Charlie Green, at Trusted Advisor, had a good post yesterday on the "trust factor" between doctors and pharmaceutical sales people. His post was prompted by Pfizer's decision to make deep sales force cuts. He attributes the necessity for these cuts to the fact that many/most doctors don't trust the pharmaceutical sales reps because they're all about the sale, and not about "doing the right thing." Over time, this has backfired into lower revenues.
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.
Of course, it's note just a matter of trust in the pharma world. I've spent most of my career in "enterprise technology" (software and/or services), generally working with premium priced products. And generally the premium price was a reflection of our over-engineered products (that went far beyond what the bulk of the market could afford or use) and/or an out of whack cost structure that required us to overprice our products.
The result was we had to overmarket and oversell. Come the end of the quarter, we'd be pressing prospects to sign, convincing them that someday, somehow, they'd need what our product offered when the best piece of advice we could have offered them was to buy from a lower-priced, generally lower-featured (but frankly not always!) competitor.
Since we were not malicious or evil people, we always spent the rest of our relationship with the oversold customer providing them with costly services (consulting and support) to get the product to work better, to make it easier, to hole their hand, to do their work for them.... Last quarter's triumphant sale turned into ongoing costs that contributed to our out of whack costs, that contributed to our having to charge higher prices than everyone else.....("There's a hole in the bucket, dear Liza, dear Liza.") We also ended up with some brutally unhappy customers, when we could have had happy non-customers who would keep us in mind in the future, provide word of mouth references, etc.
Needless to say, these companies have gone by the wayside. But the lesson is there: if you're not doing the right thing by your prospects - and sometimes that means walking away - you're not doing the right thing by your company, either. Even though the big sale may look really good at the time, if it's not right it will backfire on you.