effective strategy? The answer is that, although very different n detail, each approach involves three critical phases that depend heavily on the sales team.   

Phase one: Identification The first step is to identify Key Opinion Leaders and Key Accounts. It is easy to be simplistic about this and class any big account or senior clinician as ‘key’ but, in good practice, it really is a case of ‘less is more’ and fewer, well chosen accounts or individuals produce better results. In Box 2, we give a shortened checklist of how to identify each type of target.

Finding the Key

To be key, an account must be:A potential key opinion leader must be:
LargeWilling to work to long term goals Seeking non-financial value Able to offer non-financial value Willing to build a relationshipA respected authority in their region or specialtyWilling to engage in knowledge dissemination activity, such as publishing Have a wide network of contacts Not be compromised by other relationships Willing to work with a pharmaceutical company

It’s worth dwelling on these characteristics for a moment in the context of your existing customer contacts. How many accounts, for example, are willing to work with you to create value, not just haggle on price? How many well-respected and well-connected individuals are willing to work with you to publish or speak at conferences? Intelligent marketers will quickly realise that accounts and people of this kind are rare and precious. But KAM and KOLM begin with finding these targets and it is quite obvious that experienced field sales people are best placed to help find them.

Phase two: Development The second, much larger, step in KAM and KOLM is development, growing the relationship from initial contact to a working relationship. In both approaches, development begins with understanding the needs of both parties and looking for common interests. Whilst there are software programmes and research data to support this, it is ultimately a human process that requires many of the same intuitive skills shown by effective sales people. The outcome of this development phase is an account or opinion leader relationship based on trust and shared goals, the essential prerequisite to an ongoing commercial relationship. When this fails to happen, it is often because the company has failed to look at both sides of the equation and has neglected the account’s needs or the opinion leader’s aspirations. It is inherent in the role of the field sales person, acting as the voice of the customer, to help the company avoid this pitfall.

Phase three: Implementation The final, continuing stage of both KAM and KOLM is operational implementation. For key accounts, this means delivering the value promised to them and realising the sales and other returns expected in return. For Key Opinion Leaders, this means working together to create and disseminate knowledge and influence the market in a way that fits both the company’s commercial needs and the clinician’s aspirations. In this respect, however, it is worth noting that, increasingly, KOLs are as likely to be health economists and other market access experts as they are to be leading clinicians. Interestingly, the trap that many companies fall into at this stage is the same for both; they get the give/take balance wrong. With key accounts, for example it is easy to lavish sales time and other resources without ensuring that it is paid back in either sales or non-financial value such as being a reference site or providing market insight. Opinion leaders find it easy to demand financial and non-financial support and often won’t reciprocate with knowledge dissemination unless specifically asked to do so.

New competencies So both KAM and KOLM are a necessary response to our changing market and both are different from the traditional, detailing role of the sales person, even though the issue is often clouded by the thoughtless use of titles and terminology. Making each of these approaches happen in practice requires the sales person to build on their traditional skills and develop three new competencies:

  • Discerning which of their customers might be key accounts or opinion leaders and avoiding the mistake of prioritising everyone.
  • Acting as the voice of the customer to ensure a mutually beneficial relationship is built.
  • Ensuring that the relationship delivers an appropriate return on the effort and resources put into it.

Finally, it should be obvious that, whilst the field team play a critical role in both KAM and KOLM, both approaches are essentially multidisciplinary, usually calling on the skills and resources of marketing, medical affairs, legal, clinical research and others. So, arguably, the most important competence the salesperson can develop is team work, shifting from an essentially independent worker to a team worker and boundary spanner. Successful key account managers who have developed this ability often say that they began this process by being proactive about their customers, being an internal ‘thought leader’, working to make head office see that real KAM and KOLM was needed and initiating the process on their territory. Being the thought leader for your company is not easy, of course, especially at the same time as ‘doing the day job’; but the role is important and salespeople who understand the reality of KAM and KOLM are often the best placed people to lead the company into the future.  

Dr Brian D. Smith is a visiting research fellow at Open University Business School, Europe’s Largest, and runs Pragmedic, a specialist consultancy. Lindsay Bruce is a business writer and visiting research fellow at Cranfield University.

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