Are you missing revenue opportunities with current patients?
How to increase revenue and profits from the patients you already serve
- Future revenue growth won’t come from reactively filling more prescriptions.
- Growth will come from identifying what patients need and giving it to them.
- Significant growth can come from current patients.
- Use data to understand who patients are and identify what they need. Also use data to better understand your business, specifically how and where your pharmacy makes money.
- Don’t sell to patients; educate them and help solve their problems. Ask open-ended questions to initiate conversations.
- By using data, understanding patients’ needs, and meeting them, pharmacy owners can achieve significant growth in revenue and profits from current patients.
While speaking at the 2015 McKesson ideaShare (the wholesaler’s annual trade show dedicated to the success of independent pharmacies), Dan Benamoz, the founder and CEO of Pharmacy Development Services (PDS), shared insights on how pharmacy owners can grow revenues and profits. Benamoz outlined what he calls The Millionaire’s Formula: find out what customers want and give it to them.
Most importantly, Benamoz stressed that independent pharmacy owners can no longer wait for prescriptions to come in the door. Owners must be creative and resourceful in creating opportunities.
Among his key insights:
Use data to run your business
Data eliminates gut feel, emotion and politics. Without data, independent pharmacies can’t compete, as chains are dedicating enormous resources to collecting and analyzing their patient data. The good news: independent pharmacies are sitting on enormous amounts of data, in places such as their pharmacy management systems. Now the challenge is organizing data, analyzing it and using it to make decisions.
- Use data to understand your business. Know your exact profits and margins on everything, so you can focus on profitable products and services instead of instances where margins are low or money is lost. Specific data Benamoz suggests knowing:
– Highest profit $ drugs
– Highest profit % drugs
– Highest profit doctors
– Highest profit insurance
– Top 20 drugs filled
- Use data to understand your patients. By analyzing data on patients, you can identify exactly which patients use which products, and which patients might need other products you sell. Mine your database of existing patients to create new opportunities.
Educate and recommend; don’t sell
Benamoz said that selling is convincing people to buy products they don’t need. That’s not the key to success. Instead, understand patients’ needs and educate them to make more informed decisions. Two techniques Benamoz suggests:
- Identify patients’ needs based on what they are already buying. Because you have data on what patients are already purchasing, you can educate them and make recommendations to help them. For example, if a patient is purchasing anti-inflammatory medications, a pharmacist can educate them and suggest hot and cold packs, or ice packs.
- Ask leading questions. Don’t ask yes/no questions such as, “Are you having diarrhea?” Ask open-ended questions that get patients talking, like “What side effects are you experiencing?” For every common drug and disease state, it is good to know exactly which open-ended questions to ask.
Once a patient identifies a need, a side effect or any problem, you can make a recommendation to help solve that problem. This isn’t selling — it is identifying needs, educating, recommending and solving problems.
“Develop your team into expert problem solvers and train them so they think of themselves that way. People don’t buy products or services; they buy solutions to problems.”
— Dan Benamoz
Identify and use “Profitability Pathways”
A strategy PDS recommends is called “Profitability Pathways.” Aspects of this strategy include:
- Defining specific diseases, such as diabetes, that affect a significant number of patients.
- Determining all of the additional prescriptions and potential products — including OTC products — that people with this disease will need. For example, a patient with diabetes might also have prescriptions for blood pressure and cholesterol; they likely have a need for glucose supplies, injection supplies, and numerous other products and services.
- In particular, focusing on cash-pay items with high margins.
Benamoz suggested analyzing specific trends for your market and your patient base and choosing to focus on two profitable products or services that meet a distinct need in your pharmacy’s geography and demographics. In choosing what to focus on, he suggested meeting with your pharmacy’s entire team to brainstorm and rank opportunities, and then have a highly visible launch.
Each of these strategies — using data to better understand your business and patients; educating and recommending; and defining Profitability Pathways — is a way to increase revenues and profits by solving problems for current patients. Significant growth can come from those you are already serving.
For more information:
- Visit pharmacyowners.com to learn more about Pharmacy Development Services (PDS).
- Visit McKessonideaShare.com to learn about the June 2016 event in Chicago.