ZS sales compensation expert Mike Martin recently wrote about the challenge of structuring sales compensation plans for oncology product launches in the face of imperfect data, previewing an article called “Reaching the Highest Peak: Four practices for designing a fair and motivating sales comp plan for oncology launch.” While it’s difficult to design an effective sales compensation plan amid data uncertainty, it can be done—and as Mike mentions here, there are some viable approaches.
One of the biggest challenges with sales compensation for oncology product launches is the data uncertainty. I’ve seen companies use market data, incidence data, field-provided data and even sales from other products in their portfolios when working to determine appropriate comp plans for new products. However, even those companies that use combinations of the various available sources know that it’s directional at best.
To account for this data uncertainty, companies most often develop flatter payout curves or measure team performance instead of individual performance, but not everyone likes those trade-offs—especially sales reps. However, one company that I know of recently did the exact opposite for its product launch. When the company asked its sales force about launch sales compensation, the sales force requested two things: individual accountability and high opportunity for rewards. The company knew that it was bucking the trend, so it made sure to highlight the risks to sales leadership so that those leaders would be able to communicate and manage any hiccups that might occur along the way—and, of course, there were hiccups.
That’s a bolder strategy than some companies might be comfortable with, so what should you do? My colleague Dave Kriesman points out a number of tips in his article, “Reaching the Highest Peak: Four practices for designing a fair and motivating sales comp plan for oncology launch.” For example, when companies are working with incomplete or fragmented data sources when predicting sales performance, Dave recommends finding the balance between fairness and motivating individual reps’ performance. In addition, Dave points out that companies should refine their plans over time, moving towards individual accountability and higher risk/reward payout schemes as the product moves out from launch. He offers a road map outlining key considerations for potential plan modifications post-launch.
Dave’s tips are a great starting point. In the end, your company’s cultural appetite for risk will determine how best to compensate your reps for an oncology product launch in the absence of robust data.
This post originally appeared on ZS’s pharmaceutical blog, The Active Ingredient.