“We’re different!”
Practitioners often hear these words while attempting to deploy Lean Six Sigma. While the phrase is sometimes viewed as an excuse to avoid change, in the case of the marketing and sales function within a pharmaceutical organization, it may hold some validity.
This article explores ten reasons why sales and marketing claim to be different in their implementation of Lean Six Sigma. In some instances, the organizations may be correct in their claim, and the deployment might require some flexibility and creativity to be successful. In other areas, they may really be no different than many other organizations. It is important for practitioners to understand what claims of difference are true and which are false so that they can blend traditional and special techniques to make Lean Six Sigma work in marketing and sales.
Fact or Fiction?
Following are the top 10 reasons why those deploying Lean Six Sigma in a pharmaceutical sales and marketing organization claim to be different.
1. It’s not clear who the customer is. A first step in any Lean Six Sigma implementation is determining who the customer is. Gathering voice of the customer and improving processes are all focused on improving the customer experience with the organization and its products and services. If practitioners don’t know who the customer is, they are blocked from the start.
In the pharmaceutical industry, it is clear who the consumer of the product is: the patient. But the healthcare provider (HCP) recommends the product to the patient and then writes the prescription for that product. The pharmacies actually purchase the product from the pharmaceutical (pharma) manufacturers. Then again, it is the insurance companies and other third-party payers who end up paying for the product. So, who is the Customer? Are they all customers? Who should practitioners gather voice of the customer from? Who should they market and sell to? Certainly it is easy to understand why pharma sales and marketing functions claim that they are different.
But this claim is only partially TRUE. For example, the manufacturers of food products market heavily to the public, yet it is the food chains that purchase the product from them. The consumer eats and pays for the product, so it is a little different than the pharmaceutical situation. While the model of a manufacturer trying to directly influence a consumer – even though intervening organizations are the manufacturer’s actual customer – is quite common, the big difference with pharma is who pays for the product. That additional level of complexity requires improvement activities to have a different focus than the traditional organization.
2. Measuring the impact of marketing and sales efforts is challenging. What is the effect of an advertising campaign? For that matter, what is the impact of a sales rep calling on a physician? Measuring this impact is difficult. If there is an impact, there will likely be a time lag between the sales call and the writing of a prescription for a patient. In addition, changes to multiple aspects of the sales and marketing efforts go on simultaneously, which adds to the difficulty of identifying the single factor that actually impacted sales. So this claim is TRUE – and highly relevant. But it does not preclude pharma sales and marketing from the use of Lean Six Sigma.
This challenge, however, does focus attention on the need for projects related to the metrics used to drive the business. One specific area of Lean Six Sigma that is pertinent is measurement system analysis. Measurement systems often are bottlenecks to improvement. Fixing and improving the measurement systems have, in some cases, identified that no improvement to the underlying process was necessary; by fixing the measurements, the so-called problem went away. As to the issue of multiple factors changing simultaneously, design of experiments can address this. A good example of the use of design of experiments in marketing was documented to substantially improve the effectiveness of an email campaign in selling products (Almquist and Wyner, 2001). The metrics are suspect, and many factors under the marketing and sales organization’s control are changing at the same time. But Lean Six Sigma can address these issues and improve the effectiveness of the organization.
3. The pharmaceutical industry is highly regulated. In the United States, the Food and Drug Administration (FDA) oversees much of the activities of a pharma firm. Similar institutions oversee the pharma industries in other countries. This oversight tends to limit the opportunity for change, and especially affects which products can be sold, as well as the actual manufacturing processes. It also impacts sales and marketing. Limits and controls on the use of promotional items is just one area that demonstrates this impact. These limits make the claim of a valid distinction TRUE. But just as in the case above, this characteristic of the pharma industry does not preclude the changes that Lean Six Sigma can foster.
It does mean that practitioners must take more care to explore and identify which limits are real boundaries, and which are simply perceived to be boundaries, but can be safely ignored. This is similar to the telecommunications industry when it evolved from a monopoly to a competitive environment. One aspect of Lean Six Sigma is change management. This deals with the people-related issues of facilitating change. Thus, Lean Six Sigma offers a methodology to deal with this resistance to change.
4. Sales and marketing is not a process – it is all about relationships. Fully documented process maps and flows don’t exist in sales and marketing to the same extent as in manufacturing and other organizational entities. In fact, they might not exist at all. Lean Six Sigma is a fundamental departure from the traditional thinking of marketers because they often view what they do as a series of independent projects, built on relationships they develop with HCPs.
Then again, the most successful sales reps often are the ones who are organized and plan out what they are going to do on every sales call. They plan their days to maximize the value added to the HCP and to optimize their own time. Whether they realize it or not, these reps are using a process – they are doing more than simply showing up, handing out promotional items and being friendly. In addition, by developing a repeatable sales process, they are overcoming inefficiencies, thus leaving more time for creative work – which sales and marketing team members thrive on. Therefore, in this case, the claim of “we are different” is FALSE.
5. Gathering voice of the customer (VOC) can be restrictive and expensive. The FDA, along with other government agencies, is making it harder for pharma sales reps to call on HCPs. The FDA also greatly restricts the ability of pharma sales reps to directly market to or make contact with patients. While sales reps and marketing people can still gather VOC feedback and information from HCPs, they often have to pay an honorarium for this information. Sometimes small focus groups of HCP thought leaders are used to gather VOC of macro issues. Then a larger sample of HCPs is used to refine the VOC.
Because of all the restrictions and compliance issues, gathering VOC can be time consuming and costly. Therefore, pharma is indeed different when it comes to gathering VOC – making their claim of difference TRUE. This means sales and marketing teams must use greater efficiency, thought and care in laying out the design of the VOC data collection. Useful information can be gathered from patients, HCPs, payers and pharmacies, but it might require patience and creativity to reduce the time and cost of gathering the VOC.
6. Data is often unavailable and is discrete in nature. A good deal of quantitative data is recorded by the sales rep, including the number of sales calls for the day, or the time spent with the HCP or number of details delivered or whether second and third messages were given. While this data is useful for analysis, the key to understanding the process and improving it lies with the non-quantitative, or discrete, performance data.
This performance data measures how well the activities are performed, not just whether they were performed or not, and how people feel or react to sales reps, products, advertising and messages, which is more difficult to capture. But does the need for this data really set sales and marketing teams apart? No, this is FALSE. All organizations need to have a handle on how their people are performing. Just relying on gross sales or share of market numbers is not adequate to improve performance. Similarly, organizations need to identify those variables that impact sales or market share so that they can take improvement actions. Marketing needs to accurately know the impact and effect of their projects and actions – and faces the same challenges in collecting this information.
7. Decentralization presents challenges for improvement team efforts. In a plant or office environment, it is relatively easy to have frequent meetings for the team to work through Lean Six Sigma projects. Sales reps are decentralized, and pulling them from their field activities requires great commitment and flexibility. Many sales organizations are faced with a similar problem. They are reluctant to have team members travel to a central location to participate in improvement activities. The cost of travel coupled with the lost sales opportunities adds considerable expense to improvement team activities. Many organizations face this same situation, so a claim of difference is FALSE.
To combat this challenge, many decentralized sales organizations are using more creative approaches utilizing electronic meeting technology. And when face-to-face meetings are required to work through critical steps of an improvement project, some organizations design these meetings as full-day or multi-day events to minimize overall travel time and expenses.
8. Sales and marketing leadership view Lean Six Sigma as being only for manufacturing. If sales and marketing are indeed a series of processes and that all processes contain waste and that the removal of that waste can yield improvements, then it is clear that Lean Six Sigma is indeed applicable to sales and marketing. While many of the more powerful and rigorous statistical methods used in other parts of the organization may not always be appropriate for the sales and marketing function, there are plenty of basic tools, such as value stream mapping, cause and effect matrix, brainstorming, histograms, box plots and run charts, that can suffice for many of the projects that are done in sales and marketing. In situations where there is sufficient amounts of valid data, there is no reason that sales and marketing people can’t utilize the more advanced technical tools of both Lean and statistics. Their claim of a difference is FALSE.
9. Many external influences affect sales of prescription drugs. At a macro-economic level, factors such as disease prevalence, ability to pay for the drugs and governmental approval to sell a drug are just some of the issues to be dealt with. At a smaller scale, there are issues around subtle changes to the marketplace, such as no-call limitations, that distinguish the pharmaceutical marketing environment. In addition, there also is the issue that the writing of a prescription does not actually guarantee the sale of product. For example, individuals close to the border may choose to buy their medicine in another country for price reasons. Furthermore, cultural elements can impact sales, or at least the collection of sales data. For example, in Mexico a HCP can write a prescription for an erectile dysfunction drug. The patient, because of some perceived stigma, may get this filled over the counter in a local pharmacia where the actual sales information can not be captured by the company. Many organizations have recalls or “bad press,” which are external influences affecting sales. Is this a valid argument that sales and marketing in the pharmaceutical industry is different? No, this is FALSE. These influences do not prevent Lean Six Sigma from effectively identifying opportunities for improvement in sales and marketing efforts. As process-focused thinking spreads through organizations, opportunities to execute activities at a faster pace, with less waste, will naturally surface.
10. There are barriers to entry. The existence of patent protection as a key barrier to entry makes the pharma industry unique – this is TRUE. But these barriers can provide greater impetus to use Lean Six Sigma. One of the key characteristics of Lean is to identify opportunities to execute tasks and activities faster, and with less waste. So, the faster organizations can bring a product to market (including FDA approval), the more time they have to make use of the protection offered by a patent. The faster organizations can evaluate the effectiveness of a marketing campaign, the sooner they will be able to adjust and improve that same campaign. So, while patent protection does make the marketing of drugs unique, it actually makes it imperative that Lean Six Sigma be used to make the most of the protected period of time. Thus, the monopolistic opportunity afforded to sales and marketing in the pharma industry is unique.
Differences Can Be Overcome
Overall, some of the reasons given as to why sales and marketing are different in the pharmaceutical industry are valid. The metrics used to monitor performance definitely need attention. The oversight by the FDA (and others) creates a natural resistance to change that must be overcome. Gathering VOC is difficult, but can be done. And the unique importance of patent protection is real. While all of these characteristics of the business environment create a distinctive situation, they are amenable to the deployment of Lean Six Sigma to improve the speed and effectiveness of the processes and tasks undertaken in the sales and marketing function.
References
1. Almquist, Eric, and Gordon Wyner, 2001. Boost your marketing ROI with Experimental Design. Harvard Business Review, October, 2001.
