Report Extract

Key customer
engagement Report
Towards successful Key Account Management in Pharma
 Industry overview
Industry Overview
We start this report by quoting Mick Jagger from the Rolling Stones saying that the past was great, but he
would not want to be its prisoner. Pharma has been talking about changing its customer engagement model
for years, yet only now are companies being able to slowly cast away the shackles of their so successful past.
These companies are showing a clear ambition to not be prisoners anymore.

In this second report in our series1 on how pharmas commercial model is changing, we focus on the key
customers: the big and most important accounts.

Three realizations summarize fairly well the collective learnings of the most successful companies in engaging
key customers and accounts.

The first realization is that to become or remain a successful business you have to provide your customers with
value. Quite intuitive perhaps, but as the customer changes so does the perception of value.

The second realization is that to provide value you have to think differently, not only about what you provide,
but also how you provide it. Certainly tricky enough to give you a slight headache.

The third realization is that you will probably not be able to actually provide value to all your customers. Utterly
painful for any reach and frequency, share-of-voice moulded, pharma executive. To make it worse, as multiple
perceptions of value co-exist, the model for what, and most certainly how, value is delivered will have to be
flexible and adaptive to changing contexts and customers.

This series, and especially this report, have sparked quite a lot of interest and we have been invited to share
our findings and present at conferences (for example SAMA 2016, eyeforpharma Barcelona 2016), publish
opinion articles, and speak at companies.

I hope you enjoy it as well and, more importantly, find it useful.

Best Regards,

Magnus Franzen
Head Analyst
eyeforpharma

1
The first report in the series is on services as part of a future business model: Value Added Services 2015. The third report is scheduled to
be published mid-November and will look at the role of the sales rep in a multichannel environment: The Multichannel Rep 2015-16.

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 Key reasons
Authors
Martin Parkinson, Principal, PA Consulting
Magnus Franzen, Head Analyst, eyeforpharma (editor)

Leading companies who provided expert

insight include
Pharma: Abbvie, AstraZeneca, Boehringer-Ingelheim, Celgene, Grnenthal, LEO Pharma, MSD, Novartis, Novo
Nordisk, Pfizer, Roche, Sanofi
Consultants: Clarity Learning Systems, Gordian Business PTY Ltd, Market2Win, PA Consulting, Portsmouth
Business School, Veeva
Out-of-industry: Rolls Royce, SKF Bearings

Peer reviews
Jason Lovatt, Diabetes Sales Manager, Diabetes Optimisation Team, Sanofi
Simon Mackinder, Director Commercial Operations, EMEA & Asia, Gilead Sciences
Matthew Smith, Senior Manager Life Sciences Advisory Services, Ernest & Young
Alida Rossi, Customer Excellence Director, Abbvie

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Key reasons to buy this report
Build a solid case for customer engagement success with insights from the most advanced companies in
the industry
Understand how your future commercial model can answer to the increased complexity of healthcare by
being flexible, versatile, and adaptive
Manage internal stakeholders and leadership teams to drive cultural, strategic, and organizational change
needed for successful key account management
Learn best-practices for KAM implementation and operation: customer mapping and prioritization, value
creation, organizational structure, performance metrics, and training

Who needs this report

KAM Customer engagement
Commercial Customer excellence
Sales Integrated care, solutions and services
Marketing

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 CONTENTS
Contents

About the authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Welcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Peer reviewers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
About eyeforpharma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
List of figures and tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1 Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 Drivers for a new customer engagement model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1 External factors healthcare environment and customers and stakeholders . . . . . . . . . . . . . . 20
2.1.1 Funding, payers and market access barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.2 Centralized purchasing and decision making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.3 Customer consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.4 Growth in multidisciplinary working . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.5 Reduction in physician clinical freedom and power . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.6 Clinical pathway changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 Internal factors portfolio, culture and capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.1 Portfolio change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.2 Differentiation from competitors is becoming more difficult . . . . . . . . . . . . . . . . . . . 22
2.2.3 Sales complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.4 Need to reduce cost base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.3 Impacts from wider society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.4 External factors driving geographical differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3 A flexible approach to customer engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1 Multiple approaches needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 Tailoring roles and competencies to type of customer engagement . . . . . . . . . . . . . . . . . . . 27
3.3 Dealing with a cross-functional audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4 Identifying stakeholders individual understanding of perceived value . . . . . . . . . . . . . . . . . .27
3.5 Determining responsibility and accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.6 Challenges in adopting a flexible approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4 Account management in the pharmaceutical industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.1 A range of roles exist with the title KAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Defining key concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5 Engaging key customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1 Transitioning to KAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.2 Building for success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.2.1 Tacking associated tensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

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 CONTENTS
5.2.2 Following recognized best practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2.3 Basic KAM building blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2.4 Strong and committed leadership is paramount . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6 Towards best practice in KAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.1 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2 Develop a clear case for change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.2.1 Analyzing your customers environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.2.2 Identifying internal business needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.3 Leadership and organizational focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4 Change point and required cultures and behaviors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.4.1 Change point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.4.2 Cultures and behaviors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5 Customer mapping, prioritization and segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.6 Defining the right approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.7 The role of marketing: value propositions, offerings and channels . . . . . . . . . . . . . . . . . . . . 52
6.8 Structures and positional power for KAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.8.1 AM and KAM as a selling approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.8.2 AM and KAM as a business function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.8.3 Towards an integrated AM and KAM approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.8.4 Account management as a business unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.8.5 KAM and SAM as a business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.9 People and skills required for successful deployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.10 Get the right training, development and coaching in place . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.11 Planning processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.12 Roles and responsibilities and cross-functional working . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.13 Measures, metrics and performance management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.14 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7 Results of AM and KAM in the pharmaceutical industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.1 Impact on business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.2 Customer feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Origins of account management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Decision-making units and decision-making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

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 List of Figures & Tables
List of figures and tables
Figure 1: Factors shaping the pharma go-to-market approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 2: The US: Driven by rapid acceleration of external market changes . . . . . . . . . . . . . . . . . . . . . 23
Figure 3: Europe: Driven by market reform and internal pharma business challenges . . . . . . . . . . . . . . 24
Figure 4: Pharmerging markets: Driven by internal business requirements . . . . . . . . . . . . . . . . . . . . . 24
Figure 5: Composition of key customer engagement approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figure 6: The go-to-market options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 7: Level of responsibility of key customer-facing employees . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 8: Four phases of KAM implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Figure 9: Relative importance of key factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Figure 10: Perceived level of challenge of key factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Figure 11: 12 stages of the roadmap to success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Figure 12: Apply due consideration to influences on healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Figure 13: Country leaderships knowledge of which are the top 10 accounts . . . . . . . . . . . . . . . . . . . . 44
Figure 14: Extent country leadership is assigned to and active in KAM teams . . . . . . . . . . . . . . . . . . . . 44
Figure 15: Continuity of leadership review of key accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 16: Key accounts as a proportion of total accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure 17: Resourcing of key accounts relative to other accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure 18: A typical four-box approach to account prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure 19: Criteria for account prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Figure 20: Potential segmentation of prioritized accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Figure 21: Resources available to customer-facing employees in contact with key customers . . . . . . . . . . 57
Figure 22: Organizational structure for KAM at department level . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Figure 23: Organizational structure for KAM in terms of lines of reporting . . . . . . . . . . . . . . . . . . . . . . 60
Figure 24: AM & KAM as a selling approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Figure 25: AM & KAM as a business function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Figure 26: Towards an integrated AM & KAM approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Figure 27: AM as a business unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Figure 28: KAM & SAM as a business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Figure 29: Programs for developing next generation KAMs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Figure 30: Importance of internal stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Figure 31: Impact of KAM on the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Figure 32: Impact of KAM on the business [continued] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Table 1: Key customer facing role expectations and differentiators . . . . . . . . . . . . . . . . . . . . . . . . . 28

Table 2: Range of roles across pharma classified as KAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 3: Strategies and operational practices for KAM success . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table 4: Attractiveness factors used to select and prioritize accounts . . . . . . . . . . . . . . . . . . . . . . . . 49
Table 5: Key differences between customer management approaches . . . . . . . . . . . . . . . . . . . . . . . 53
Table 6: Roles and responsibilities of key functions within an account management approach . . . . . . . 69

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 customer
a flexible approach to
Report engagement
extract
3. The following extract is taken from chapter 3 of the report, which describes how the commercial
model has to be flexible to the complexity of todays healthcare

A flexible approach to customer engagement

Report extract
chapter summary
In the past, pharma has struggled to find a successful customer engagement model because

the discussion has often been too polarized between staying with the traditional sales
approach and a new, more qualitative and advanced key account management approach.
Complex market conditions and intra- and inter-geographical variations are suggesting a more flexible

approach where different go-to-market models may co-exist.

We envision a continuum going from traditional 1:1 selling to strategic account management where

several key aspects differ as you move along the scale:

Accountability for the business
Capture of existing sales opportunities
Development of new business opportunities
Focus on brands
Focus on solutions and services
Stakeholder mapping
Cross organizational stakeholder engagement likely to be required
Customer insight requirement
Business planning
Cross-functional pharma team involvement

As a prisoner of the past, pharma struggles to Figure 5: Composition of key customer

find an answer to the challenges described in the engagement approach
previous chapter, since not only has there been an
unreasonable burden of proof put on any agent of Combination
of two or all Key Account
change, but also the search has often been for a of the others Manager 36.8%
simple, one-size-fits-all answer. Just like SoV which 52.6%

was simple, one-size-fits-all answers lie in the past.

In our survey of pharma executives, it is clear that

many are employing a mixture of roles with over
50% engaging with key customers through key
Hybrid sales
account managers combined with traditional sales representative 5.3%
representatives (see Figure 5). Only 5% reported Traditional sales
representative 5.3%
having hybrid roles, and 37% reported using Source: eyeforpharma 2015

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Figure 6: The go-to-market options
High
Importance of the individual customer/
account to your business
Low
Low
Source: used with permission of PA Consulting
key account managers alone. This highlights the
polarized debate within the industry between the
traditional one-to-one sales approach and KAM, with
little consideration of what lies between these two
extremes.
3.1 multiple approaches needed
What is becoming increasingly clear is that the
complexity of the challenges makes a simple answer
impossible. Instead, different approaches are required
depending upon the portfolio of the company and
the subsequent range of stakeholders that must be
engaged (Figure 6). We are looking at a continuum
with traditional one-to-one selling at one end and
SAM at the other.
Moving across the continuum from one-to-one
selling to SAM, the approaches can be combined so
that even within an approach dominated by SAM,
traditional one-to-one selling to physicians can still
be accommodated when necessary.
Understanding and adopting a flexible approach
enables customer engagement to be tailored to
different healthcare environments between countries
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customer
a flexible approach to
Report engagement
extract
Report extract
Strategic account
managment
Key account
managment
Account managment
Therapy area-specific network
engagement and selling
Departmental selling
Group selling
Traditional 1:1 selling
High
Complexity of doing business with the customer
and geographies within countries. In addition, the
approach has the advantage of enabling the most
appropriate model to be used for different therapy
areas within the same company. The continuum
also forms a natural evolutionary approach, enabling
new skills and competencies to be developed and
deployed at a rate required by the market.
One of the opportunities, and challenges, in
adopting multiple approaches is that your key
customers are changing too and sometimes their
rate of change can be faster than you are able,
having multiple approaches can help spread learning
across your company and allow rapid acceleration if
such situations happen.
Integration of AM and KAM within existing SoV
approaches is key to success in many therapy areas
and markets. In few situations will a pure AM or KAM
approach be able to pull through decisions taken by
account-level stakeholders into prescribing change.
Therefore, it is likely that AM and KAM will both be
utilized to influence key decision making within the
account and then to coordinate and manage the
conversion of these into sales opportunities using
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sales representatives calling on physicians. In very
highly specialized therapy areas with few physicians
and stakeholders, an account or key account
manager may be able to manage the whole process
themselves but this should be considered as a rare
exception rather than the norm.
3.2 tailoring roles and competencies to type
of customer engagement
The focus of each role and key competencies change
across the spectrum of approaches, alongside
business focus, responsibility and accountability.
In the more traditional roles involving selling to
individual or groups of physicians, the focus is on
capturing existing sales opportunities, usually from
customers who have clearly identified clinical needs
which the medicine will fulfill. Whereas in account
management roles (while ensuring that these sales
opportunities are captured), the focus should be
on developing new opportunities for business
development and growth requiring more of an
entrepreneurial and business manager skill set. Even
though both roles demand customer curiosity and
the ability to uncover needs, the required depth,
range and nature of the insights is vastly different.
The ability to map and engage a wide range
of stakeholders from different disciplines and
organizations also varies across the spectrum.
Those involved in individual and group physician
selling probably need to worry little about wider
stakeholders, whilst those working within and across
departments (for example in hospitals) will need to
consider departmental managers and other potential
external influencers.
3.3 Dealing with a cross-functional audience
Operating across networks introduces the added
complication of working across organizational
boundaries, as different members are likely to be in
different organizations. They may be other specialist
physicians in different hospitals or highly specialized
therapy areas, or there may be a network of
physicians, specialist healthcare professionals (HCPs),
payers or planners who effectively form a group
www.eyeforpharma.com/key-customer-engagement-report 
customer
a flexIble approach to
Report engagement
extract
that, together, decides how patients are managed.
Understanding this cross-functional team will be
Report extract
essential to successful business. In this respect,
network engagement shares many elements of a
more recognizable account management approach
but does not require the same degree of capability.
In AM, KAM and SAM, the range and nature of
stakeholders become even more complex and
challenging. In the more traditional sales roles, it is
likely that the engaged stakeholders will still be at an
operational and middle management level within
a health system while in AM, KAM and SAM, senior
executive level stakeholders involved in high stakes
decisions should be engaged. These roles require
not just an in-depth understanding of the senior
executives organization and needs, but also the
confidence to engage with a peer-to-peer mindset.
3.4 Identifying stakeholders individual
understanding of perceived value
Across these different stakeholders, the concept
and nature of perceived value changes. Therefore,
pharma must also adapt the offerings and the range
of capabilities deployed in their delivery. When
engaging physicians, the main perceived value is
likely to be in enabling them to manage patients,
whereby messages around the safety, efficacy and
usage of medicines, as well as simple clinical tools
will be the mainstay of the offering.
Departmental managers and those working within
networks need to consider the impact of medicines
upon their finances, workload, patient flows,
quality of care, impact on other departments, and
any metrics they must achieve. As such, a wider
understanding of these additional factors and how
the medicine might impact them positively or
negatively is vital. The ability to position a medicine
as a solution to any of these issues will be critical.
The executives and senior executives engaged within
AM, KAM and SAM will be seeking to understand
the impact of a medicine, or more likely the broad
therapy area, on their organization as a whole, as
Report 2015
Key customer engagement report 10
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 customer
a flexible approach to
Report engagement
extract
well as seeking value through access to the wider Figure 7: Level of responsibility of key customer-
capabilities of a pharma company, such as driving facing employees

Report extract
organizational change and creating the right cultures 6.3%
and capabilities. These broader opportunities for
partnership are a key reason for carefully prioritizing
such organizations, as engaging at this level with
all is unachievable for any company. We will discuss
such prioritization later. 50.0%
43.8%
3.5 Determining responsibility and
accountability
Another important aspect in which the various
roles across the continuum differ is in expected
responsibility and accountability. In the traditional n The key customer facing employee is ultimately accountable/
responsible for the success of the business in the account
roles, responsibility for sales can be expected at the n The key-customer facing employee plans and coordinates
colleague level, while accountability usually sits with and delivers the business tactics. However, a more senior
leader is ultimately accountable/responsible for the business
sales managers or directors. On the contrary, account within the account.
management roles should also be expected to be n First and second line managers are accountable/responsible
for the business in accounts.
accountable for the business within their accounts.
Source: eyeforpharma 2015

Table 1: Key customer facing-facing role expectations and differentiations

strategic
group selling Departmental network account Key account
critical focus areas of role 1:1 selling account
selling engagement management management management

Accountability for the business n n n nnn nnnnn nnnnnnn nnnnnnn

Capture of existing sales

opportunities
nnnnnnn nnnnnn nnnnn nnnn nnnn nnn nn

Development of new business

opportunities
n nnnn nnnnn nnnnnn nnnnnnn

Focus on brands nnnnnnn nnnnnnn nnnnnn nnnnnn nnnn nnn n

Focus on solutions and services n nn nnn nnnnn nnnnnnn

Stakeholder mapping n nn nnn nnnn nnnnn nnnnnnn

Cross-organizational stakeholder
engagement
nnn nnnn nnnnn nnnnnnn

Customer insight n n nn nnn nnnn nnnnn nnnnnnn

Business planning n n nn nnnnn nnnnnnn

Cross-functional pharma team

involvement
n nnn nnnnn nnnnnnn

Source: used with permission of PA Consulting

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Key customer engagement Report 28
| 11
 customer
a flexible approach to
Report engagement
extract
From our survey, pharma appears split on the issue of
accountability and responsibility of customer-facing

Report extract
colleagues in respect of business with key customers
(Figure 7): 50% of respondents reported that a
customer-facing colleague has ultimate responsibility
and accountability, while 50% stated that this still
lies with first or second line managers; the customer-
facing colleague being responsible for planning,
coordinating and delivery of tactics.

3.6 challenges in adopting a flexible

approach
There are many challenges in adopting a flexible
approach, and in the following sections we explore
these and offer solutions to overcome them. The
challenges can be summarized as:

Organizational complexity
Clear roles and responsibilities
Cross functional working
Duplicate titles with different role profiles
Optimizing and aligning the marketing mix
Recruitment challenges
Training, development and coaching complexity

Despite these challenges, there are many

opportunities that such an approach creates:

Clear potential career progression for talent

Customer and key customer engagement is
optimal
Organizational learning can be spread to
accelerate key customer engagement is the
environment suddenly changes
Resources can be deployed optimally

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Key customer engagement report 12
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The following extract is taken from chapter 6 of the report, which describes how the commercial
model has to be flexible to the complexity of todays healthcare
major competitive advantage. As the market between
companies for account management talent becomes
more viable and competitive, talented individuals are
likely to stay, leave or join companies based on their
culture and ways of working, so getting this right now
will position companies well for the future.
6.5 customer mapping, prioritization and
segmentation
The selection of customers that a company
will serve has a crucial effect on its success. The
selection of accounts and key accounts is equally
important. Despite this, it is surprising how many
companies approach this step in a rather casual
manner, certainly initially. Yet it is one of the most
critical elements to get as close to right as possible
when you first embark on evolving your customer
engagement approach. Remember that you can,
and will, refine and improve your approach as your
knowledge of and experience with accounts grow.
With any approach requiring differential resourcing
(for example key account management), you need
to be able to demonstrate that these customers
perform better than the ones not receiving the same
level of investment, if not, why would the company
continue with it? Any accounts that do not respond
positively to such investment will dilute your results
and put the whole program at risk.
The task of mapping and prioritizing your customers
and accounts needs to be carried out methodically
and thoroughly and will probably take more time
MytH Buster: Kam should be
applied to the majority of or all
accounts
Unfortunately, it is all too common to use AM
and KAM terms and models interchangeably. In
many instances, it may be better to build account
management capabilities more widely across a sales
team to manage the majority of accounts better;
retaining KAM for only those accounts that really are
of longer-term strategic importance to the business
realistically this will only be a small proportion of the
total number of accounts or possibly none at all.
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practice in Kam
Hints and tips
Report extract
Agree which elements of your approach
you need consistency in. This especially
important if you have above-country teams supporting
affiliates with for example marketing or training.
Define these elements and ensure there is
minimum divergence from them.
Agree how your company will approach customer
engagement evolution: national roll-out vs. local
flex.
Understand and define the triggers and change
point for evolution and define critical market tests.
Define culture and behaviors and ensure these
align with those of your customers and company.
Invest energy over a sustained period to change
the culture within the company, and send strong
signals to the organization by altering personnel
reward and recognition criteria.
View your culture as a competitive advantage. That
way you will invest in it and nurture it appropriately.
and effort than you first expect. It is also important to
try not to enter the process with the answer already
in mind and to use the process to justify it.
In many industries that have adopted AM, KAM and
SAM, business is concentrated in a small number of
accounts 80% of business is concentrated in 20%
of accounts - the so-called 80/20 rule. In pharma
and life sciences generally, such concentration often
does not exist (except perhaps for highly-specialized
therapies), which makes the traditional approaches
often found in text books unsuitable for adoption
without some tailoring.
In our survey, it is interesting that despite this, over
60% responded that those accounts designated as
key ones represent less than 25% of the total number
of accounts, suggesting that choices are being made
among these companies.
In these key accounts, differential resourcing is
happening, especially in respect of people, projects
and propositions. However, in fewer than half of cases,
tailored brand messages were being utilized. This
suggests that whilst differential resourcing is a reality,
there is still some room for further optimization.
Key customer engagement report
Report 2015 | 47
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 towards
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practice in Kam
Figure 16: Key accounts as a proportion of total Figure 17: Resourcing of key accounts relative to other accounts
accounts

Report extract
100%
51-75% of total accounts
90%

6.3% 80%

70%

60%

50%
31.3%
40%
62.5%
26-50% 30%
of total
accounts 20%

<25% of total 10%

accounts
0%
People

Roles

Time

Call
frequency

Projects

Research

Porositions

Tailored brand
messages
Source: eyeforpharma 2015

In fact, in many countries, the number of potential Source: eyeforpharma 2015

accounts will be in the hundreds meaning that even
to practice account management, some form of
selection and prioritization will be necessary. Clearly,
not all accounts will be equally important. At this
stage, a selection process of the large accounts
based on both present and potential value is
probably a sensible option, and many companies
use a simple four- or nine-box approach depending
on how they have traditionally segmented their
customers previously (Figure 18).
Interestingly, there seems to be no consensus on the
role of account managers in this selection process
and our interviewees had diverging opinions.
selection has to be made on quantitative grounds as
there is insufficient reliable qualitative insight upon
which to adjust the selection process.
As accounts are engaged and this knowledge and
insight is built up, it becomes both possible and
desirable to review your initial selection adding these
factors into the selection process. Companies using
this approach did express some reservations though,
as there is still a concern about potential bias towards
those accounts that can be engaged easily versus
Figure 18: A typical four-box approach to account prioritization

High
For some interviewees, accounts should be selected
based on empirical quantitative sales and market
potential data alone, and the input of account Growth accounts Star accounts
managers is therefore unnecessary and undesirable
Present sales

as it may bias the process.

For others, the involvement of account managers

was seen as crucial, as only they could provide the
qualitative information and judgment necessary for Disinvest accounts Maintenance accounts
accurate prioritization decisions.

Low
This difference may reflect the underlying culture Low High
and maturity of the approach within each company. Present sales
Often when first embarking on AM and KAM, the Source: used with permission of PA Consulting

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those that are difficult but more important. Several
companies are managing this risk by using some
form of peer review, involving a regional manager
who has a view across a large number of accounts.
Star accounts: These accounts are already
financially important to your business and there is
significant potential to grow your business further.
Resources should be invested differently in these
accounts as they are already using your medicines
and probably offer the potential for rapid returns.
Growth accounts: These accounts offer significant
growth potential if you can work out how to unlock
it. You need an account manager with a particularly
entrepreneurial sense and to invest in developing
a deep understanding of the account and what is
preventing you from exploiting this potential. These
are your star accounts of the future, so nurture
them well and invest for the years ahead.
Maintenance accounts: These are probably your
star accounts of the past. You may well have some
of your best and strongest customer relationships
in this category, and although you do not want to
invest in them, you still have a large part of your
business there so you need to maintain these
relationships and ensure they are not lost through
complacency.
Table 4: Typical attractiveness factors used to select and prioritize accounts
present business performance factors
Sales (individual brands or portfolio)
Market share
History of engagement
Access to key stakeholders
Formulary/guideline positioning
Strength of key relationships
Organizational stability
Complexity to manage
Physician clinical freedom
Source: Adapted from Marcos-Cueva et al., 2014
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practice in Kam
Disinvest accounts: These may be accounts that
you have failed to make progress with despite
Report extract
great efforts, or they may be accounts that you
have had little or no contact with in the past.
Consider either some investment to explore
potential if you have not engaged previously,
or consider engaging through other routes (for
example virtual or e-routes), or disinvest and stop
banging your account managers heads against
their closed doors.
The selection of key accounts is often a contentious and
controversial subject as it involves the non-selection
or de-prioritization of some accounts which may be
important customers of some individuals.
People may apply pressure to have such customers
included or adjust the data to ensure that they are
included. Therefore, it is best to develop prioritization
criteria using a cross-functional team, and ensure
that the criteria, the scoring and any weighting to be
applied are agreed and locked in before starting to run
the data. Even taking these precautions you will need
to be rigorous and firm in undertaking this work.
We are getting to the point now where we are
deciding not to engage some accounts and clinical
potential business performance factors
Population managed/total number of patients
Market size
Willingness to engage and partner
Scope of influence on others
Market growth
Disease prevalence/Number of patients within the
therapy area/Number of potential prescriptions
Total pharmaceutical market
Number of KOLs or level of influence over others
Alignment of pharma offerings to customer
Key customer engagement report 2015 | 49
Key customer engagement Report 2015 | 15
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commissioning groups, but its a huge culture Figure 19: Criteria for account prioritization
change to do this in pharma. Pharma has worked in
n Not used as criterion n Used as minor criterion n Used as main criterion

Report extract
a certain way for many years and been successful, 16

and most leaders have come up through this system.

14
Sometimes internal pressure is such that its necessary
to work accounts that you know you shouldnt as 12
there are bigger battles to fight, revealsone director.
10

Our interviewees described a range of factors that

8
they use to select key accounts. However, not all these
factors are of equal importance and weightings are 6
usually applied set by the country leadership or a cross-
functional team. Massimiliano Nazionale describes the 4

five factors Celgene use to select key accounts:

2

1. Funding: Does the account have access to 0

Number of
patients within the
therapy area

Number of total
patients

Number of
prescriptions
presently

Number of
potential
prescriptions

Number of Key Opinion

Leaders or level of opinion
leader status of institution
Potential of
offering valuable
solutions to
customer

Geography

Other
funding or reimbursement for the medicine?
2. Adopting: What is the accounts level of adoption
in using the medicine?
3. Influencing: What influence does the account
have on others is it viewed as a center of
excellence or a model of good practice that others
Source: eyeforpharma 2015
are likely to follow?
4. Buying: Will the account buy the product; do they not only the attractiveness of the account to the
buy for other accounts? seller, but of the seller to the account. In this way,
5. Research potential: Is the account active in it is possible to identify those accounts most likely
research in relevant therapy areas? to move towards partnership-working, compared
with those where the relationship is likely to be and
A range of other factors used in the selection and
prioritization of accounts were identified in our Figure 20: Potential segmentation of prioritized accounts
interviews (Figure 19). The variety of factors may
Towards partnership

reflect the diverse needs of companies in selecting

Relationship you want with the account

and prioritizing accounts for their particular business Concentrate on Excellent fit
requirements, plus the challenge in some markets relationships and Partnership ready
of obtaining the data that are required to effectively delivering customers
undertake this task. Most companies are using a mix
of a maximum of three to four attractiveness factors
from the range shown in Table 4; weightings are then
Transactional

applied to these to represent their importance.

Enable low cost, self Caution!
service channels Handle with care
A complementary approach, common in other
industries but still relatively rare in pharma, is to
further segment prioritized accounts based upon Transactional Towards partnership
needs and/or likely engagement approach. Relationship the account wants with you
In other industries, such segmentation is based upon Source: used with permission of PA Consulting

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Report 2015 | 50
16

remain transactional. Again, accounts are plotted
on a four-box grid, but this time the results will
identify the type of relationship and offerings that
are most likely, rather than their financial value to
your company (Figure 20). Clearly, both techniques
provide valuable insight enabling you to tailor your
approach to individual accounts.
Other approaches to segmentation based on needs
can help shape the range of value propositions and
offerings made to accounts. Matt Portch paints
a picture of Pfizers approach to segmentation in
the US: Before we started selecting accounts we
conducted a huge exercise to archetype all of the
accounts across the US. A variety of factors were
used, enabling eleven institutional archetypes to
be identified based on their priorities and the value
propositions most likely to resonate with them. We
use this to identify what activities we need to drive
centrally, through marketing, as well as to help the
KAMs to get a solid starting point with an account
they can talk their language much faster.
The issue of how often account selection and
segmentation analyses should be undertaken was
discussed by many of our interviewees. In relatively
stable markets, such as many European countries,
once a year was the reasonable consensus. In markets
where the healthcare landscape is still in a state of
flux and change, some companies are running the
analyses every six months and seeing around 10-20%
change in account categories over this period.
The process for selecting key accounts and strategic
accounts should be similar to that described above
for prioritizing accounts, but as discussed in Section
6.4.1 the criteria used should be very different,
reflecting the difference in purpose of the selection.
It is important to remember that you do not have to
have any key or strategic accounts do not force it.
If you have prioritized all of your accounts as above
you will already have some that are more important
than others and maybe, given time, some of these
will grow into key or strategic accounts.
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Hints and tips
Report extract
Not all accounts are key accounts; not
all key accounts are strategic accounts.
Getting this wrong will jeopardize your approach.
Agree the criteria for account prioritization through
a cross-functional approach; if all functions are
to get behind the most important accounts they
should have a say in which these are.
Ensure that the leadership team is involved in
agreeing the criteria for prioritizing accounts and
that they sign off the final list this is an important
business decision.
Use quantitative data first to develop an initial
list of likely priority accounts, but refine this with
qualitative information based on experience and
knowledge gained by engaging these accounts.
Be prepared for some internal conflict and
controversy over your selection. Have an agreed
and robust process and rely on that providing the
correct result.
After prioritization, apply segmentation to provide
further insight into the approach required.
Key account and strategic account selection are
similar processes to account prioritization, but be
aware that the criteria should be quite different
and involve far greater qualitative criteria greater
caution is therefore required.
In the authors experience there have been instances
where affiliates have panicked because they do
not have any (or not enough) key accounts so they
changed the criteria to increase the numbers. Whilst
this is understandable in times of shrinking resources
across pharma, it should be resisted as it is likely
to lead to a dilution of the overall impact of the
approach and its value to the company.
6.6 Defining the right approach
As already stated, the only correct approach to
customer management is the one that is right for
you. The debate across pharma has become too
polarized between a traditional approach and
key account management, when in fact there are
various models and approaches between these two
extremes (recall Figure 1). As we move across this
spectrum, the complexity of doing business with
the customer increases, resulting in an increasingly-
complex customer engagement approach for
Key customer engagement report
Report 2015 | 51
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About eyeforpharma
eyeforpharma is a leading global media company specializing in business intelligence that helps pharma-
ceutical companies adopt business models centered around patients needs for affordable and accessible
healthcare.
As an eye for, and on, the industry, eyeforpharma exists:
to help pharmaceutical companies stay clearly focused on the core reasons they exist,
to give them the strategic tools they need to be successful in truly serving patients with ingenuity and real
value, and
to continue to innovate to meet changing healthcare realities.
eyeforpharma has organized conferences for and offered strategic advice to the pharma industry since 2002.
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