Feeling the pressure in independent pharmacy?
How is community pharmacy to cope with the swingeing cuts imposed by government?
After several announcements, it soon became clear that the government intended to implement what is in effect a 12 per cent cut in funding between December and March 2017 â€“ a move that may reduce the number of pharmacies in England by up to 3,000.
There is more to come. In the next financial year (2017/18) the global sum will be further reduced by Â£95 million, which equates to an additional 7.4 per cent cut. Combined with Brexit, this may suggest there are many stages of change on the way in the regulatory landscape, which will inevitably impact on community pharmacy.
Hop to it
You may or may not know the story of how to boil a frog. Drop a frog into boiling water and, naturally, it will jump out. However, put it into cool water and heat it up, and the frog will stay in there until it slowly cooks and dies.
The question community pharmacy owners need to ask themselves is: am I being cooked slowly? You may not feel the pain at the moment, but itâ€™s quite possible you will in the next few months â€“ and if not then, you might in the next round of cuts. If you donâ€™t act now and take steps to ameliorate the pain and get yourself out of the hot water, it may be too late.
How do you feel? Happy that the future is rosy, resigned to the fact that it is what it is so thereâ€™s no point worrying, or a bit anxious? How we feel determines our actions. We do not necessarily do what we know we should, but instead, we do what we believe and feel.
To give you an example, consider people who smoke. They know itâ€™s a bad habit, so providing more information about the health risks does not result in an epiphany and encourage them to stop. The barrier to change for many is that they do not believe they can quit, or they think that if they do quit, they might not be able to stick to it.
Coming back to pharmacy, we know that change is definitely on its way, but do you believe and feel that change is necessary?
To engage meaningfully in change, we have to want it â€“ and be part of making it happen â€“ it wonâ€™t just occur spontaneously. This is because the brain looks for what we programme it to look for. When buying a new car, for example, we start to notice how many of that model there are on the road.
Henry Ford famously said about this, â€œWhether you think you can, or you think you canâ€™t â€“ youâ€™re right.â€ And he was right, of course. If your thinking is that no change is required, then your brain will notice all the examples to support that thinking. However, if your brain focuses on new opportunities, then it will pick out the ways of getting there while on that journey.
You may not have all the answers at the moment, but your brain will help you consider ways to help provide a solution. Moreover, if you combine that thought process, and a desire for change with experienced people, such as the team at RPS, you will get there more quickly and with greater success.
If you had to rate your commercial performance compared to your clinical excellence, what would you score yourself out of 10? Are you happy with the amount of time and energy you have dedicated to your business compared to your efforts to improve your clinical and professional skills?
Change is all around us at the moment and, as a consequence, opportunity is in the air. The market is craving that change. Both in the UK and in the USA, voters have made it clear that they demand change. They are looking for something different, something that makes them feel better.
While there is no doubt that regulatory change is a challenge, it is also the catalyst for opportunity. If you do nothing, like our amphibian friend, and stay in the pot of water as it slowly heats up, you will be the unwitting architect of your own demise.
But are there really choices to be made? If so, what are they? What will differentiate your business and then drive performance?
There are many opportunities, and the choice for each pharmacy will depend on what is right for you. What do you stand for? Who do you want to be? What is the right mix for you?Â
- Volume â€“ do you want more scripts, greater market penetration, more partnerships with surgeries and care homes, for example?
- Sales â€“ if every patient bought one more thing from your retail range, what difference would that make?
- Profit â€“ from both commissioned and private services (what your local community needs and wants should drive this) l Costs â€“ efficient processes will reduce overheads and buying to sell (stock velocity)
- Buying â€“ selling quickly and at a slightly lower margin will generate more cash profit. The cumulative impact of moving each number a little has exponential outcomes on your profit.
My pharmacy vs community pharmacy
There is a lot of pride invested in the community aspect of community pharmacy â€“ it is a great objective, but what does it mean?
Pharmacists often talk about the community services; in particular commissioned services. The reality for most service users is that they want to be treated as individuals, and to know that people just like them also choose your business as their pharmacy of choice.
Achieving the status of being labelled â€œmy pharmacyâ€ by your customers comes down to how you make them feel. Itâ€™s about understanding, helping and supporting them when they need it, and itâ€™s about treating the person, not the condition. While this may sound obvious, all too often this does not happen, or not as well as we think or would like it to, and certainly not enough to increase market share noticeably.
Many of the multiples say the service they provide is the most important part of what they do. They also say their people are critical in delivering that service, but quite often, neither is treated particularly well or feels special.
This is where independent pharmacists have a competitive advantage â€“ the ability to treat everyone individually and the ability to make decisions quickly in response to customer needs. The multiples can never catch up due to the nature of their size, which makes them less agile, less responsive and less flexible.
Independents need to leverage this advantage and make every contact with customers count. In reality, it isnâ€™t even that difficult. Here are a few simple questions to consider:
- Who are your target customer groups?
- What do they need from you?
- What services do you need to offer?
- What do they want from you to keep coming back?
- What do you need to do differently to make it work?
- How will you let everyone know?
Plan of action
RPS works with pharmacies all the time, and we know that change can be a challenge when your week is already very busy. But you need to invest some of this precious time to commit to a specific change. Work out what your customers want, then take your first steps immediately. Do not wait until you have the perfect plan, otherwise you will never start.
Itâ€™s all about doing something different to make a positive change. To get you started, why not consider the following:
- Have one new initiative each month
- Commit to one new target each week
- Do one new thing every day. The key though, is to do something today.
Advanced preparation is crucial. Consider the fact that athletes who want to compete in the next Olympics in Tokyo in 2020 are already training and making changes. Sometimes failure occurs, not as a result of lack of effort or from doing things badly, but simply from being too late. Rest assured, the multiples and national chains are already making plans to ensure they survive the cuts.
So, donâ€™t wait. Act now. Set targets, then help your team to take responsibility for achieving those targets within a specific timescale.
So, what can you do?
RPS (Retail Performance Specialists) runs a Pharmacy Growth Programme to help independent pharmacies increase their profit.
We have worked with more than 40 pharmacies and it is proven to be so successful that we guarantee a 10-fold return on investment and an increase of Â£50,000 onto your gross profit.
We can help you to thrive despite the pharmacy cuts. Get in touch now and start off the New Year by doing something different.
Find out more on 01344 849397
Viatris has created this short video based on a publication reviewing global research into the potential impact of the Covid-19 pandemic on mental health. It identifies six areas where psychiatrists can play a role in supporting people's mental health through these difficult times.