2024 Benchmarking Study: Oncology Sales Organizations
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October 24, 2024
Consultants and our clients alike find value in benchmarking efforts because they help us test the accuracy of our industry assumptions. We recently performed a benchmarking study of oncology sales forces while working with a client and surfaced some surprising findings around sales managers’ spans of control, how companies deploy their salespeople, and how organizations set individual sales goals.
One area we explored was the span of control for sales managers; that is, how many sales reps there are per sales manager at different companies. In looking at the respondents to our benchmarking study, we found that the most common ratio of salespeople to sales manager was in the 10-14:1 range. This ratio seemed too high to us, as it means each sales representative receives at most a couple hours of supervision and coaching each week, which forces the sales manager to concentrate more on putting out fires than executing the strategic plan.
We were also surprised by the fact that many fairly sizable ($500 million or more in annual revenues) businesses were among this population, as they could seemingly afford to provide more attention to reps. Conversely, we were encouraged to see that the vast majority of smaller companies (below $500 million) in our study population had a ratio of 9:1 or below, demonstrating that they were willing to invest in salesperson development.
We also unearthed some interesting findings around the sales deployment criteria. Traditionally, sales territories for all types of medical salespeople have been geography-based. While this structure is still generally in place for the legacy pharmaceutical companies in our oncology sales benchmarking study, biotechnology and medical device companies act more like technology companies and tend to deploy their salespeople by account, with an emphasis on criteria like revenue size. In an era in which doctors have no time to see sales reps and healthcare continues to centralize as independent practices get rolled up into health systems, the executives are making more decisions than those in lab coats when it comes to overarching therapy preferences.
Finally, we were very intrigued to see what sort of goal-setting techniques sales organizations are utilizing. We observed a widespread set of responses, ranging from those organizations that simply assign uniform sales goals to all reps to those that set goals by individual account. We observed that companies with an overall growth goal of 5 percent or more tend to use more sophisticated goal-setting methods, which helps them to maximize lift by identifying fast-growing territories/accounts.
Whatever business you’re in, RevenueShift can help to improve your sales force management by addressing your sales effectiveness strategies. By looking at the broad business challenges you face rather than just isolated obstacles, we can drive down to fix the root cause. At RevenueShift, we partner with our clients to create pragmatic, analytics-led solutions that meet challenges at their foundation.
