Pharmacy cannibalises itself in search of retail edge

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Chemical warfare, or the focus on retail and profit, is killing the community pharmacy, writes Mouhamad Zoghbi

Today’s business culture has become cutthroat. There is no place for the faint or soft-hearted.

In the name of business we have given ourselves the right to shut down the mother- and father-run corner shop, and eradicate the family-operated fruit shops, leaving tens of thousands of people displaced away from their passion, refugees from the battles inflicted by the corporate Goliaths.

Amid this business turmoil, the community pharmacy has lost its identity and is now named the ‘retail pharmacy’.

Retail has given pharmacy a license to kill. As harsh as it may seem, the retail pharmacy has not immunised itself against the chemical warfare that has plagued the profession.

With each Community Pharmacy Agreement, pharmacy businesses take a bite out of the financial carcass on offer, leaving onlookers wondering: Why does customer-centred care need incentives from the government to suddenly ignite the passion to serve?

This is the same Government which takes away $2 and gives back $1, then for the sake of better competition turns around and encourages a $1 discount, as though pharmacy isn’t already waging a price war.

The community pharmacy is fighting to survive amid aggressive price disclosures, high expenses and pressures from wholesalers. Yet, the treatment of slashing costs and pushing discounts only focuses on the symptom of financial turmoil, rather than treating the root cause of the problem.

Retail pharmacies are cannibalising each other as they compete for every last cent. As a result, the industry has become a financial environment, where mark-ups and retail profits have replaced the language of health care and community.

The financial turmoil facing the profession is a symptom of a much more serious problem. It is a symptom of the widespread commodification of health.

The ultimate result is that pharmacists only ever make short-term gains, like an up-sell, rather than building a genuine relationship and helping the customer improve their health.

If all you are doing is taking a customer’s prescription and providing a pack of medicine with minimal advice on how to take it, be prepared for a price war.

I believe that the greatest differentiating factor between you and your competitors is your ability to relate to your customers with a human touch. When implemented consistently, this creates customer loyalty.

Loyalty is when people are willing to purchase from you regardless of price. They are not swayed by price differentials and discounts—they deal with you because they genuinely believe in who you are and what you care for.

Loyalty cannot be bought through discounts, as the moment that your price is not as cheap as your competitors, bargain-addicted customers will immediately go elsewhere, only to return when you drop your prices.

Today, loyalty is more important than ever, especially when it comes to what people care about the most, their health.

The pharmacies that have a customer following will weather the storms ahead, while the others will continue to cannibalise each other with their manipulative techniques until they reach breaking point—laying off staff, employing cheaper labour, dropping salaries and creating an atmosphere of fear and stress.

To create this loyalty, you need to create an emotional attachment through consistent quality service and care. This cannot be earned overnight.

It starts with a leader who is driven by a strong purpose and who values the dignity of each individual’s life and health. This leadership is key to creating a culture of trust and empathy, where each team member is respected and guided in serving their customers.

This combination of the dedicated, purpose-driven leader and the valued, aligned team then provide the foundation for customer service, not just customer sales. And this will be your differentiating factor.

Yes, shaking the habit of discounting takes a lot of dedication and support, especially in an environment where the customer has become so used to buying at a cheaper price.

However, when they are looking for value for their own health, they go to the pharmacy that gives them true health care and trusting support.
Mouhamad Zoghbi is the founder of The Prescription for Pharmacy and author of the book of the same name.

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