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Life Sciences Industry Trends FY23- Sales
November 29, 2022
The spotlight in the Life Sciences world has drastically shifted in the past few years. Think of what the sales landscape looked like just a few years back. Inarguably, the focus was largely on having in-depth knowledge of the product and its scientific features, so to say. This was mainly because ‘scientific’ buyers were buying from people who- like them- understood science. Since then, there has been a rapid shift in the life sciences industry, with a lot of new players coming to the fore. But, who exactly are these new players? What is it that makes them different from the earlier buyers?
Well, these new players are not your traditional ‘scientific’ buyers. They are mostly economic giants, with ballooning procurement capabilities. To state the obvious- these sophisticated, large accounts have different buying and selling needs. Unlike traditional scientific buyers, their focus is more skewed to the commercial aspect of things as compared to the science aspect. Basically, these players demand for less science in the selling process.
This situation is unprecedented for the industry, and this shift has forced life sciences leaders to ask the question- Is more sales-focused talent needed to address these new challenges? The answer is yes. According to a benchmarking study conducted by Alexander Group, life sciences companies spend significantly less on a per-rep basis than high tech companies or medical device companies. The industry also spends 56- 75% less on sales investments such as deal support, post/pre sales support, sales ops and training as compared to other industries. A large sum is being allocated towards sales expenses such as meetings or other benefits.
What this means is that the current investment structure in most companies is designed to support the traditional science-centred model. This in turn explains why most companies are now struggling to keep up with the changing demands of the new ‘business’ players. Inevitably, sales leaders are grappling with a bunch of questions. How should the sellers be better equipped to deal with this new sales landscape? Is an increase in the sales expenses necessary? Is restructuring of the sales expenses enough?
Another challenge that looms over the industry is that it faces both slow-to-no-growth markets and burgeoning investment hungry markets like biopharma, gene therapy and cell therapy. Sales needs to adapt to these polar opposites. Therefore, restructuring is crucial at this point.
Strategy is more important than ever, so are sales leaders. But, how do you attempt to transform models that have been in the picture since as long as you can remember? The solution- start with the basics. Reoptimizing sales should be your go-to mantra. There are several steps that can be taken in that direction-
Re-evaluate your sales investment profile
- The obvious first step is to look at how much you are spending on sales. The spotlight has shifted on sales and your profile should represent that change.
- If you feel that the allocation is enough, deliberate on whether the current profile is optimum for sales enablement.
- Is your profile skewed in favour of the traditional scientist to scientist model?
Analyze your sales roles
- Are your sellers competent to deal with the new challenges in the life sciences industry?
- Do they need training to equip themselves better?
- Are new roles necessary to reach new players?
Improve your sales ops structures
- The need of the hour is to make sure that your sales enablement functions like strategy and your basic support functions like data management are given equal importance.
- Installing pre and post sales support groups can be a starting point
Infact, one would argue that sales enablement has now taken some sort of precedence over basic functions.
Rethink sales comp
Life sciences companies currently spend significantly less on variable pay as compared to high tech companies. A well thought of and comprehensive sales comp strategy to attract and retain talent should be a priority
- An optimal Pay-mix Ratio has the potential to drive performance, motivate reps and overall lead the company towards success. Read more about it here- A Crafty Concoction: The Pay-mix Ratio!
- A more comprehensive sales comp strategy that has the potential to motivate your sales force is very important. A simple base pay and variable pay structure simply does not make the cut. Including alternate comp types like MBOs should be the way to go. Read more about MBOs and other incentives here Understanding Management by Objectives (MBO) and What is Incentive Compensation, afterall?
- Choose automation for your sales comp. To start with, it is not spreadsheets. In simple terms, Automation is a technology-driven solution that minimizes human input. What this means for sales organizations is that their sales comp team can remove the manual, repetitive task work and instead do what matters the most. To learn more about automation and how Kennect’s solution can help you with automating your sales comp, book a demo with us!
Life sciences are evolving, and no change is easy. Sales leaders will continuously be challenged by new demands. To sum up, one can say that skillfully managing sales ROI and structure will not just be an added advantage but a need.
Diya Mathur
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