2. pharmacySOS.ca | Gerry Spitzner
Learning Objective: High level overview
of retail community Pharmacy business
Thoughtstarters
Customer Experience
Operational Areas of Retail Pharmacy
Retail Pharmacy Formats
Pharmaceutical Logistics & Supply Chain
Future Developments, Opportunities & Trends
3. Health Authority Associated Pharmacy
ambulatory care pharmacy, cancer drug pharmacy, HIV drug pharmacy,
hospital pharmacy, corrections facility pharmacy, mental health,
substance use and addiction, nuclear pharmacy (radiopharmacy),
Retail Community Pharmacy
“full mix” retail pharmacy, Health Centre, simply a dispensary,
consulting pharmacy, compounding pharmacy, veterinary pharmacy,
central fill pharmacy, mail order pharmacy, tele-pharmacy
Other Pharmacy
military pharmacy, R&D @ Pharma, sales @ Pharma, Government (Pcare)
pharmacySOS.ca | Gerry Spitzner
4. pharmacySOS.ca | Gerry Spitzner
What do you hope to do
when you graduate?
Source: RoderickSlavcev
6. Healthcare is a business and always will be...but Pharmacy
practice is an art; and always will be.
◦ The practice of Pharmacy and the business of healthcare
are converging like never before
◦ Community Pharmacy is a retail business
◦ Community Pharmacists are small business entrepreneurs
◦ Pharmacists are the only health care practitioner (HCP)
practicing in a retail business setting
pharmacySOS.ca | Gerry Spitzner
8. For your patient service project ,
you are going to approach today’s
busy customers, here are some
thought-provoking ideas about the
retail business to consider…
pharmacySOS.ca | Gerry Spitzner
9. What is the real purpose of a business?
◦ Profit isn't a purpose, it's a result. To have purpose means the
things we do are of real value to others.
Creating, engaging and keeping customers is the key to
repeat business and long term survival for any business.
◦ A retail Pharmacy that continuously relies on only current
customers for its economic success is not going to grow.
◦ How will you create, engage and keep your customer?
◦ What purpose does your patient service serve?
pharmacySOS.ca | Gerry Spitzner
10. Why should patients do business with your service?
◦ Customers don’t care how awesome you are
◦ Crazy competition
◦ Fickleness trumps loyalty
Questions you must answer about your patient service
from your patients perspective…
◦ Why should business come to you rather than someone else?
Why does it matter? Why should anyone care?
◦ How does it work?
◦ What problem does your professional service solve? What
makes it better than any other Pharmacy?
pharmacySOS.ca | Gerry Spitzner
11. What exactly is value in the 21st century?
◦ Value is not determined by the people who set the price, it
is determined by those who choose to pay the price.
◦ In order to engage your customer/patient, there must be
some form of interest or perceived value on their part.
◦ Prospective customers should be able to visualize exactly
what value you and your service could bring them.
◦ Develop a unique value proposition of the tangible results a
patient gets from using your patient service.
pharmacySOS.ca | Gerry Spitzner
13. The public perceives what it sees.
Perception is in the eyes and ears of the beholder; value
means different things to individual people.
Value is a function of the bundle of perceived benefits
offered at a given price. It's a unique perspective.
The vision of your patient service should be the basis of
your unique value proposition.
Think different; BEE DEPHERENT… is the most important
strategic business principle of all.
pharmacySOS.ca | Gerry Spitzner
14. Your patient service is not about selling something;
rather it is to fulfill an intention your patient has.
Never about what you can get; always about what you
can give. It's customer focused vs transactional.
Value is in the ‘applied’ benefits of the benefit you as
the provider and your service offer.
Applied benefits are the outcomes patients expect
beyond how to take the prescribedmedication.
pharmacySOS.ca | Gerry Spitzner
15. The moment of truth in healthcare
and retail Pharmacy…why the
customer experience matters.
pharmacySOS.ca | Gerry Spitzner
16. There are 3 types of customers in every retail channel
1. Shop local- they value and support small
businesses (service & community)
2. Bit of both- they value convenience (time crunch)
3. Big Box | Mall- they spend 3-4 hours on a Saturday
as a hobby-they value entertainment (price)
pharmacySOS.ca | Gerry Spitzner
17. Confidence is the #1 factor
◦ in determining what, from who and where customers repeat buy...
quality is #2,
service is #3
selection is #4
and price is #5
PRICE IS PRICE; VALUE IS THE TOTAL EXPERIENCE
pharmacySOS.ca | Gerry Spitzner
18. Serve people, don’t just provide customer service.
◦ Customer service is what every retail organization wants to
supply to the customer; it is governed by policies and rules
intended to serve the business.
◦ Serving customers, on the other hand, is driven by what the
customer wants (applied benefit). The control position is in
the customer’s hands; the organization is in the responsive
position.
Customer service is an attitude not a department.
pharmacySOS.ca | Gerry Spitzner
19. ◦ Consider the life time value of a customer rather than just as a
single one-time transaction. Always think customers for life.
◦ Listen to customers; first understand why, how and what they
want to buy, rather than how and what you want to sell to them.
◦ Positive relationships are a pleasant result of conducting a
professional, prepared and productive patient interaction.
◦ But callingthem your patient is more than having a "great
relationship" with them and helping them with their problems.
◦ For a customer to become your patient; you have to earn it…
pharmacySOS.ca | Gerry Spitzner
20. Your customers and patients want you to be a valuable
resource to them all the time … when they need you.
◦ Bring them ideas, insights, and information to help them achieve
their health objectives.
◦ Guide them about how to make a good decision, as well as who
needs to be involved and the next steps.
◦ Keep them up to date about any changes that could impact them—
positively or negatively.
◦ Challenge their thinking and provide them with fresh perspectives.
◦ They want to know that their Pharmacist really cares about them
and their health. It’s a feeling…
pharmacySOS.ca | Gerry Spitzner
21. How did the customer feel ?
◦ A focused customer experience is not just about a rational
experience (e.g. how quickly a phone is answered, what hours you’re
open, delivery time, etc.).
◦ Customer experience is about how a customer consciously and
subconsciously sees his or her unique experience.
◦ How the customer feels is their unique perception and it’s based on
their total experience.
Loyalty is not a tactic driven by points or low prices.
◦ Customer loyalty is not a tactic but a way of doing business.
◦ Service experience has more impact on customer loyalty than any
other function of a Pharmacy business.
pharmacySOS.ca | Gerry Spitzner
22. pharmacySOS.ca | Gerry Spitzner
1. Awareness – HCC knows about a
service but doesn’t think much about it
2. Engagement – HCC knows and cares,
but isn’t yet compelled to act
3. Activation – HCC takes action
4. Reflection – HCC reflects on the patient
experience, and perhaps rates their
Patient Satisfaction
5. Loyalty – HCC’s would repeat the
action, expect a good experience and
may tell others about it
23. Some interesting and thought provoking findings:
◦ 89% of customers who receive poor service will abandon your
brand for the competition
◦ 64% of customers say service is more important than price
when it comes to brand loyalty
◦ 55% of customers would pay more to guarantee great service
◦ 64% of customers said that a company’s customer service
reputation is very important
pharmacySOS.ca | Gerry Spitzner
Source: Retail Council of Canada
24. The #1 Factor in Customer Loyalty
◦ 19% - Company/brand impact
◦ 19% - Product and/or service delivery
◦ 9% - Value-to-price ratio
◦ 53% - Experience with service provider
Companies don’t dazzle customers, people do.
pharmacySOS.ca | Gerry Spitzner
Source: Jill Konrath
25. There are a lot of moving parts to
all retail businesses and they are
crucial to customer experience .
pharmacySOS.ca | Gerry Spitzner
26. For your project you’ll need to address these
areas in your business plan and presentation.
Finance
◦ Monitoring, analysis, cash flow, sales, expenses, Profit & Loss
Marketing
◦ Research, omni-channel communication to ideal customer
audience, and branding activities
Operations
◦ Daily activities delivering the promise of marketing & customer
experience with an eye on sales and expenses
pharmacySOS.ca | Gerry Spitzner
27. Patient/Customer Experience Profitability
Inventory management
Pricing
Merchandising
Staff
Receiving
Loss Prevention
Staff Schedules
Operations systems
Training
Supplies
Information Technology
Computer hardware
Policies & Procedures
Wages and Benefits
Computer software
Cash flow
Sales Revenue
Sundry Revenue
General Expenses
Fixtures
Repairs and Maintenance
Occupancy costs & Utilities
Advertising & Marketing
Wholesaler and suppliers
pharmacySOS.ca | Gerry Spitzner
28. Inventory
◦ It is all about flow - keep goods (products) flowing
Merchandising
◦ Any practice which contributes to the sale of products
Staff
◦ The quality of an employee's work experience has a direct
impact on the quality of the customer's experience
Pricing
◦ Setting competitive pricing is an art form
pharmacySOS.ca | Gerry Spitzner
29. What are the main types of Retail
Community Pharmacy and some
details of how they work?
pharmacySOS.ca | Gerry Spitzner
30. 4 Main formats of Retail Community Pharmacy
Corporate Pharmacy
Franchise Pharmacy
Banner Pharmacy
Independent Pharmacy
pharmacySOS.ca | Gerry Spitzner
31. Wholly owned by a large company
Pharmacy is a department managed by a Pharmacist
Rx Manager is an “employee” of a chain Pharmacy
Managers are paid a salary and compensated with
pay-for-performance incentives
Operations/Marketing are determined by head office
pharmacySOS.ca | Gerry Spitzner
32. “SDM | Associate” concept
Own the business but not the physical assets
No capital investment or personal capital risk
Guaranteed minimum annual income and benefits
“Share” in profitability, based on benchmarking similar stores
Quality support services in Operations/Marketing/Finance
SDM Associate agreement is a renewable 3 year deal
Retained equity requirements
Franchise agreement restricts or outlaws certain activity
All inventory comes from own warehouse/wholesale
Excellent business training; especially for Pharmacy managers
pharmacySOS.ca | Gerry Spitzner
33. “Medicine Shoppe” concept
Own the business and the physical assets
Franchise fees 4-6% of sales
Trademark rules
Required program participation
Full Pharmacy ownership
Capital investment required
Ongoing Sales and Biz Dev support
Custom marketing strategy
Training and Professional Development
Preferred Supplier agreements
pharmacySOS.ca | Gerry Spitzner
34. What is a banner Pharmacy?
Looks like a chain; but really isn’t. Power of trade mark
Independently owned and operated but working together
Sales/promotions, contracts
Buying group wit a menu of services
Sales percentage fees or monthly membership dues
Your own profit and loss centre
Owners often have more than one store
Sometimes shareholder; ie in a wholesale
pharmacySOS.ca | Gerry Spitzner
35. Key features include:
No trademarked name affiliation
Independently owned and operated
Often belong to a wholesalers IND program
Entrepreneur/Self-management
Creative freedom
Not havingto answer to others (especially regardingthe
pharmacy and professional service focus)
Financial independence and high risk/high reward
Can move quickly to seize opportunities
pharmacySOS.ca | Gerry Spitzner
36. A complex process of medication
distribution from manufacturer to
patient
pharmacySOS.ca | Gerry Spitzner
38. Wholesalers
◦ In BC; 2 national & 2 regional distribute Rx, OTC & Front Shop
◦ Primary suppliers to Banners and IND’s
◦ Secondary suppliers to Chain
DSD; ( Direct Store Delivery )
◦ Select Generic/Brand suppliers, some Front Shop categories
Self Distributors; Chain
◦ SDM, London Drugs, Save-On, Safeway
◦ Note: chains also draw from local wholesalers, especially narcotics/cold chain
pharmacySOS.ca | Gerry Spitzner
39. For Retail Community Pharmacy –
the future is not in the rear view
mirror.
Taking a step back from the
hysteria, it is easy for us to see that
retail Pharmacy is doing what it
always does - change constantly.
pharmacySOS.ca | Gerry Spitzner
40. “I really believe that in the future, companies like Novartis are
going to be paid on patient outcomes as opposed to selling the
pill.”
“Beyond-the-pill is a logical and inevitable path forward for all.”
“Creating value by embedding products into a holistic offering
with the aim to improve patient outcomes and provide tangible
competitive advantages.”
“Such holistic offerings include telehealth services, wellness
programs, wearable sensors and improved chronic disease
management over patients’ lifetimes.”
pharmacySOS.ca | Gerry Spitzner
Source: Joseph Jimenez, CEO of Swiss healthcare giant, Novartis
42. Should Pharmacy focus on patient services vs dispensing?
◦ Funding for new initiatives is still tied primarily to
dispensing and drug margins, rather than on reimbursement for
patient services and outcomes.
◦ Per capita prescriptions is climbing among all age groups;
ranging from 4.21 Rx/year among those aged 0-39 years and
41.82 Rx/year for 60 years and up.
◦ More Rx’s means more customer traffic and an opportunity to
engage patients in extended services.
◦ Focus on re-fills & medication adherence with existing patients.
pharmacySOS.ca | Gerry Spitzner
43. Pharmacists practice at the most interfaces in the
healthcare network and are uniquely positioned to
provide value to the health of the public.
◦ Pharmacy practice is a knowledge industry at the cross roads
of health care. Eventually everyone ends up at our doorstep.
◦ Pharmacist is the most versatile profession in healthcare
◦ Pharmacists speak multiple languages more than other HCP’s
◦ Think beyond the dispensary to find incremental revenue
opportunities
pharmacySOS.ca | Gerry Spitzner
44. If you look at broader trends in the
long-term; healthcare delivery is
going to be a retail-driven model —
it is going to be driven by consumer
choice.
pharmacySOS.ca | Gerry Spitzner
45. Canadian population is spending less on clothing,
entertainment and alcohol and more on healthcare,
cell phone, and internet.
Overall total spending is flat with last year but a major
shift…healthcare spend is up 62% year over year.
Top healthcare and well-being topics on respondent’s
minds are healthy eating, weight management, and
starting or continuing an exercise or health program.
pharmacySOS.ca | Gerry Spitzner
Source: Nielsen Canada
47. Source: Nielsen Canada and Allidura, GSW,
and the Harris poll
27% of Canadian population
are millennials; 28% are
boomers.
70% of millennials say they
stress about personal health
97% say that being happy is
important to them, and 95%
say the same about being
healthy.
only 42% say they consider
themselves healthy.
pharmacySOS.ca | Gerry Spitzner
49. 2016 will be a huge year for Tele-health.
◦ Using secure video-conferencing to live-link patients with their
physicians or pharmacists from the comfort of their homes-or even
from work-using their laptops, tablets or smartphones.
Tele-pharmacy is the provision of pharmacy services in
rural and remote communities.
◦ BC is only province in Canada that has regulation with college
approval
◦ BCPhA supports the provision of telepharmacy services
◦ Opportunities for collaboration with other remote pharmacies to
focus on a niche patient services -- where not in competition
pharmacySOS.ca | Gerry Spitzner
52. pharmacySOS.ca | Gerry Spitzner
Some believe that wearable technology
is simply a transition technology.
53. Healthcare and the practice of Pharmacy is arriving at
a new intersection.
◦ The shift in focus from accuracy in dispensing to therapeutic
appropriateness and patient-centric support for optimal health
requires time and intentional strategies.
◦ What if we had a healthcare system that kept us healthy?
◦ Focus on beyond the pill strategies instead of accuracy and ‘fast’
service and your customers will really start to see the value of
your role and will soon become your patients.
◦ Do well by doing good. Focus on care; commerce will follow.
pharmacySOS.ca | Gerry Spitzner
54. To your business and professional success,
thank you for your attention.
Questions? Email me…
pharmacySOS.ca | Gerry Spitzner
56. Gerry Spitzner is an optimist with a curiosity for improving life and business results. Optimism is
the ability to focus on where we're going; not where we're coming from and Gerry is passionate
about making the public aware of the great things Pharmacists do. He believes in helping
pharmacists achieve leadership, professional practice, and business success.
Drawing on 40+ years in regional multi-site retail Pharmacy operations and drug store
ownership with SDM, plus business development with K&F in the Pharmaceutical wholesale
supply-chain; and as a consultant; Gerry has the unique advantage of having worked in several
different business models within retail Pharmacy.
Fascinated with a lifelong curiosity for why customers buy and a passion for retail Pharmacy;
Gerry guides his clients to create, engage and keep great customers by delivering the promise
of an extraordinary customer experience. He has devoted his life to sharing his thinking with
leaders in Pharmacy to take advantage of trends and build business plans that increase sales
and profitability through creating a competitive advantage.
His company is pharmacySOS.ca, a Vancouver-based business management consultancy with
Strategic Operations Services to advise, guide and support Pharmacist owners to brand and
market for optimal growth through customer experience. With a clear understanding of retail
Pharmacy and drug store operations he uses a solution oriented focus with ideas and
alternatives that clients can use to address the changing marketplace issues they face right
now. Gerry understands who they are, what they need, and where to find it.
pharmacySOS.ca | Gerry Spitzner