Pfizer, Doctors, Sales and Trust

NEW YORK (Reuters) – Pfizer Inc. said last week it would cut its U.S. sales force by about 20 percent, or some 2,200 jobs, as part of a comprehensive cost-cutting program.

Good move. Wrong reason.

Pfizer is the world’s largest pharmaceutical maker, with a vaunted sales force. The cut is big news. But at least in the press, this is all about cost reductions:

Prudential Equity analyst Tim Anderson called the cuts "helpful."

"The easier way to win is to have a pipeline (of new drugs in development), but until you have more sources of growth ahead of you, cutting costs is the smart thing to do," Anderson said.

"I wouldn’t be surprised if this was just the first step, but just how low to go is a very tough question to answer," Anderson added. "I actually don’t think the industry knows how far they can cut."

The fact is, pharmaceutical sales costs are only high relatively—because their productivity has plummeted. The vast majority of sales calls don’t result in being seen by the doctor, and when they do, the average time is something like 90 seconds.

There are lots of reasons for this, but one stands out—the low level of trust in the relationship between rep and physician.

If there was ever a potential role for a trusted advisory relationship, it ought to be the one between a physician and a pharmaceutical expert. No doctor can afford to keep up with the bewildering array of pharmacological, regulatory and treatment-related details of all the drugs in existence. Yet drugs are increasingly important.

Enter—one would wish—an unbiased rep, able to give trustworthy advice, focused on helping the physician and patient’s health alone.

Indeed, that’s why many enter the pharmaceutical business. But it hasn’t worked out that way. Rep sales forces, through an array of complex short-term measurements tied to incentive schemes, and deep behavioral training on how to maximize seller impact at the transaction level, have come to be managed as engines of revenue to the sellers, rather than trusted advisors to the physicians.

The result, paradoxically, is lower revenue.

It’s always that way when the paradox is violated. If you want to sell, stop trying to sell. If you want to make money, stop trying to make money. If you drop those as overt objectives at the transactional level, and instead focus on serving the true needs and wants of your clients at the relationship level, you will—paradoxically—end up selling a lot, and making a lot of money. But only if you don’t set out to do so.

Profit is a byproduct of great customer focus—not the purpose itself. If you subordinate focus to profit, you get neither. The physicians know this, and have voted.

The pharmaceutical industry could use some improvement in its perceived level of trust, and it’s not a PR problem. This is a golden opportunity for Pfizer to exert some of its traditional industry leadership by leading the way to a truly customer-focused model based on greater trust with physicians.