Building and refreshing a Life Sciences technical sales team, with GlobalScot Mike Butler
Mike Butler, a GlobalScot since 2003, has acted as an Executive and non-Executive for start-up and early- to mid-revenue Life Science companies for more than 20 years in America, Europe and Asia. He recently founded Unit Life Sciences www.unitlifesciences.com), an advisory firm which helps Life Science company leaders turn their ideas into commercial success. Formerly, Mike held Executive roles at Xceleron (CEO), Aptuit (President), MDS-Pharma Services (Group VP), and Huntingdon Life Sciences (Director).
and refreshing a Life Sciences technical sales team is no easy task. Knowledgeable and experienced in both the ups and downs of this, we asked Mike to share his key insights on the challenges, considerations and questions you need to pose for a successful outcome…
In October 2018, I read a headline entitled “Novartis has scrapped a fifth of its programs in pursuit of ‘truly impactful’ drugs”. I instantly recalled an episode 20 years’ earlier when Novartis cancelled large late-stage development programs. What I didn’t know then was that the impact of those, and other, cancellations would be short-lived and those of us engaged in outsourced pharmaceutical R&D (let’s call it outsourced R&D) were entering a period of unprecedented growth that would change the nature of drug development and propel our careers forward. In this article, I want to share why I think we are undergoing positive change that exceeds that which I experienced 20 years ago and why the big guiding principles I learned about building and managing successful Life Sciences sales organizations apply just as much today as they did then
“…it is important to avoid the common mistake of ramping up a large sales force too quickly”
Isn’t change constant? Why the need to refresh sales?
In the late 90s into the 00s, strong growth in outsourced R&D was driven by demand for preclinical and early clinical development of biologics and small molecules generated by HTS and combinatorial chemistry. To succeed, our sales teams had to promote and compete for new preclinical and first-in-man protocols, and more high-throughput use of analytical techniques like LC-MS/MS and ELISA, often from much smaller and more geographically dispersed customers than we were used to.
Today’s new opportunities for outsourced R&D organizations are quite different, but just as large and unprecedented as they were 20 years ago. A strong flow of venture funds and accompanying IPO flows now enable smaller pharmaceutical companies to participate in the large secondary market for assets. Technologies for biologics manufacturing and genotype and phenotype analysis (for example) fuel our drive towards more efficiently produced and personalized medicines. Those demand- and supply-side drivers have lead to new technology startups, acquisitions by larger companies, new synergies and expansion into new geographies. The executives of participating companies may be well served by the lessons of the past.
“…technology startups, large companies acquiring technology innovators, companies trying to promote new synergies or enter new territories will need to sell themselves to the market”
Is a sales force even necessary?
There is a difference between whether an outsourced service is bought or sold. Very well-known companies with strong brand recognition providing a long-established service are more likely to be approached by companies seeking help. In those instances, it’s more likely that their service is being bought and that the buying process is aided by strong marketing and some type of customer service group. Conversely, technology startups, large companies acquiring technology innovators, companies trying to promote new synergies or enter new territories will need to sell themselves to the market. For the latter, there are guiding principles worth remembering. Sales is an iterative process, much like operations, and the more a process is repeated, the more efficient and cheaper it becomes. The entire organization can learn how customers react to a new product and hiring a full sales team too fast leads to a high burn rate and unmet revenue expectations. For this limited commentary, we will greatly simplify things to describe the sales process: understand the market, manage the sales team and manage the sales learning curve.
“Mapping the go-to-market approach can be done carefully to avoid customer confusion and sales rep frustration”
Connecting with the right customers
With any change, there comes a need to reach new customers. Connecting with those customers requires that we consider the nature of the people we are trying to communicate with and the ways in which are attempting to do so. For most of us our customers are scientists. Scientists, like everyone else, employ a mixture of logic, emotion, and ego when purchasing something that is large and important. Scientists, however, have been trained to combine their curiosity with a desire for corroborating information and eventual validation. They may become skeptical, therefore, if confronted with a message designed to be persuasive before they are ready. Timing and content is very important.
Whether customers exist in new countries, companies, or parts of legacy customer organizations, we also must consider the best way to reach them. Can we do it with direct sales, through an existing sales rep or through a channel partner? Is there value in cross-selling to an existing large customer, especially an international one? If there is a need to launch more than one new service, as may be the case in a company that is rapidly acquiring and rolling up, it is important to be very clear about what needs to be done when and where. Mapping the go-to-market approach can be done carefully to avoid customer confusion and sales rep frustration.
“A well-scrubbed pipeline and a rolling forecast represent the two most important sales team outputs”
Can’t “experienced” sales reps manage themselves?
Sales team management involves well defined lead and lag performance indicators, akin to operational KPIs. It is, after all, management of the sales team and its pipeline of future projects that allows executives to control operational scheduling, revenue forecasting, cash management, capital expenditure and investor relations. If the sales team delivers on a well-scrubbed plan, everything falls into place. Conversely, if the sales team can’t deliver predictably, blood pressures rise. The big things to remember are the overall target, sales force yield, converted sales composition, rep compensation, rep quotas, pipeline and forecasting. A well-scrubbed pipeline and a rolling forecast represent the two most important sales team outputs. They provide business-critical predictive information that informs the direction of the sales force and the rest of the company.
“The sales learning curve is different from the sales rep learning curve and involves all customer facing people”
Horses for courses
The sales learning curve can be thought of as the context or framework for everything else. The sales learning curve is different from the sales rep learning curve and involves all customer facing people (e.g., executives, marketing, project managers, study directors, sales support, etc.). Every company experiences a unique learning process to understand customer buying behavior, service fit with demand, time to sale closure and sales rep learning time. Understanding this curve informs sales rep hiring, sales yield, future revenue and cash generation. Sales rep hiring is impacted most by the position on the learning curve. On the most basic level, a sales rep introducing a new service or opening a new geographic territory will differ from one selling a legacy service in an established territory. The new service/territory rep may be more technically literate, enjoy working alone and likely won’t hired from a traditional organization. A legacy service rep, on the other hand, will be more comfortable with a structured environment and may be more likely to be found in traditional organizations.
My final thought on what it takes to build or refresh a Life Sciences sales team relates to what it takes to be a good sales-person today. When I was starting out twenty-odd years ago, common wisdom held that customer relationships were the most important factor for sales success. Since then, I have seen that technical knowledge, intuition and problem-solving have become much more important for sales success. Research1 into the subject has shown that in complex business-to-business sales highly knowledgeable, instinctive, and problem-solving traits account for 78% of success whilst relationship-building accounts for only 7%.
This commentary is far from comprehensive; there is a lot to be said about the important internal interactions between operations and marketing, for example. Hopefully the reader takes away a sense of how sales can be managed as quantitatively as operations and how doing so leads to positive business outcomes. Conversely, it is important to avoid the common mistake of ramping up a large sales force too quickly. There is great potential for today’s outsourced R&D company leaders and getting the basics right the first time goes a long way to enjoying the ride.
GlobalScots like Mike Butler have a wealth of knowledge and expertise across a multitude of sector, market and business function areas. Please get in touch to find out more and see what the GlobalScot network can do for you. Visit www.globalscot.com for more information.
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GlobalScots are members of a worldwide network of around 650 business professionals who have built their reputations in the highest echelons of the international marketplace. Since 2001, they have been giving back to Scotland by donating their time and expertise for the benefit of Scotland’s future prosperity. If you are a Scottish company with serious ambitions to grow, looking for expert insight like this, we can help you unlock your potential!.