Account manager ROI	November 2008

Med Ad News spoke with Chris Blenk, senior principle, IMS Consulting (imshealth.com), about how companies can measure the return on investment they receive from their account management teams.

Med Ad News: Are companies investing more in managed care sales forces?

Chris Blenk: It’s always been extremely important. It’s in the last two or three years it’s gone to a new plateau with Part D, where there was an increase in the workload as you had to call on two different groups at the same company to contract for Part D. There’s additional attention that’s required to sort out the different companies and their markets and the impact that’s had and the visibility that’s been provided into pricing and rebates.

There are a few different areas of budgeting. There’s headcount, there’s data, and then there’s what I consider effectiveness around managed markets. From a headcount perspective, I think if you said that they’re proportionally budgeting more for managed markets, that would probably be correct. If you said they’re increasing their budgets in that area from a headcount perspective, I can’t say I’ve seen that except that it changes by company. Different companies at different stages of growth are going to have different situations. Some of the smaller companies are growing, and they’re needing to add to their managed markets staff. And others have diminishing portfolios, but even the ones that are diminishing in their portfolio that are cutting down on their prescriber sales forces tend to be keeping their managed markets sales forces disproportionately higher. They’re not cutting back as far or they’re not cutting back at all on their managed markets staff. So, you could say proportionately, they’re budgeting more.

The salaries, generally, have always been higher for the managed care reps than your average reps on the prescriber side, but I haven’t heard anybody come back to me and say that they’re increasing the amount that they’re paying for those. There are people being freed up a little bit from other companies, but still good talent is hard to find, has always been hard to find with the right set of skills and personality, etc.

Med Ad News: Is it possible to measure the effectiveness of a managed care sales force to judge ROI?

Chris Blenk: Yeah, but I don’t think of them as being expensive. When you look at the impact that they have on your revenue, versus the cost if you’re not managing your tier position and you’re not managing your relationships with these clients. Sometimes it’s not a matter of just contracting. Sometimes it’s a matter of having relationships and communication and information provided so that you don’t get put on the wrong tier even if you’re not contracting.

I don’t look at managed care reps as being expensive as much as I look at them as absolutely critical, which is why I think they’re not being let go as things change here. In terms of measuring the ROI, you can measure effectiveness of managed care account reps, but it’s challenging in a lot of cases. People try to measure them based on the sales or prescriptions that go through different accounts that they have or they try to measure them on the number of contracts they’ve won. But these things can be a little misleading or misdirecting at times. I don’t think anyone that I’ve talked to considers them to be the ideal metrics. Because there are things that change over time. You go into a contract with a certain set of assumptions based on a certain account profile, and over time the account changes. You’ve got changes in ownership, you’ve got acquisitions, divestitures, membership changes. And then you’ve got market events that just weren’t expected that are going to happen. So, to measure someone who gets a few contracts a year or so on that is a challenging thing. Then to measure people just on how many contracts you have can sometimes drive the behavior of “get the contracts at all costs.”

Some people have toyed with evaluating the reps versus the planned ROI for contracts, but that type of retrospective analysis isn’t done as frequently as you might think, just based on a lot of those factors I just mentioned.

What can be done too is to set objectives in certain situations, so if you have a clear strategy or situation where you’re trying to gain a certain amount of contracts in certain areas or you’ve targeted your accounts and you know which ones you want to contract with and what positions you want to be on with them and you set objectives or goals, that can be included in there in the incentives.

Probably the most concrete telling example of measuring effectiveness of the account reps was one company we were working with as part of a larger piece of work.  They collected some payer feedback on their managed care sales force and their competitor’s managed care sales forces to do a comparison of how they were performing, taking into account the corporate dynamics of what had happened in the last couple of years with those payers. The payers are people, and they have memories of how things have been, and they have to manage their own budgets and so forth. So you have to take into account what’s going on around the reps. You get feedback that will tell you that either you don’t have enough reps or the reps you have are very good and have great relationships. There’s a primary research type of qualitative feedback you can get on your reps to get a feel for where you’re going, but it is difficult to just give a strict “Here’s the sales amount you’re going to get” and measure people on that and feel very good about it.