How Key Opinion Leaders Bolster Return on Investment in the New Pharma Climate
Health care professional (HCP) engagement has traditionally followed a "sales rep" model that isn't unlike how companies sell everything from wholesale paper products to produce. Under the traditional engagement model, sales reps approach decision makers to "pitch products." Nationally, pharmaceutical and life sciences companies are spending billions of dollars in payroll and benefits to be able to staff enough representatives to reach out to decision makers. Each sale can be a time-consuming process that involves heavy product evangelization. That's not necessarily a good fit when physicians are dealing with more pressure and time constraints than ever before while also trying to stay informed about the record number of drugs and therapies getting the FDA's green light. Education is valued over "the sales pitch." For pharmaceutical and life sciences firms looking for a solid return on investment (ROI), key opinion leaders (KOLs) are helping to answer the call.
How Much Are Companies Spending on Getting HCP Engagement Wrong?
To understand the emerging trends in HCP engagement, you must first understand the challenges pharma and life sciences firms are facing. These challenges are increasingly disrupting sales models based on representative-provider relationships. Here's a look:
- Hospitals and clinics are increasingly restricting access for non-medical outsiders.
- With the FDA approving a record number of new drugs and therapies, medical providers have more to research than ever before. They are looking for clear guidance from published works and clinical data to make sense of their options.
- Physicians are looking for "education" on new therapies that they can use to help their patients make the best decisions.
- Physicians are overworked and overscheduled. Few have time for the "wining and dining" aspect of sales that was common a decade ago.
- In a world of increased accountability, physicians and decision makers want to feel "informed" instead of feeling "influenced."
- In the digital era, things like talks, presentations, whitepapers and commentaries led by credentialed experts hold more weight than "ads."
First, the day when sales reps in the pharma world won't be needed is a long way away. However, it is vital to examine just how much is being spent on rep-based sales models. In addition to salary and benefits, things like bonuses and "perks" packages are common in the pharma world. In addition, transportation costs for client meetings can easily reach six figures for a single rep when you factor in a company car on top of air travel. Finally, rep-related costs also include things like dining out with clients, bringing clients to events or inviting clients to conventions. While these strategies may help cultivate relationships with clients, they don't necessarily increase confidence or awareness regarding the actual product. Just how much are companies spending on getting HCP engagement wrong? The answer could be billions per year across the industry. It's also not an exaggeration to say that small and mid-sized pharma and life sciences firms could be misspending millions individually each year.
What Is the Value of Good KOL (Key Opinion Leader) Engagement?
A KOL satisfies many of the emerging needs for HCP by emphasizing expertise over "selling." First, a KOL's annual compensation is often much lower than compensation for a rep, even though the KOL's credentials may significantly eclipse the credentials of a sales rep. This is due to the very strict regulations regarding compensation terms for KOLs contracted by life sciences firms. In addition, the contract nature of a KOL means that factors like benefits, training and paid vacation don't eat into return on investment (ROI).
Here's Where KOLs Boost HCP ROI
KOLs aren't a means to replace sales reps. They are meant to fortify and bolster the work being done "on the ground" by bringing credibility to a product. In addition, resources created in collaboration with a KOL allow a firm to "replicate" the work of the KOL during every meeting and digital engagement through shareable videos, podcasts, published papers and presentations that sales reps can pass on to their clients. Again, KOLs aren't necessarily replacing the role of one-on-one engagement that is needed to close the sale. However, they are closing the gaps created by the emerging challenges in pharmaceutical marketing that have developed due to changing policies and trends.
Key Opinion Leaders are an important part of the new pharma climate. Their opinions and expertise help lend credibility to life sciences and pharmaceutical marketing campaigns. They offer credibility over selling, which is critical in the advancing medical and life sciences field, as well as adoption of new therapeutics. This makes their services a valuable part of any pharmaceutical and life sciences’ marketing effort.