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Should you cut your way to growth?

Running Your Business

Should you cut your way to growth?

Pharmacies have a choice of cutting costs, or improving productivity using their pharmacy teams to improve quality and efficiency

As a young manager, a few years ago – okay, many years ago – my boss said to me, “Always be efficient, but remember that you cannot cut your way to growth”.

By cutting funding and introducting the Quality Payment initiative, the government is currently asking independent pharmacies in England to cut back, and become more efficient, and at the same time to take steps to improve patient service.

The Department of Health has allocated £75 million to the Quality Payment scheme, taken from the overall funding for 2017/18 of £2.592 billion. Payments will be made to community pharmacy contractors who meet certain gateway and quality criteria, with a maximum of 100 points available. With £64 per point, this equates to a possible £6,400 per contractor.

There are eight quality criteria, and two of the four gateway criteria are:

  • Provision of at least one advanced service
  • Ongoing utilisation of the electronic prescription service (EPS).

In fact, these are all activities that pharmacies are probably doing already, or should be. They are also similar to the fundamental elements of the Pharmacy Growth Programme run by Pharmacy Growth Specialists.

Help available

The good news is that there is help available. The Pharmacy Growth Programme has already worked with more than 50 independent pharmacies and pharmacy groups across 100 sites throughout the country, to attract more patients and customers, capture more of their weekly shop and help them to access more services that enhance their wellbeing.

To put the impact of the programme into context, the commercial benefit ranges from a minimum of 10 times return on investment to more than 20 times return on investment. This translates to an increase in gross profit of 10 to 30 per cent. It’s a real success story.

Team focus

Ultimately, productivity and revenue come from your team and how they use your processes to engage with your customers for your pharmacy to become their preferred and regular choice.

To make the most of your team, consider the following two questions:

  • How much does your team contribute to the profit of your pharmacy?
  • How much value does the team create above and beyond efficient dispensing?

In our experience, working with many pharmacies, most people come to work wanting to do a good job, but often their focus during their busy day is exclusively clinical. We see great reactive service and high clinical standards during our visits to our pharmacy customers, but this alone isn’t enough to move a business forward.


What gets in the way? What stops people who want to do a good job contributing to the growth of your pharmacy business? Does performance dip when you or your pharmacy manager are not there for more than a few days?

Fortunately, as pharmacy growth experts, we have some useful insight to share. For example, the most common challenges we observe are:


  • The focus is on running an efficient dispensing process, not the customer experience
  • Professionalism – surprisingly, this can get in the way of growth. For example, being caught up in clinical standards and continuing professional development
  • Expert – being the expert who gives advice is great for the most part, but it can lead to mostly one-way engagement with customers. People need to be involved in decision-making around their health
  • Patient focus – failing to see patients as customers, and missing services and retail opportunities.

Retail knowledge

  • Not investing enough time and commitment to building equivalent retail knowledge as clinical knowledge – when was the last time any of your team completed a retail module for CPD?
  • How many of your customers buy ‘one more thing’ when collecting their prescriptions?
    Read more about this at

Customer journey

  • Patient/customer experience – what should this look like to guarantee they buy more from you, and recommend you to others?
  • Listening to customers – are customers encouraged to give feedback? If so, are their ideas discussed and considered?

Team commerciality

  • Are your team members encouraged to think commercially and come up with ideas every month? These could be based on customer feedback
  • Are ideas selected, implemented and do they improve profit significantly?
  • Is commerciality rewarded? Incentivising staff may improve performance.


The Quality Payments scheme is a government initiative that rewards you for better quality of patient experience and pharmacy efficiency, so if you link this to team commerciality, then growth is inevitable.

Consider the following commercial quality standards:

  • More patients sign up
  • Patients access more of your services – commissioned or private
  • Eight out of 10 patients buy one more thing on top of collecting their prescription
  • All government services/initiatives (for example MURs, NMS) are always ‘maxed’, not only to benefit patients and improve their experience, but also to contribute to pharmacy profitability.

How to leverage the opportunity

Why not take the theme of quality and make it work for you, your team and your customers?
You need to make the team the heart of your business, as they will set the quality standard for your growing customer base. Engage your team in the following, every day in every way:

  • Keep it as simple as possible – see our list of practical actions to develop a quality team and improve customer engagement
  • Set up your own performance environment
    – Gather customer feedback every week
    – Match this feedback with services and products
    – Select the most profitable
    – Set up an initiative to improve your numbers
  • Performance process – your team should discuss what your customers should experience, and how to make that happen.
    – What is the initiative and the experience your customers will have?
    – How best to merchandise or signpost the service or products?
    – How to introduce the service?
    – How to measure (set targets low)?
    – How to assess? For example, this can be a weekly review to help improvement, or an end-of-month review with sign-off, after which they move on to a new initiative
    – How to deliver the service and how much time to allocate to it?

Performance coaching

Ask 10 people what coaching is and you’ll get 10 different answers. Some people tell us they coach all the time, but they do not coach, they just tell nicely, while others believe coaching is a soft option or, for whatever reason, are cautious about using it.

We have seen some examples of great coaching in community pharmacy, and it’s often the case that the people doing the coaching are completely unaware they are natural coaches.

An easy start to coaching

Getting started with coaching involves asking the following questions when launching an initiative, checking progress and reviewing outcomes.

The steps are as follows:

1. Set up
What is the initiative or idea?
What will the customer experience?
What do we have to do?
How will we measure it?

2. Progress
How are we performing against our target?
Are we up to date with actions?
What is working?
What is not going so well?
Do we need to change or update anything?

3. Review
Did we do everything we said we would do, on time and to standard?
Did we achieve our target?
What worked?
What didn’t?
What did we learn for next time?
How do we keep it going?
Who deserves recognition?
Move on to next initiative?
Ensure that you recognise the effort, and praise the results.

Time to give it a try?

What is the worst that could happen by taking some of these steps? You will be better informed about your team and, importantly, about the productivity of your business.

Why not take all (or some) of the recommendations in this article to prove to yourself, and for your team to prove to themselves, how they can make a commercial difference? A simple way to get started is to set a challenge for the team, allow them time to discuss the challenge and come back to you with their plan. You will need to:

  • Agree actions and a time frame
  • Practise with each other
  • Make it happen.

There’s no doubt community pharmacy continues to face financial challenges, but there is an opportunity to take some of the requirements of the Quality Payment scheme and carry that ethos through your business to improve your bottom line.

RPS Ltd/Pharmacy Growth Specialists are experts and can help, so please get in touch with Dennis Reid on 01344 849397.

Read more about The Pharmacy Growth Programme below.


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