Can An Independent Community Pharmacy Learn From A Pet Store?

Mud Bay Pet Supplies in Portland, Oregon is part of an employee owned chain with 39 locations in the Northwest.  And, what I experienced in the 3000 square foot store I visited blew me away. So, you ask, what does a pet store have to do with pharmacy? 

Consider this… the store does not have fancy fixtures, good parking or an upscale location - but it does have personality!

The concrete floors are clean and polished.  The warehouse type fixtures are stocked with merchandise that is artfully displayed.  And, the floor plan encourages customers to explore.  In short, Mud Bay is clean, bright, well-lite and attractively displayed.  Something any pharmacy would do well to emulate.

One interesting feature is the pet weigh station.  It invites pet owners to monitor their furry friends’ weight.  And, they just happen to stock a variety of pet foods geared to over or under weight animals. It is a great conversation starter and generates a lot of word of mouth recommendations.   

The store is about 4 blocks from my daughters’ home and when you take their dog for a walk and get near the store he pulls on his leash and “begs” to be taken to Mud Bay.  The reason, the staff carry treats.  After getting permission the clerk will give your pet a treat – or better yet, hand the treat to the owner who gets to perform the task.  All designed to enhance the experience.

From my conversation with the clerk it was apparent I was a first-time visitor. As I was leaving the store the clerk handed me a Thank You card.  In the envelope was a brochure that explained key benefits of Mud Bay, a gift certificate for $5.00 off any purchase and a hand written thank you note signed by the clerk.

Mud Bay competes with PetSmart, Walmart, every grocery store in town, and Chewy, the online pet super-store.  Yet, they succeed because they get to know you (and your pet), they carry products pet owners need at competitive prices.  And, they also stock interesting new products pet owners don’t yet know they need or want.  In short, going to Mud Bay with your pet is an adventure.  

So, here’s the takeaway for community pharmacies;

Look for ways to improve the look and feel of your pharmacy, inside and out.  Stock interesting new products that are consistent with the image of your pharmacy and display them in attractive ways.  Find new, more and better ways to interact with your patients; healthcare events, classes and sales representative sponsored “demo” days are things I have seen work. 

Make sure new customers are treated exceptionally well.  Incorporate new services that genuinely help patients, medication synchronization seems to work for many pharmacy owners. Anytime you fill a first-time prescription make sure your staff alerts you so you can come over and say hello.  Then, mail them a thank you note along with a brochure explaining the important feature of your pharmacy.  Perhaps you can even include a specially designed customer referral card they can use to refer someone they know to your pharmacy. 

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New Move-ins, An Overlooked Opportunity

First the bad news!  No matter how good your customer service is some of your most loyal patients will move away. And, the bad news gets even worse.  Statistic indicate the people who move into the vacant house or apartment your customers left are not likely to select you as their new pharmacy. 

Why you ask?  Being unfamiliar with the area they are most likely to start shopping at the major chain, supermarket or mass merchant pharmacy that is familiar to them and has a BIG outdoor sign.    

And to make matters even worse one direct mail list provider indicates that more than 30 million Americans will move this year.  And, the same company, Arvick Direct, Inc., says that most of these moves are people moving to another county or state.  These people truly are in need of finding a new drug store.  

Now for the Good News!  There are a number of companies who specialize in helping you mail something to these new people and inviting them to visit your pharmacy.  These services can typically be purchased at a modest cost – often for less than a couple bucks per household.

If you aren’t currently subscribed to one of these services you might want look into both the cost of each mailing along with the number of people who move each month in your trade area.  Most wholesalers and buying groups have a program (or two) they recommend and they should be able to provide you with the average number of movers by zip code. My personal favorite is a small specialty company in Texas called Welcome New Neighbor.   

From talking with pharmacy owners who are “plugged-in” to a new move-in program I frequently hear a few common complaints and some great tips. 

First the complaints: current customers sometimes come in with the mailing and say, “why did you mail me this?  I have lived here for years.”  Or, you get mailings returned to your pharmacy from the postal service marked, “no such address.” 

Mail list companies try hard to avoid it but mistakes happen when gathering and sorting millions of change of address, utility hook-ups or driver’s license names from both public records and privately held documents.   

Now for the tips: First, savvy pharmacists tell me that when confronted with an irate or simply curious customer that received a new move-in mailing suggest you smile, apologize and explain you subscribe to a service and have little control over the mailings.  Indicate that the service has been helpful in introducing you to people that have just moved into the community.  And, then if the customer is still a bit miffed offer them a certificate for free greeting card or some other appealing item appropriate to your pharmacy that will help appease their dismay. 

Make sure the customization part of the service you select allows for all mailings to show your address in the return address section of the mailing.  That way you get to see how many mailings are undeliverable. A quality service will reimburse you for all returned mailings.   

Pick your zip codes wisely. It could be you are on the very edge of your pharmacy’s zip code while most of the customers you want to attract live in an adjacent one. Also, look to see what kind of natural barriers might negatively affect the success of your mailing.  If things such as rivers, major highways or other barriers are in the way you will want to select a zip code that will work better for you.

                                                                              

Experienced pharmacy owners tell me the most important item to consider is your offer.  It must appeal to new move-ins and be of such value that they will go out of their way to find your pharmacy.  Rx transfer coupons in the range of $25 are common.  Free items that appeal to people in need of OTC or HBC’s are also effective; for example, “Come on in, say hello and select up to $20 worth of our Store Brand OTC and HBC items to fill-up your medicine cabinet.” I am told a free 1lbs. box of chocolates also works great.   

When the new move-in presents their gift certificate for redemption your staff should be trained to welcome them and then go the extra mile to insure the new customers gets a brief overview of what makes your pharmacy great.  It is always a good idea for them to get you so you can come out and say hello.

While they are in the pharmacy strive to enroll them in your loyalty program and/or invite them to sign up for your newsletter.  If the gift card they present does not already contain their name and mailing address you’ll want to try to get that.  And, as always, mail them something in a few days that will remind them of your pharmacy and encourage them to return whenever they need to purchase a prescription or other product or service you provide. 

New move-ins need what you have to offer, they just don’t know you are there.  Finding a way to reach out to them is a great way to boost sales and improve profits. 

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Something Has To Change

The more I talk with pharmacy owners the more I come to realize that PBM/third-party reimbursement rates have gotten so low and expenses so high that something has to change. 

Work done by pharmacy associations to attack the PBM problem are notable, well intended and likely to produce meaningful relief.  But, the sad fact is this process takes a lot of time.

Logic would dictate that if you cannot change the reimbursement rates fast enough to allow you to meet your profit and cash flow needs then the other logical alternative is to change what you do.   

To help you make a meaningful change may I suggest other, non-medication related services that can be rapidly adopted by community pharmacy and profitably implemented.  They are professional in nature and will fit the “psychic” profile of a typical pharmacy.  

My observations suggest community pharmacy is well positioned to take advantage of services that would help people find doctors who accept their insurance and specialize in the disease states a person is dealing with.  A small fee for such a service could be implemented if the marketing materials where produced in the proper manner.

Another is a service where you help people review all their medical bills and provide the expertise necessary to contact providers and payers, resolve mistakes and negotiate payment schedules.  This service could be done on a cash pay basis – think H & R Block.  These services would be provided in a formal office setting located in your pharmacy and be provided by a staff member other than the pharmacist. 

I am most intrigued by the growth in the number of franchise operators touting their ability to provide in- home-care to seniors.  By artfully drawing upon personal relationships with your aging patients, and marketing to their adult children, a community pharmacy could easily compete with a franchise operation by providing such a service.  And, a pharmacy could also assist in the handling of medications, a service the other entities avoid.   

I have seen pharmacies venture into hearing aids and optical services.  Perhaps some of the professionals in your market area who are struggling from the lack of visibility could be brought into your pharmacy to lease space.  They would add to your professional reputation and benefit from the foot traffic your pharmacy provides.  A true win-win scenario.    

Here is the bottom line.  Health care, not just pharmacy, is changing at a rapid pace.  That means new opportunities are emerging at the same time pharmacy reimbursement is being slashed.  A well run, well known and well-respected community pharmacy has the ability to start providing other health related services.  These services are needed.  And, many of them are paid for out-of-pocket by the patient or their family caregiver.    

Many of these services will be new to you and new can be scary.  Still, why not look around, talk with your staff and see if you can find a new service to bring in that will give you the profit boost you need.  After all, something has to change.  Why not you?

Comments, suggestions? Contact me at BFKneeland@gmail.com