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Sales Force

Sales Force

A company's sales force consists of its staff of salespeople. The role of the sales force depends to a large extent on whether a company is selling directly to consumers or to other businesses. In consumer sales, the sales force is typically concerned simply with taking and closing orders. These salespeople are not responsible for creating demand for the product, since, theoretically, demand for the product has already been created by marketing efforts such as advertising campaigns and promotional activities. Salespeople may provide the consumer with some product information, but individuals involved in consumer sales are often not concerned with maintaining long-term customer relationships. Examples of consumer sales forces include automobile salespersons and the sales staffs found in a variety of retail stores.

The sales force takes on a completely different role in business-to-business sales. Industrial sales forces, for example, may be required to perform a variety of functions. These include prospecting for new customers and qualifying leads, explaining who the company is and what its products can do, closing orders, negotiating prices, servicing accounts, gathering competitive and market information, and allocating products during times of shortages.

Within the business-to-business market, a distinction can be made between selling to retailers, industrial sales, and other types of business-to-business sales and marketing. The concerns and activities of the sales force tend to vary in each type of business market. What they have in common, however, is the desire of the sales force to establish a long-term relationship with each of its customers and to provide service in a variety of ways.

In selling to retailers, for example, the sales force is not concerned with creating demand. Since consumer demand is more a function of advertising and promotion, the sales force is more concerned with obtaining shelf space in the retailer's store. The sales force may also attempt to obtain more promotion support from the retailer. The sales force relies on sophisticated marketing data to make a convincing presentation to the retailer in order to achieve its sales and marketing objectives.

The largest sales forces are involved in industrial selling. An average industrial field sales force ranges in size from 20 to 60 people and is responsible for selling throughout the United States. The sales force may be organized around traditional geographic territories or around specific customers, markets, and products. An effective sales force consists of individuals who can relate well to decision makers and help them solve their problems. A sales manager or supervisor typically provides the sales force with guidance and discipline. Within the company the sales force may receive support in the form of specialized training, technical backup, inside sales staff, and product literature. Direct mail and other types of marketing efforts can be employed to provide the sales force with qualified leads.

In recent years, costs associated with making single business-to-business industrial sales calls have risen dramatically. As a consequence, many businesses have redoubled their efforts to make sure that they get the most possible efficiency out of their sales force (by expanding their territories, increasing their duties, etc.).

Sales managers and supervisors can measure the efficiency of their sales force using several criteria. These include the average number of sales calls per salesperson per day, the average sales-call time per contact, the average revenue and cost per sales call, the entertainment cost per sales call, and the percentage of orders per 100 sales calls. The sales force can also be evaluated in terms of how many new customers were acquired and how many customers were lost during a specific period. The expense of a sales-force can be measured by monitoring the sales-force-to-sales ratio, or sales force cost as a percentage of total sales.

Using such criteria to evaluate the effectiveness of the sales force allows companies to make adjustments to improve its efficiency. If the sales force is calling on customers too often, for example, it may be possible to reduce the size of the sales force. If the sales force is servicing customers as well as selling to them, it may be possible to shift the service function to lower-paid personnel.

In industrial and other business-to-business sales, the sales force represents a key link between the manufacturer and the buyer. The sales force is often involved in selling technical applications and must work with several different contacts within a customer's organization. Industrial salespeople tend, on average, to be better educated than their consumer counterparts, and to be better paid. However, their cost as a percentage of sales is lower than in consumer sales, because industrial and business-to-business sales generally involve higher-ticket items or a larger volume of goods and services.

The sales force may be compensated in one of three ways: straight salary, straight commission, or a combination of salary plus commission. The majority of today's businesses utilize a combination of salary plus commission to compensate their sales forces, and fewer companies based their sales force compensation on straight commission. It appears that, as a percentage of all sales forces, the use of straight salaries remains constant. Whatever type of compensation system is used for the sales force, the important consideration is that the compensation adequately motivates the sales force to perform its best.

see also Business-to-Consumer; Business-to-Business; Manufacturers' Agents; Personal Selling; Sales Commissions

BIBLIOGRAPHY

Boone, Louis E., and David L. Kurtz. Contemporary Marketing 2005. Thomson South-Western, 2005.

Calvin, Robert J. Sales Management. McGraw-Hill, 2004.

Cichelli, David J. Compensating the Sales Force: A Practical Guide to Designing Winning Sales Compensation Plans." McGraw-Hill, 2004.

Cohon, Charles M. The Sales Force. Manufacturers and Agents National Education Foundation, 2004.

Gitomer, Jeffrey. The Sales Bible: The Ultimate Sales Resource. John Wiley & Sons, 2003.

                            Hillstrom, Northern Lights

                             updated by Magee, ECDI

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Pharmaceutical Sales Representative

Pharmaceutical Sales Representative

The people who tell others about new medicinal preparations usually work for pharmaceutical manufacturing companies as pharmaceutical sales representatives. To keep informed about new products, pharmaceutical sales representatives are continuously learning as part of their jobs.

Pharmaceutical sales representatives talk to those who influence the prescription and sale of medicines. Such people include: those who write prescriptions (doctors, nurse practitioners, and dentists), the pharmacists who legally sell the preparations, and the policymakers who determine which drugs are covered by health management organizations and health insurance plans. Some are involved in advertisement of specific drug preparations directly to consumers.

A four-year bachelor's degree (B.S. or B.A.) with a major in chemistry, microbiology, animal biology, or pharmacology is the usual minimum preparation for this career. A better general understanding of the actions of drug preparations is obtained through an entry-level pharmacy degree (which is now in most states a Doctor of Pharmacy [Pharm.D.] degree), requiring six years after high school to complete. People with nonscience baccalaureate majors such as business or marketing will have the most "catching up" to do. In high school a person interested in a pharmaceutical sales career should take college preparatory courses with a science and mathematics emphasis.

see also Clinical Trials; Pharmacologist

Margaret A. Weck

Bibliography

Clayton, Anne. Insight into a Career in Pharmaceutical Sales, 3rd ed. Northbrook, IL: Marketing Essentials, Inc., 2001.

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Pharmaceutical Sales Representative

Pharmaceutical Sales Representative

Education and Training: Two to four years of college and on-the-job training

Salary: Median—$60,130 per year

Employment Outlook: Good

Definition and Nature of the Work

Pharmaceutical sales representatives are employed by drug companies. They distribute information about their companies' products to physicians, hospital nurses, and medical technicians. They do not take drug orders from these health care practitioners but instead try to persuade doctors to prescribe more of their companies' drugs. Patients then buy the drugs.

Most doctors are very busy, and sales representatives usually have no more than five or six minutes with them. In that time the representative must describe their company's newest products. They outline what a drug is designed to do and how it works. They also explain its advantages over older drugs, attempting to convince doctors as to why their product is better than others.

Sales representatives must have a basic knowledge of how the human body works. They must also have some understanding of disease and pharmacology (the study of drugs and their effects on humans), because doctors will question sales representatives about drugs and their side effects. Sales representatives must also know which drugs will be of interest to doctors in different specialties. Sales representatives are assigned territories based on postal zip codes. They make up their own itineraries, concentrating on doctors who write the most prescriptions. This information is available from surveys of pharmacists. Sales persons may leave samples of new drugs with doctors and must keep careful records concerning the samples they leave.

Sales representatives must be able to speak clearly and concisely under pressure. They must have pleasant personalities and be able to build long-lasting relationships with doctors. In addition, sales representatives must be able to accept rejection. About 40 percent of doctors refuse to see sales persons. Others will not see them when they are very busy.

Education and Training Requirements

To become a pharmaceutical sales person, a person must have a high school diploma. Most employers prefer to hire college graduates, preferably with a bachelor's degree in science. However, two years of college should be sufficient to qualify for most jobs. Drug companies provide on-the-job training, selecting trainees on the basis of their verbal and social skills. Training consists of intensive study followed by supervised field work.

Representatives must keep abreast of current medical and product knowledge throughout their careers. They attend regular meetings to get product information. They must maintain a general knowledge of advances in medicine. Correspondence courses are available through their company and the Certified Medical Representatives Institute, which offers certification.

Getting the Job

College students should ask their college placement office for information about applying to become a pharmaceutical sales representative trainee. Representatives of drug companies may also visit campuses. Otherwise, interested individuals should write to major drug companies and request interviews. Once a person is selected as a trainee, a job is guaranteed.

Advancement Possibilities and Employment Outlook

Some representatives prefer to stay in the field. Some advance to supervisory and training positions. A few advance to administrative and planning posts. Occasionally a sales person will transfer to another department in the company or move into a related health occupation.

Employment of sales representatives is expected to grow as fast as average through 2014, according to the U.S. Bureau of Labor Statistics. The job outlook for pharmaceutical sales representatives is good. Some companies are expanding rapidly and will need to hire additional representatives.

Working Conditions

Pharmaceutical sales representatives set their own hours to fit doctors' schedules, often having appointments in the early morning, in the evening, or at lunch. Representatives may spend much time traveling and often have to wait to see doctors despite appointments. The general atmosphere in the drug industry is becoming increasingly competitive. Pharmaceutical sales representatives must be able to cope with stressful situations caused by competition with other sales representatives for access to doctors during their limited free time.

Where to Go for More Information

Certified Medical Representatives Institute, Inc.
4423 Pheasant Ridge Rd., Ste. 100
Roanoke, VA 24014-5274
(800) 274-2674
http://www.cmrinstitute.org

Earnings and Benefits

Commissions account for a large proportion of earnings for sales representatives. Depending on the company, roughly 10 to 20 percent of their earnings are derived from commissions based on the drugs ordered by doctors. The Bureau of Labor Statistics reports that in May 2004 the median salary for pharmaceutical sales representatives was $60,130 per year including commissions. Sales persons receive health insurance and paid vacations and holidays. They also receive free cars and some travel expenses.

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