"The Successful Man is the One Who Finds Out What Is the Matter with His Business Before His Competitors Do." Roy L. Smith
A cover story in the June 2017 issue of Drug Topics was all about the angry customer and what the pharmacy and the pharmacist, in particular, can do when facing such a situation.
The article was very creditably presented and in a decidedly reputable publication.
Kudos to them.
However, nowhere was any mention made of the lifetime value of the patient. Neither was any mention made of the value of a particular patient to the pharmacy in terms of business wanted vs business not wanted.
Important Marketing Questions
The two important questions that should be asked and answered is: “what is the potential lifetime value of this particular patient?” The answer can be found in calculations relating to the number of years the average patient remains with you. That number, in turn, gets converted into sales dollars, and profit dollars. Such is the lifetime value of your average patient.
The second question, and perhaps the most apt one is, “what is the profitability of these prescriptions, as well as other purchases of high margin items she may have made that have been filled for this particular patient?” That will give some indication of the lifetime value for this particular patient.
Both lead to a third question that may be, “Is she in the top 20% of most valuable patients or is she in the bottom 20%?”
About this point, somebody can determine whether this particular individual is at all desirable of being catered to and retained as a valuable component of the overall pharmacy’s patient matrix, or is she not.
Business that Is Wanted vs that Which Is Not
Which leads me to state demonstrably: Some patients are just not worth the time, effort, and aggravation they cost. They are not profitable and therefore do not have very much of a valuable lifetime value and are therefore not worth keeping.
In such a case, that customer should be invited to take her business elsewhere.
From My Experience
On the other hand, if she is indeed a more valuable patient, then the “patient care” team should do backflips in order to retain her business.
One Saturday morning, during my retail days (I owned a few China, Crystal, and Tableware stores), the manager of my flagship store she received a call from the wife of General O’Hara, the Commanding Officer of the New York National Guard. She was holding a party for 20 people that evening. Unfortunately, she only had service for 8 in a very fine Wedgewood bone China pattern which she identified for the manager.
Pam, the manager, recognized the pattern, made recommendations for supplementing so that Mrs. O’Hara could complete the service and entertain 20 people. However, she needed immediate delivery.
Fortunately, that morning, I was working in my office. Pam, spoke to me about getting the delivery to Mrs. O’Hara’s home in time for her to wash the dishes and serve her party. For Mrs. O’Hara? Of course. She was a frequent customer, spent a lot of money, and brought her friends with money to that store.
I personally delivered them, even though it interrupted the rest of my day. It was worth it, because Mrs. O’Hare praised us to all of her friends at the party. That’s business I wanted. It was huge for many months thereafter.
A More Profitable Model
Filling traditional scripts is getting to be a fruitless activity. More and more scripts and more and more patients are becoming less and less profitable. That’s the business you should no longer wish to handle. It is eating up your all-too-scarce resources.
At some point you, as a pharmacy owner, need to answer two very critical questions: ‘What business am I in?” And “what business do I want to be in?”
The answer to that question should provide you with the monumental turning point in your profits and profitability. With an open mind, it can lead you to more questions and conclusion that inevitably need to make in order to upgrade your cash flow, profits, and wealth gathering for yourself and your family.
For more information on how you can improve operations to make your pharmacy business grow, get my free report, "The Ten Commandments of Wealth for Pharmacy Owners."