When is a patient not a patient? writes Mouhamad Zoghbi
When trying to maintain sustainable pharmacy profits, it’s clear that reacting to your competitors’ discounting tactics is very expensive. As the intensity of inter-pharmacy combat increases, deregulation plans are being finalised to unleash corporate pharmacies that will give rise to a different competitive dimension.
However, in order to combat brutal competition, pharmacy owners need to focus on the five forces that affect pharmacy profits.
- consumers (patients/customers);
- price wars;
- newcomers; and
In this article, we will focus on the first force, the consumer.
The consumer’s ability to fuel price wars is evident in the pharmacy industry. During my consultations with pharmacy owners I have observed that most of them are convinced that their customers are purely discount driven.
At first, I didn’t understand why pharmacy views customers in that way, but now I think they’re right: customers are discount driven. Here’s why.
What makes a customer price sensitive?
- If the product being bought involves a substantial amount of their savings, such as buying a home.
- If the buyer does not have enough income: this is why we see price sensitivity in low socio-economic areas.
- When the buyer perceives a low value of the pharmacy products and services.
The patient transformation phenomenon
Over time, I observed that while an individual is visiting their GP, they consider themselves a patient. On the other hand, though, “patients” suddenly transformed into “customers” after leaving a surgery and entering a pharmacy.
Why is this important?
Because once the patient feels that they are a customer, they lose their high-value health focus and fall into the low-value retail focus, and here lies the core of pharmacy’s problems.
If patients feel that pharmacy treats them as another customer, the patient’s mindset shifts from the value of health to the sensitivity of price.
The value of health and life
As health care professionals, we need to differentiate ourselves from retail outlets by making ourselves aware that people’s health and lives are intertwined. Without good health, there is a poor quality of life and if health is severely compromised, then death in many cases is the consequence.
To this effect, preventing the transformation of the patient mindset to the retail customer mentality is a stepping stone to desensitising the price sensitive customer.
The patient’s attributes become focused on better health outcomes which builds greater trust and loyalty, making patients willing to pay more or complain less for their treatment by recognising the value in what you have to provide for the betterment of their health.
But there is a catch. Preventing the transformation from patient to customer needs the pharmacy to transform from the ‘Retail Pharmacy’ mentality into the ‘Community Pharmacy’ mindset. By looking beyond profit you can make more profit. (For more on this topic download my free book The Prescription For Pharmacy at the end of this article.)
Patients want health outcome professionals not health care professionals.
Can competition be healthy?
Competition can be healthy if it is directed to improving the value of health outcomes.
Some of the greatest rivalries are seen in sport. They create an intensity that elevates rivals and transformed them to legends.
Rivalries such as Muhammad Ali and Joe Frasier, the State of Origin, and Nadal versus Federer spring to mind.
Rivalries that are focused on elevating your talent, product or service to unprecedented levels in order to defeat your opponent give rise to innovation, passion, perseverance and unsurpassed professionalism.
They also create value for the consumer because they enhance the integrity of the value they receive, by raising the bar beyond the average discount.
Areas where you can create valuable competition beyond price
- Creating new products/services.
- Complementary products and services.
- Purpose driven campaigns.
- Home/office delivery.
- Support services.
- Brand identity.
- Quality of service.
The transformation of the transaction into an interaction will stimulate the patient mindset and increase pharmacy profits.
Just imagine if pharmacy leaders transformed their mindset from Decepticons—wanting to “Keep the owners happy” to Autobots—“Let’s value health outcomes”.
When this happens, competition will itself transform from a means of annihilating your enemies to a means of generating a healthier community and a prosperous profession.
For more insight on enhancing your teams communication and selling skills, download a free copy of my book “The Prescription For Pharmacy”.
Mouhamad Zoghbi is the author and founder of ‘The Prescription For Pharmacy,’ specialised in the training and development of pharmacy teams and leaders. His goal is to create high performance pharmacy environments based on enhancing pharmacy communication and selling skills that improve health outcomes and increase profitability.