The situation today
The reality of Key Account Management (KAM) in most Pharmaceutical and Medical Device organisations is that it is largely something that is viewed as a sales activity. Therefore, it is no surprise that, in general, current KAM metrics centre around sales targets and activity.
However, if we consider the behaviours required for Pharmaceutical and Medical Device organisations to succeed as we move towards increasingly complex healthcare environments, we need to question the relevance of these kind of measurements.
Many organisations expect a breadth of departments, such as medical, sales, marketing, pricing, market access and Government affairs to play a role in accounts. However, it is fair to say, that different functions are measured on different things in the majority of cases which is often a cause of KAM programmes failing and internal conflict.
KAM metrics should align teams and encourage effective cross functional working to achieve a common account objective.
Qualitative and Quantitative KAM Metrics
Evidence of best practice demonstrates that KAM needs a balance of qualitative and quantitative metrics to embed and exact behavioural change.
Quantitative metrics, such as sales targets and activity levels have a place, but perhaps not in their current guise.
The critical success factor for Key Account Management is to ensure that the cross functional team work effectively as one cohesive unit.
Therefore, we need to consider metrics that apply to everyone in that team to create a level playing field.
Let’s look at activity in the context of this approach to KAM.
Traditionally, Pharmaceutical and Medical Device organisations have provided their teams with a list of target external stakeholders that must be seen in order to drive the business. A team of Sales Force Excellence (SFE) analysts generally produce a predicted frequency report to indicate the number of times an individual should be seen in order to make a decision, and this generates a frequency target.
It is not uncommon for customer facing individuals to have a target list of 120 external stakeholders that should be seen at least three times a quarter. We need to ask ourselves, how many of these 120 people are actually going to make decisions or change their behaviour to drive our business?
What gets measured, gets done.
We all recognise the last minute flurry of activity to secure appointments with significant stakeholders in order to achieve the desired ‘call rate’ laid down. But does this really drive the right behaviours? Does it lead to account progression? Or does it lead to meetings for the sake of ticking a box?
Best practice KAM models have moved away from traditional sales and activity metrics.
Cross functional account teams should understand their accounts with a forensic level of detail. This is a good reason for account teams to have a manageable number of accounts.
From this, they should know who the key decision makers are in great detail. They should know who they need to see, why they need to see them, which members of the cross functional team should see them and how often they should see them in order to achieve their account objective.
Note that I say ‘should’ a lot in the above paragraph. If an organisation is relatively new to KAM, then their cross functional teams will take time to operate in this way. Organisations need to allow their teams the scope to reach this point when implementing KAM as a way of working.
Metrics should be in line with the stage of KAM that your organisation is at.
We know from CEB (now Gartner) that the average account has a decision making unit of 5.4 key stakeholders. We also know that it can take multiple calls to change an individual’s behaviour, let alone the behaviour of a group of stakeholders in complex accounts.
Yes, the decision maker may need to be seen 15 times in a specific quarter, but that should be based on mutual agreement between the stakeholder and the cross functional account team.
The frequency of the appointments means nothing at all, unless each meeting is progressing towards the achievement of an agreed account objective.
An account team member can achieve a great deal in two one hour high quality meetings versus multiple short meetings. Yet in many organisations today, the account team who see an external stakeholder twenty times are more likely to be rewarded for their efforts than the team who sees them twice.
Similarly, ensuring that the right cross functional team member meets with the right external stakeholder is critically important. If multiple team members see the external stakeholder, without good reason and without being clear on why they are there, then there is a high risk of the door being firmly closed to everyone.
This is why it is so important to align metrics to encourage effective cross functional working. Employing this approach negates internal competition to achieve ‘my’ call rate, and encourages cohesive team work, which in turn leads to a more positive experience for the external stakeholder.
Regardless of which country you work in, healthcare professionals, payers and patients are busy people. They have challenges to which Pharmaceutical and Medical Device Organisations can add real value based solutions. They do not need to be seen by multiple ‘reps*’ who clearly don’t speak to each other to align their approach.
(*Note: reps in the mind of external stakeholders are people who work for a Pharmaceutical or Medical Device organisation regardless of their role or function).
Effective metrics for KAM measure the quality of cross functional working and appropriate high quality engagement with the right external stakeholders.
Being brave and bold
I once observed a cross functional account team who had a single common budget across marketing, medical, sales, pricing and market access. Everyone had to agree where their resources were allocated. Everyone within the team had a role to play in ensuring that they achieved their objectives within budget, regardless of whether they had spent money on research and development or audio visual meetings with health care professionals.
This is a novel approach, and one which required courage and excellent teamwork. However, it can be done when you have conviction in the strength of your collective decision making ability as an account team.
One aligned budget for one aligned cross functional account team.
A new approach to KAM metrics requires strong leadership.
Measuring the quality of cross functional working, or advocacy development will provide much greater insight into the impact that a cross functional account team is having than measuring coverage and frequency, for example.
Certainly, there will be instances when it is important to measure attainment of sales versus target. And of course, this is not a metric which applies to everyone in the account team. But if you are serious about embedding KAM within your organisation as a way of working, then you have to be realistic about driving the right behaviours to achieve account objectives.
It is important to drive for consistency. So whichever metrics you decide upon, you should create a set of criteria which is applicable to all account teams. This will enable you to benchmark easily and remove objectivity from the process.
As a leader within your organisation, you have to be receptive to thinking differently. Understand why it is more impactful to measure the quality of the account plans rather than the quantity.
KAM metrics need to recognise the longer term too.
All too often KAM metrics in the Pharmaceutical and Medical Device industries are short term. Yet we know, very well, that it can take years to actually sell a new product in the current environment.
To retain and motivate account teams, leaders need to balance short and longer term metrics. Reward and recognition should be linked to metrics, so we need to consider things like advocacy progression, formulary inclusions, tender submissions, diagnostics and so on.
Change makes most of us feel uncomfortable. So start small.
Consider implementing one or two new qualitative or quantitative metrics for your next review period.
Devise a set of questions that can be asked by account leaders, such as; are the cross functional account team achieving their agreed actions in line with the account plan and agreed timelines? Do all account team members understand and work towards the account objective? Is activity aligned to the account plan decision making unit? Has there been advocacy progression? Is communication across the account team effective?
Each organisation will have a different set of questions that are appropriate for their account teams, depending on the product lifecycle and market archetype.
The important thing is to measure things that will drive the right behaviours across the account team. If these behaviours prevail, then the external stakeholder experience will improve and the achievement of account objectives will follow.