Thoughtleader: John Bailye, Dendrite

When John Bailye first encountered pharmaceutical sales, more than 20 years ago, the most familiar piece of technology for tracking and organizing the selling effort was the rep's ubiquitous shoebox full of index cards. Since then, at the helm of Dendrite, the company he launched in Sydney, Australia, in 1986 and moved to the States in 1987, Bailye has been in an ideal position to observe the evolution of sales force automation from a simple tracking and record-keeping technology to today's sophisticated versions, which use computers, PDAs, and even "smart" technology to constantly connect reps with data that helps them build relationships with physicians—and provides them with data and sales aids keyed to the individual doc's needs and interests. We talked with Bailye about the growth of sales force automation—and about the latest technology to find its way into the rep's arsenal: phone-based SFA.

John Bailye

Pharm Exec: You've been looking at this industry and sales force automation for nearly 20 years. What are some major changes you've observed?

I used to run a market research company that specialized in understanding doctors' prescribing patterns. I interviewed tens of thousands of doctors and analyzed all the things that made a doctor make a prescription choice.

When I went on the road with the sales reps, I noticed two things: They continued to sell from the eight-page glossy and run their pen along the bottom of the paragraphs so that the doctor could understand the words, and they called on the doctors they had appointments with rather than the doctors who were actually the most appropriate. The disconnect between marketing and sales became really, really clear.

We invented what became known as sales force automation. Initially the goal was to carry the information that reps held in those days on doctor cards. But when I had a close look at the disconnect between product positioning and sales execution, and it was really that juxtaposition that brought us to merge these two things: first of all, the automation of the sales recording process and the positioning, and the marketing execution of product positions. Today's systems are deeply driven by customer level data, and their aim is to help the sales reps better understand and better relate to the customers in what is basically a very scientific interface at its very best.

At its best, the detail call is an extraordinary time when high science meets the practical prescriber. And modern SFA systems are designed to make that interface as effective and productive as possible. But it has taken 20 years for that to become an accepted premise and an accepted industry practice.

Has the US pharma industry taken full advantage of the capabilities of automation?

These systems more likely to be stressed in countries like the UK or Australia where there's a high number of one-appointment-per-year doctors. Consequently, the rep has to use a meeting with the doctor effectively. But if the rep uses a SFA system to follow up with the doctor for the rest of the year, he can manage the flow of other information to that doctor between these wide-spaced appointments.

This is an example of what we would like to try more of in the United States—we're already being forced to cut back on doctor calls in some places. It shows how the same technology serves different needs in different countries, and this is one area where fewer interfaces with the doctor still requires nonpersonal bridging. Instead of just walking away, the rep can follow up with information that says: "This is something I know is of interest to you. I've done some research, and I hope you find it valuable." It's a different sort of a relationship than we've expected from our reps in the past ten years.

As the sales model evolves, are reps returning to something they did before or moving to something new?

No doctor in America or anywhere around the world is going to lose their right to practice tomorrow if they don't see a sales rep today. We have to understand that doctors can stop seeing sales reps just by saying, "no appointments," and the whole world in that practice stops. It's not the doctor that is the source of the problem—the vast majority of doctors still have time available. If you travel on the road with a sales rep, the doctor often will say, "What have you got for me today that's new?" It sounds like a trite welcome, but it actually embodies the core of why the doctor let the salesman in. They want to know what's hot in the market, not read a new brochure on a nine-year-old product that doctors have already been using.

And every time we can answer that thoughtfully, we can have a meaningful detail session with the doctor. And that's where I think many of the companies are coming back to that core value: understanding.

Think of the incredible changes the Internet has made in the rest of doctors' lives. They use e-mail and buy stuff on e-Bay. When they're buying a new car, they get a competitive price on the Internet. They know exactly how to use the computer the way everybody else does.

But they don't use it for product-related research as much, and part of this is just habitual and a lot of it is because sales reps do a good job when they've got new things to sell. And so I think that this core value of relationship between the sales rep and the doctor is behind a lot of the thought processes.

To build relationships, some companies reduce the number of sales reps and territory size, or just concentrate on group practices. Other companies treat a doctor as though it's an account—the sales rep's objective is to understand the needs of that account, and service it as an account—not as a push sales opportunity.

We'll see different facets of this, but it's not tied to the size of the sales force. My generation was a time when reps and territory managers had to maximize the value of the territory. In today's environment, we could use that philosophy with the thought of total coverage and exposure. That's going to be one of the premises that every company works within the next couple of years, and you'll see different ways in which companies address it. But improved intimacy with the doctor will become the catch-cry of the next generation of sales force.

Looking at the industry in general, it looks like while the capability of doing the detail scientifically rose, the desire to do so may have declined. One reason could be that sales reps in mirrored territories were just reading from a script. Is that your view?

When the first articles about mirrored sales forces were published in the early '90s, it was explosive. People moved away from the premise of intimate contact with the doctor and of being focused on content and value, and they moved into reach and frequency marketing.

But when that happens, you run the great risk of the trivialization of the science which is being delivered. And, of course, when a new product comes out, say the new vaccines from Merck, or any product based on new science, it is hard to imagine how to convey that to opinion leaders and then for the mass market without thoughtful communication from the sales rep.

People talk as if the transformation of the sales force can be done relatively quickly, just by right-sizing the sales force and having the right strategies. We're talking about a different sort of a catalyst affecting what we're doing. We've played a model to its full extreme, and as a result of that, we need to find different approaches. That's why you'll see different companies try different ideas. But at the core of these ideas will be the need to create the relationship with the customer, the doctor, and ultimately the end user, the patient. We'll see what happens when several companies try different ideas—the range of experiences should distill a whole new philosophy.

What about the evolution of wireless technology? What sort of advantages has it provided for reps?

Sales reps started with laptops in the field, then slates, then tablets to communicate information to doctors. Then PDAs came out. Although the original concern about PDAs was that you couldn't put as much data on them as you could on the computer, they had the advantage of being in the rep's pocket. That broke through the barrier about how to store a useful amount of data on a telephone.

Today, it's possible to add GPS to the equipment. That means reps can actually have a device that doesn't need to carry all of the data because the back end can track where they are and download only the data of the customers who are in their vicinity.

Now that prices for Smart phones are dropping, systems like this are ideal for small companies. They're cost-effective and the sales force automation system is on the back end. You never have to change it if your sales force grows from 30 to 300 reps. And since the sales reps enjoy the portability, it's a win-win situation for both the company and its reps. It represents a whole new world of thinking about what resources you give a rep. Instead of sending everything to them once a night, send what they need now. It gives tremendous flexibility with the platform you choose.

One of the advantages on this system is if a rep finds himself with free time, the GPS system can simply give him the clients who are nearby and enable more opportunistic calls.

It looks at when the doctor's available. It looks at when you called there last. And if you decide to make the call, it'll give you all the previous history of your calls and what samples you dropped there. Even though you weren't planning to make the call, it's all there for you.

Plus, there is no training on a phone; reps can pick it up and run it. I'm on the low threshold of technical competence in the company, so if I can work it, anyone can work it. This also cuts down the costs of re-training a new rep—it takes a whole layer of cost out of the system.

You spent a lot of time looking at what reps actually do in the field with the technology they have. What were some of the most interesting things they can do with wireless systems?

Reps, especially hospital reps, get frustrated when they're about to make a call on somebody and another doctor appears. In traditional SFA systems, they had to go and find the new doctor's record and bring it forward, which could take some time. But new SFA systems are tailored to real-world events that get in the way of a rep executing their plan. It makes a huge difference to the usability and, therefore, desirability of the system. For example, if a rep is working a group practice, he may have seen one doctor, but another doctor signs for the sample. Now he has the ability to quickly substitute that doctor's signature onto the call history of another doctor, which takes mere seconds.

You're going to find large pharmaceutical companies adopt the telephone as their SFA device in the next couple of years, but first companies will adopt it as the companion, and then that'll be the one that the reps use all the time. Eventually companies will wonder why they're using laptops at all and use these phones with SFA systems exclusively.

Does this technology fit well with where the sales force needs to go next, developing that more intimate relationship with doctors and restoring the intellectual content of the detail?

Five years ago, if we wanted to show a doctor an important piece of information that happened to be in video format, we had to lug a television screen and video player around. It was hardly a subtle or rapid experience.

With broadband and the ability to carry lots of data, reps can carry a little telephone and show the doctor a video while standing in the hallway. The process is concise and punchy and the doctor's still walking or standing with reps between visiting rooms. It might not be a 21-inch screen, but our job is to communicate key messages quickly. It will force us to do good communication in 90-second sound bytes. And reps will use it because it's easy and quick and doesn't interfere with the doctor's workflow.

It tells you what the doc's interested in. You can store information about who they consider to be influential peers, and with the right collateral, you can create a work session in the workplace.

The same way wireless technology will profoundly change the interface between reps and doctors, there's probably an outreach here that's going to go into patients. We'll be putting that idea to the test in the first quarter, trying to measure what happens when you bring the patient technologically into this loop of communication. We took technology into sales force operations, we're taking technology into marketing, and we'd like to take technology into the patient relationships that are the inevitable consequence of a successfully prescribed product.

John Bailye has been CEO of Dendrite International since he established the company in 1986, and moved it from his native Australia to New Jersey in 1987. He has been Dendrite’s chairman since 1991. A graduate of the University of New South Wales,where he took a degree in Finance,Marketing and Business,Bailye was formerly the managing director of Foresearch,a market-research firm based in Sydney,which focused on the pharmaceutical industry.