To say that there’s a lot going on in healthcare is an understatement. About the only thing certain in pharmacy today is that it will continue to change. Part of the change is the fluidity of the healthcare market. The other part is the consumer. Not only are they changing how they approach decisions in healthcare, but tomorrow’s pharmacy customers will be vastly different from today’s baby boomers.
Over the next decade, some expect healthcare could become more like consumer-oriented technology businesses like Amazon and Google™. We don’t really know where the Internet of Things is going to take us, but we do know it’s just beginning. Apps are available for a multitude of health monitors and health communication tools, and more are on the way.
Walgreens is working hard to be a part of the movement with its Activity Tracker app that tracks sleep, steps/distances, calories consumed and even awards points to customers for completing suggested health-related activities.
A New Model and Mindset
In my opinion, to compete in the future, community pharmacies need a new mindset and marketing model.
First, the mindset: embrace the fact you’re no longer just selling drugs. Pharmacies today must take their rightful place as full-fledged healthcare providers. There may have been a time when just dispensing medication was your purpose, but today’s pharmacists are far more than that. You have great responsibility in the health and well-being of your customers – monitoring, educating, counseling and intervening with physicians and payers.
These greater responsibilities require a new marketing model. Pharmacy grew using a retail business model. The retail model is based on selling merchandise and is a transaction-based business. This marketing strategy is pretty simple: provide the desired merchandise efficiently and at a low price.
While pharmacies obviously still sell merchandise, the retail model just doesn’t fit the expanded pharmacy role in healthcare because transactions do not properly position the pharmacy in the marketplace. However, the professional service model does. Professionals, like physicians and attorneys, are considered to have expertise that makes their services more valuable. They deal in information, expertise and ideas. So do you. Positioning your pharmacy as a professional service enhances its credibility, which is a critical element in healthcare marketing.
Advantages of Relationship-Based Professional Services
Very important to the professional service model is that it is relationship-based rather than transactional. Transactional marketing does not strive to build an on-going relationship; it just focuses on getting the next transaction. Relationship marketing is about building a relationship – customer loyalty – that will last over time.
The professional service model positions you better against the large chains and mass merchandisers whose models of volume with fast service and low prices conflict with relationship building. Oh, they are trying to offer some professional services, or at least appear to offer them, but in the end, their managers make decisions on one thing and one thing only – increasing shareholder value. If they have to choose between filling prescriptions (revenue generation) and counseling (which may not generate revenue) profit will always force the decision.
The professional service model is a marketing advantage that perfectly positions the community pharmacy in the marketplace. While academicians can detail multiple marketing models, they all really boil down to being cheap or being different.
A community pharmacy can’t compete on price, even though most are competitively priced. That’s because no one believes you’re the lowest priced competitor. Perception will always be that the Walmarts of the world are cheaper.
Differentiation is king in marketing because it’s based on value – your value in the mind of the consumer, otherwise known as your brand. The key is to solidify your pharmacy as the center of health and disease management in your community. Or, maybe you choose to be a center for a niche, such as diabetes or geriatrics.
Differentiation doesn’t require a host of big benefits. One or two clear benefits can establish a competitive advantage. Think Volvo (safety) and Walmart (everyday low prices). In fact, a simple differentiation is much easier to drive home.
The changes that have occurred in pharmacy the past several years put you in a great position to assume this positioning. The advent of vaccinations in pharmacy, medication adherence and clinical counseling all provide opportunities to differentiate your pharmacy.
Embracing the New Mindset
The first step to launching this new marketing effort is to ensure that you and your employees fully understand what you are really selling and, more importantly, what customers are buying. It’s not the drugs. People don’t pay you for the drug; they pay you for the benefit they get from the drug – relief, well-being, better quality of life. Your product is managing outcomes and the health of your customers.
Remember, people don’t want a quarter-inch drill; they want a quarter-inch hole. Once you understand that, developing approaches and messages becomes a lot easier.
The keystone of this new approach is your people. Employees make the difference between good service and great service. Great service from enthusiastic people is a differentiating factor that’s difficult to duplicate.
This new marketing approach may require changes to the kind of employees you recruit, with particular attention to personalities as well as clinical competence. Not all good pharmacists make excellent counselors or medication therapy management specialists.
The “how can we help you” approach takes dedication to training. Employees must understand the customer-focused mindset, why it’s important and how they are empowered to help customers.
Another change is that retail models often rely on promoting savings with coupons, wholesaler circulars, customer loyalty cards and sales. Professional services marketing focuses on what you’re doing for the customer: vaccinations, counseling, adherence reminders, prescription synchronization, screenings, 24-hour access, mobile apps, professional expertise, online services, etc.
It’s important to engage your customers in conversations. For one thing, the more time they spend with a pharmacist, the more likely their expectations will be exceeded. Also, the more you learn, the more you can help them.
Use point-of-purchase (POP) materials – tent cards, posters, brochures, etc. – to encourage patients to discuss questions with the pharmacist, including nonprescription questions. You can also use POP to educate and stimulate questions about health topics.
And, remember, a service can be worthwhile even if it doesn’t generate revenue initially. A screening may not bring in much revenue, but it can generate traffic and enhance your pharmacy’s marketing position of managing health.