Marketing My Pharmacy – Where Do I Start

By: Matt Tompkins

Years ago, while working for a marketing agency that served the healthcare industry, I was regularly asked a variation of the question, “how much should I spend on marketing.” Many times, I heard people throw out concepts like “you should spend 2% of your revenue” or “you need at least $3,000 per month”. That just seemed awfully random to me. Shouldn’t it depend on the type of business? What product or service are you marketing? Who is the audience you are trying to reach? We need to understand the answers to these questions first, before determining what your investment should be.

So, I sat down and started with the end in mind. What if we think about this as a math problem that is focused on an ROI on the investment in marketing? And who doesn’t love a good math problem, right?!?

Before I get to that, I want to address that branding has its place too, and most branding campaigns don’t have a specific ROI target. Those campaigns may be measured by followers or mentions or by using a brand listening software. Branding definitely has its value and its place in marketing, but it won’t be the subject of this series. Maybe we’ll tackle that down the road.

As I thought more about defining and calculating an ROI for marketing, and the investment needed to generate an ROI, what came to mind for me was thinking about it more as customer acquisition, or in the case of a pharmacy, patient acquisition. By thinking of it this way, it meets my need to connect my marketing investment with a result. It also helps to define the marketing process:

I invest in marketing > “stuff” happens > I gain more customers and patients to serve.

It is very easy to listen and react to “just post more on Facebook” or “get some bag stuffers” or “you need to get out into the community.” The purpose of this blog is to help you recognize that each of those efforts may be valid and fit your needs, but without taking a few minutes to understand how to create the clarity you need to understand if it’s working and double down when it is.

Let’s start with the end in mind = I gain more customers and patients to serve.

What is a new customer or patient worth to your business?

You may not have gotten into pharmacy with the goal of making a profit, but the reality of it is that your community needs you to be sustainable. Your team needs you to be sustainable. Your family needs you to be sustainable. Therefore, it is vitally important that you are profitable, because a profitable pharmacy IS a sustainable pharmacy.

Here is a simple way to think about it (you will need a couple pieces of data from your PMS or your P&L):

• Gross Profit per Rx
• Average number of Rx’s per Patient per month

We could complicate this further by adding in the services you provide, like flu shots, or the OTC products your patients use, but for now let’s use the lowest possible number, knowing that in reality it is likely more than what we are calculating.

Gross Profit per Rx = Total Gross Profit ($) in a month divided by Total Rx’s (#)

• I would separate out any compounding you do or any specialty, which if you do a lot, it is probably separated on your P&L. If it’s a small percentage of your business, then leave it in, it won’t change the number too much. Note: If you do a lot of compounding or specialty, then doing this same exercise specifically for those prescriptions will be helpful too.
• Wondering how you compare to a benchmark? The 2023 NCPA Digest data would suggest that this number is between $12-13.

Average number of Rx’s per patient per month = Total Rx’s dispensed in a month divided by the number of patients served in that month

• If this is not a readily available number, a quick online search from the CDC and other sources suggests that the average number of prescriptions is between 3-5.

**Input your numbers into our calculator here, then continue reading more below.

Here is an example so that I can share what I do now that I am armed with this information.

While it is likely that your team and your customer service keep your patients coming back year after year, for the purposes of helping design a marketing program and investment strategy, let’s assume the value of a patient is the annual value displayed above and not 5-10x.

If we make an assumption that through the efforts that we will define next, that you can bring in one new patient per week. That’s it, just one per week.

Note: This is intended to show the minimum possible annual value of a patient. It can be higher when factoring in immunizations and other services, OTC purchases, compounding, and other ways you engage your patients and provide solutions.

Now that I know what a patient is worth, how do I choose how much to invest to bring them in?

To help you organize your efforts let’s start by organizing them into segments:

1. Inside and around the store
2. Out in the community
3. Digital marketing

To provide complete details on how to execute across all three segments will require us to create an additional series of blogs, which we will do. So, we don’t keep you waiting I’ll share some low hanging, easy to adopt ideas, and point you to some of the other resources we have published over the years that you can leverage.

Inside and Around the Store

Rather than thinking about doing a Facebook campaign or sending out some postcards, let’s start with a low investment option that you can do right inside your store and with your current staff.

Ask for referrals.

Ok, I know what you’re thinking. “We have tried it before and it’s not easy. It feels like I am selling, and I am not a salesperson, nor is my staff.” Here is another way to approach it.

1. Print a simple referral offer or coupon. For example, $5 off OTC products upon their first visit.
2. When you or your team have a great encounter with a patient, a simple script sounds like, “Mrs. Smith, I am so glad we were able to help you today. We love making you happy. Do you know of a neighbor or a family member who we can delight? We would love to help them too. Here is a $5 coupon you can offer them just to try us out. Key point: I intentionally did not use “someone” or “anyone” but rather a neighbor or family member. If you know that they are active in their church or are in a bridge club, use that. By being specific, you help them think of a specific person they might ask.
3. You provide great service every day and make a difference in the lives of your patients. If you served more patients, they would be better off. We are trying to serve more people to improve patient outcomes in your community. So, when you give great service, offer to that service to even more people, via referrals.
4. Now that you know how valuable each new patient you are offered the opportunity to serve, create a reward system for your team. For example, create a scoreboard in the back of the store where your team can log how many referral conversations they have had and whoever gets the most each day gets free lunch. You could make it a team incentive as well. If we have 20 conversations by the end of the day on Thursday, free lunch on Friday for the whole team. Get creative.

I shared a similar story about how getting specific in your conversations with doctors about the patients you are trying to reach when you are doctor detailing Out in the Community. You can read it in the Pharmacy Owner Feedback blog in February 2024.

One other previous blog of note is the Marketing Kit for Store Closings, where we provide you with a link to PharmFresh who has flags, banners, yard signs, and more available for you to capture some of the traffic if a chain is closing near your store. We also included some social media images you can use to attract those new patients.

Still want more, check out our Co-op Connection and search for more Marketing Tips.

Marketing is both art and science and requires thought, organization, diligence, effort, and patience. We are committed to the success of independent pharmacy, and we continue to provide tools and resources for our members to succeed.

Once you have mastered asking for referrals you will be ready to continue your marketing journey, Inside and Around the Store, Out in the Community, and through Digital Marketing. We will continue to provide more practical ideas and plans for you to use. Some may be low cost and others will require a larger investment, both in money and in time.