Running a profitable community pharmacy is tough — you already know that. It is the purpose of this two-part article to show you that despite numerous problems it is still possible for community pharmacy to thrive.
In the first part of this series, we learned from remarkable pharmacy owners and managers about three of six things they do to be successful in today’s tough environment. The three ideas previously discussed were: Looks Matter and Neatness Counts; Run an Exceptional Pharmacy; and Do Something Else Exceptionally Well. You can read about those ideas in the July/August issue of ComputerTalk.
A more complete background on people interviewed in this two-part series appears in the first half. To ensure you know something of the background of the people mentioned in this half of the article, here is a brief description of each.
- Mike Burns, R.Ph., CEO and president of AuBurn Pharmacies (18 stores), headquarted in Garnett, Kan.
- Greg Hickman, R.Ph., owner of Carmichael’s Drug in Monroe, Ga.
- Colette Richman, R.Ph., manager of Tallman’s Pharmacy in Walla Walla, Wash.
- Mat Slakoper, R.Ph., owner of Mat’s Pharmacy, Croydon, Pa.
- Ty Stout, Pharm.D., vice president of operations, el Tejon Pharmacy (two stores) in Bakersfield, Calif.
Now, let’s see what else these successful managers have to say.
Don’t Dismiss the Front End
There are some in pharmacy who imply that the long-standing “merchant role” of independent pharmacy should be abandoned. While there are many notable examples of pharmacists building a solely “clinical” practice, I have great admiration for those who have found a way to combine an exceptional pharmacy with an attractive and customer-pleasing front end.
One such person is Colette Richman, R.Ph., manager of Tallman’s Pharmacy in Walla Walla, Wash. This 3,000-square-foot store has been in operation for 130 years and is an institution in that town. Tallman’s takes a serious approach to the front end.
Walla Walla is a good-sized town, and Tallman’s competes against big box, national, and supermarket chains, so they are constantly looking for a way to gain a competitive advantage. And, Richman says, the front end is one way they accomplish that. Richman says they constantly look for products they can stock and recommend that fit three criteria: one, they genuinely help people; two, they provide Richman with a decent margin; and three, they are not carried by the chain stores in her area.
Tallman’s features a clinical cosmetic line called Dermablend. The line has about 25 SKUs and Richman has an exclusive in her town. She says the line is effective in covering up bruises, birthmarks, and scars. Tallman’s doesn’t advertise the line, but they do get the local dermatologists to recommend it. She says the line is artfully displayed behind glass, and their front-end manager has been trained to provide samples and do a demonstration in about five minutes.
Tallman’s is one of the leading sellers of Columbia powder and Columbia skin cream, both of which fit Richman’s three-point criteria. While this line is nowhere near as profitable as the cosmetics line, Richman says that, “When customers want more, they have to come back here to get it.”
Colette Richman says Tallman’s attitude toward customer service, combined with its involvement in community organizations, has resulted in the pharmacy being voted Best-of-the-Best in Customer Service in Walla Walla.
Tallman’s front-end is a bit larger than most independents and is supported by a well-trained front-end manager. Richman says her candy department is a major draw. And they do a good job with cards, gifts, and traditional over-the-counter products (OTCs) — all of which they will deliver with or without a prescription included in the delivery. Delivery, she says, is a major competitive advantage, and to support it they have two delivery drivers.
Carmichael’s Drug is another pharmacy that is doing amazing things in the front-end. The store is large (18,000 square feet) and houses a complete durable medical equipment (DME) shop, carries a variety of diabetic supplies, offers the Take Charge weight loss program, and has a Hallmark card and gift shop that is supported by a Webenabled gift registry.
Several of these successful managers made positive mention on the value of their websites and social media listings. A news clip in the June 2015 issue of Money magazine reports that 45% of U.S.and U.K.-based small businesses don’t have a website. And, it says, 56% of consumers don’t trust a business without one. The 2013 NCPA Digest shows that only 76% of community pharmacies have a website, which makes one marvel at those that have not yet implemented one, as consumers clearly find them useful.
Greg Hickman, owner of Carmichael’s, says that one of the major reasons his store has remained successful over so many years is that they have learned to discontinue products that no longer sell and replace them with new ones they have reason to believe will appeal to their customer base. He says that products are constantly changing, and one of the management’s tasks is to keep up with those changes. Not only that, he says, but once you have brought them in they need to be displayed and priced right in order to generate sales.
To do that, he says, his QS/1 POS (point of sale) system has proven invaluable. But more important than having a good system is putting a person in charge of the system and training him or her on how to use it properly. In Hickman’s case his daughter, Leah Ferguson, takes care of all consumer-related technology, and that includes managing a robust assortment of social media tools.
Have A Management Philosophy
General Norman Schwarzkopf was noted for saying, “When put in command, take charge!” This comment illustrates that there is a difference between being the owner and being the person who actually runs the business. One thing that is clear about the successful managers I know is that they have a vision for what they want their pharmacy to be, and they are not bashful about asking their staff to help them get there. Mike Burns of AuBurn Pharmacies says one of the most important things he teaches his staff is, “We no longer sell anything to anyone. We simply educate. If we properly educate our patients, they will make the appropriate decision to purchase the needed products and services.”
AuBurn Pharmacies backs up that statement by providing a variety of traditional and enhanced clinical offerings, including diabetes education classes, insulin pump training, billing for supplies, diabetic shoes and fittings, a customer loyalty program, a generic discount plan, adherence and synchronization services, a free vitamin program for kids, and the immunization program mentioned in the first article in this series. Burns says that everything his company does is founded on the philosophy of “The mission before the margin.”
In addition to a “take charge” management attitude, all of the owners and managers with whom I spoke have a passion for what their practice does to help people. Richman of Tallman’s Drug says that they know that other stores in their area offer many of the same products they do, so to compete they focus on customer service. Now, customer service is the attribute almost every community pharmacy touts as its competitive advantage, but when many owners are pressed on what that means, they struggle to paint an adequate picture of what customer service looks like.
Not so for Richman. She says customer service means they have people in the store who can help customers find the products they are looking for and explain how to use them. She says, “We know if they or a loved one has been in the hospital.” And that they are ready with hugs or congratulations when someone has had a baby or if a child has won an award. These are the types of things she says customers not only appreciate but that get them to talk about her pharmacy to their neighbors or friends.
Get Out of the Pharmacy and Network
Perhaps Mat Slakoper, of Mat’s Pharmacy, says it most clearly: “You have to get out of the four walls of the pharmacy and talk to people.” Slakoper grew up in the blue-collar neighborhood where his store is situated and thus has a lifetime of friends in and knowledge of his trade area. And he says taking advantage of these relationships has been elemental to his pharmacy’s success.
Slakoper takes this notion very seriously and hired a fulltime marketing person several years ago. He admits that getting into the DME business drove that decision, but maintains that having a dedicated, trained, and motivated marketing person has helped him grow all three parts of his business: traditional dispensing, special packaging for residential care facilities, and DME.
El Tejon’s Ty Stout makes specific mention of how important it is for him and key staff members to get out and meet with prescribers in their offices. In making that comment he explains that he uses the word prescribers because physician assistants and nurse practioners are a big part of his success and he makes it a point to get to know them, too.
Stout says that his ability to get out and network led to being selected to serve a 5,000-person self-insured employer group. The program includes a combination of diabetic, weight management, cholesterol, and high blood pressure services. These kinds of opportunities, he says, are much more likely to materialize when one is outside the pharmacy and working closely with others.
Colette Richman says that Tallman’s is involved in Walla Walla’s “shop small” program and that this pays off by bringing in many new customers and by encouraging current customers to shop in her store more often. And, she adds, Tallman’s attitude toward customer service, combined with its involvement in community organizations, has resulted in the pharmacy being voted Best-of-the-Best in Customer Service in Walla Walla.
Well, there you have it: excellent advice from some of the nation’s best pharmacy owners and managers. This is provided with the hope that some portion of what they say will help you successfully navigate the challenges that face community pharmacy. After all, if one pharmacy can do it, so can you! CT
During the course of his 40-year career Bruce Kneeland has visited hundreds of successful pharmacies, and has written extensively about his findings in ComputerTalk. He retired in 2013 and is serving as a full-time volunteer missionary with his wife in Colorado.