Footnote
- KPMG Sales Leader Pulse Survey 2022
- Forrester, “Predictions 2022: Customer Experience” (2021)
New trends in life sciences sales strategies
Insights from recent KPMG life science sales leader research
Post-COVID, changing patient and provider expectations, new collaborations, market consolidation, shifts in patient care, and rapid digitalization is changing provider and patient behaviors for good. How life sciences organizations sell, market, and serve them must adapt to evolving provider and patient expectations.
According to recent KPMG LLP research, there are several key trends currently impacting sales strategy:
- Customer experience is increasingly important – 56% of respondents felt customer-centric care and changes in patient expectations are of key importance1
- Mergers and acquisitions are changing the game – 58% believed M&A activity is having a considerable impact1
- Digital acceleration pervades across patient care – 62% saw the prevalence and usage of big data as significant1
- Increasing provider complexity is adding pressure – 51% cited increased pressure on margins as a substantial factor1
Faced with these factors, life sciences organizations must re-evaluate their front office – specifically, by reviewing their entire sales operating model – to survive and thrive in the evolving, post-COVID healthcare ecosystem. This root and branch review should include all elements of sales strategy, model, process, talent, performance, culture, operations, and tech stack.
To understand the impact and aftereffects of COVID on life sciences sales organizations and front office functions more broadly, KPMG conducted a pulse survey in 2022 of 100 industry commercial and sales leaders responsible for driving revenue growth. Respondents were split evenly between biotech and pharma, health IT, and medical devices—with the research gauging their experiences in three key areas:
- Which investments in their sales organization had the greatest impact
- Which healthcare trends impacted their sales organizations most
- What key levers can be used to drive above-normal sales ROI and revenue growth in the future
In this second in a series of blogs exploring the survey findings, we concentrate on the second point above, specifically:
- What healthcare and life sciences industry trends are having the most impact on sales execution
- How sales organizations are shifting their focus to account for customer experience (CX)
- What successful sales leaders are doing to invest in sales strategy, models, and processes in response to these trends
Trends impacting sales execution
Healthcare and life sciences organizations have been affected by the four key trends identified at the start of this blog. Sales and commercial leaders identified how these trends had impacted their models and discussed how they adapted to meet these challenges.
The increased prevalence and usage of big data (62%), along with digitally-enabled healthcare offerings (45%), provided an opportunity for leaders to accelerate their digital transformation.1 However, other trends presented a number of significant challenges:
- A changing and evolving healthcare landscape, driven by increased competition (61%) and increased deal volumes (58%)1
- Increased customer/patient expectations (56%) resulted in the need for a renewed focus on customer experience1
- Shrinking margins, along with other post-COVID factors (including changes in pricing transparency, an increased regulatory burden, and the return of elective procedures), have led to increasing provider complexity
To adapt to these, leaders focused on changes that enabled them to stand out amongst the competition - product/service quality (76% of leaders), perception of their brand (75%), and product/service innovation (72%).1
For leaders, creating a seamless front office experience was also key – specifically managing overlap and aligning direct and indirect channels (72%) and connecting the front and middle office (72%) to ensure smooth, consistent operations.1
While all of the above is deemed crucial to organizational success, there is a gap between the importance of the latter two and respondents' performance in these areas. These shortfalls need to be addressed for the successful execution of strategic goals.
Which of the following trends are impacting you the most?
Customer experience (CX) as a key focus area
The top priority for organizational success is customer-centricity, with both sales leaders (96%) and laggards (94%) ranking it as a key focus because >84% of participants state that customer expectations are increasing.2
This renewed focus on customer centricity should come as no surprise – customer expectations have dramatically increased as they demand the same experiences they enjoy in their daily lives – buying products and services how they want, when they want, from who they want.
Building a sales organization focused on customer-centricity has multifaceted impacts, with improved customer experience (85%) and improved patient outcomes (76%) seen as the most significant benefits.2
Why is customer-centricity a priority?
While nearly all organizations focused on these important outcomes, leaders also focused on patient adherence to care (41%), showing the interaction of CX and patient outcomes is driven by increasingly customized care plans.2 Lagging organizations, meanwhile, tended to focus more on surface reasons like 'improving reputation' or 'increasing revenue' – this differentiated focus showed up in revenue growth results.
The latest insights from KPMG life sciences research (% Who Agree)
Companies ignore these changing customer demands at their own peril – they will simply gravitate to more flexible and forward-thinking competitors. Indeed, 81% of sales and commercial leaders (within the LS market) recognize the trend of customers wanting to see solutions, not products.2 They are looking for those who they see as a trusted advisor.
Unsurprisingly, perhaps, leaders – who have refocused their sales strategies to meet raised customer expectations– are enjoying far less stressful customer interactions than laggards.
Those providers who recognize the changes in their customers' requirements over time and who are able to adapt to meet and exceed those expectations are those who will be set for future success.
Unsurprisingly, perhaps, leaders – who have refocused their sales strategies to meet raised customer expectations– are enjoying far less stressful customer interactions than laggards.
Those providers who recognize the changes in their customers' requirements over time and who are able to adapt to meet and exceed those expectations are those who will be set for future success.
Customers interactions are getting more stressful (% Who Agree)
Adapting the sales model for success
Leading organizations have been quick to focus their efforts on customer-centric sales strategy, model, and process evolution. They are applying clear customer segmentation and ensuring that their value propositions are fully aligned with these defined customer requirements.
Strategy equals discipline
Leaders continuously hone their customer segmentation and manage costs – no frills, just listening well to customer needs and giving them what they want (nothing more, nothing less). Leaders are passionate about understanding a customer’s journey and what matters to them (value props).
Adapt and optimize your sales model
Leaders get organizational design, headcount, capacity planning, and account assignment right—and have a laser focus on those areas of their operating model that require improvement (partner and distribution programs, sales job design).
It’s a process
Leaders are laser-focused on nailing two processes – leads and sales processes. Focus on these two elements accelerates revenue velocity, improves win rates, and increases deal sizes – and makes it easier to scale and manage the business.
Powering the sales model leads to success
The effect of aligning the sales model to enable a renewed focus on the customer is clear from the data – sellers in leading organizations are significantly more productive. Revenue generated by sales leaders (2.4 $M) is more than twice that generated by laggards (1.05 $M) across all life sciences industries.
Furthermore, leading organizations are able to do more with less - the cost of sales for leaders (13%) is nearly half that of laggards (25%) - leaders can capture significantly more revenue on sales dollars spent.1
Furthermore, leading organizations are able to do more with less - the cost of sales for leaders (13%) is nearly half that of laggards (25%) - leaders can capture significantly more revenue on sales dollars spent.1
Implications
Faced with increased competition and raised customer expectations, life sciences organizations must adapt to survive and thrive in the post-pandemic era. Utilizing big data to gain deep insight into their customers' wants and needs and the ability to align value propositions to specific customer segments while ensuring a focus on product/service innovation and quality will help inform the strategies needed to raise their brand value in this rapidly evolving marketplace.
Building a sales organization focused on customer-centricity is the ultimate win-win scenario. While those providing services will be seen as solution providers and benefit from an improved reputation, patients will benefit through an improved customer experience and, most importantly, improved patient outcomes.
Recommendations
1
Benchmark your sales organization – the market has changed significantly – how have you fared? Have the goalposts changed? Have you kept up with the use of technology, AI, data, and supporting enablement? Are you ahead or behind in meeting patient or provider expectations?
2
Consider your customer experience strategy: sales organizations play an integral role in customer experience. Are there silos across the front office? Are you selling products or solutions? Have you relooked at segments and value props in a post-COVID world? Are you still as relevant as you once were? Are you assessing how easy it is to do business with your organization across the sales and service teams?
3
Refresh your sales strategy: customer expectations and their buying processes have changed. Do you still know who drives your revenue, both now and in the future? Have you remapped segments to ensure you’re grouping customers to the best effect? Are your messages, products, bundles, and prices optimized? Are your jobs and talent still relevant to address key segments? Do you know who you can shift to e-commerce or hybrid sales and still grow revenue?
4
Upgrade your model and processes: leaders who optimize sales resources (e.g., headcount, compensation, etc.) to meet the needs of their segments—and then deploy scalable processes—drive higher productivity and lower costs. This means that barring any missteps, they ultimately win against the competition. Have you checked the assumptions on your capacity and headcount planning to account for a new normal and technology changes? Is your organization in the right shape and weight? Are lead generation and management processes dialed in and supported with CRM and predictive AI? Are your sales processes aligned to specific and validated sales plays that are well-supported by high-quality content and automation?
KPMG can help you improve the ROI on your sales investments – enabling you to effectively manage winning sales strategies, processes, and talent with connected insights.
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Read moreMeet our team
Walt Becker
Principal, Customer Advisory Sales Transformation & Commercial Industries Lead, KPMG US
Alex Tolmasoff
Director, Customer Advisory, Sales Transformation, KPMG US
Walt Becker
Principal, Customer Advisory Sales Transformation & Commercial Industries Lead, KPMG US
Alex Tolmasoff
Director, Customer Advisory, Sales Transformation, KPMG US