Strategies for a Flourishing Pharmacy Business

The World Health Organisation (WHO) affirms the community pharmacist as the health professional most accessible to the public (WHO, 1997). According to the International Pharmaceutical Federation (FIP), the community pharmacist is an expert in pharmaceutical care, health promotion and pharmacotherapy. He is a professional communicator with patients, other healthcare professionals and decision makers. He delivers high quality products, services and communication. The community pharmacist equally documents his actions and communicates outcomes with professional colleagues (FIP, 2014). Community pharmacists have also earned themselves the reputation of the most trusted healthcare professionals (APHA, 2009). These global reputations stem from the fact that community pharmacies are located close to where the people live, work and play, stay open for long hours and require no previous appointment bookings to see the pharmacist.However, operating and managing retail pharmacies in a developing economy like Nigeria is fraught with a myriad of challenges, from over-regulation, chaotic distribution channels and unpredictable policy environment, to hyper-competition and deficient public infrastructure. Yet, the activities of community pharmacies are so vital to the lives of the communities that they are classified as essential services by most governments. Most retail pharmacies provide not just essential, safe, quality and efficacious medicines but also sound professional services by the pharmacists.

In Nigeria, there are about 4500 retail pharmacies serving over 170 million citizens. This means almost 40,000 individuals being served by one community pharmacy. Moreover, in view of the poor economic indices with the attendant high prevalence of diseases,one could be tempted to assume that every community pharmacist would have his hands full with the sick in need of good health and that retail pharmacy business in Nigeria would easily flourish. However, this assumption has never found a place in the real lives of many retail pharmacies in Nigeria.

Business success requires an entirely different set of dynamics. Studies have shown that manypharmacy graduates have an enormous array of technical skills but do not necessarily have the business skills to leverage them for competitive advantage and business success (Alston and Waitzman, 2013). The critical building blocks for a flourishing business are essentially the same across different sectors of human endeavor. These business practices are not usually part of the academic curricula of the conventional educational institutions. They are taught in a different kind of school, the school of the real world, the University of the Streets. Business success happens on the streets. The best business modules from all the business schools in the world cannot guarantee business success till the time-tested principles are translated from paper to the real world. However, a consistent application of these principles will guarantee business success, always. This explains why many non-pharmacists in Nigeria have managed to contrive very successful pharmaceutical business empires while the pharmacists only tend to hang onto the crumbs that occasionally fall from the tables of the masters. The present article addresses itself to some of these salient determinants of business success as taught in the University of the Streets.

1.Retail Pharmacy Business is not for all Pharmacists.

My dear Pharmacist, the Pharmacists Council of Nigeria (PCN) may have told you that your license to practice empowers you to run a retail pharmacy business. That is the truth, but not the whole truth. The PCN forgot to tell you that success in retail pharmacy business requires passion for community pharmacy so strong it drives you to take personal responsibility for doing whatever is necessary for the business to thrive. If you cannot work for long hours, answer many ‘stupid’ questions from customers, listen patiently to endless complaints, manage relationships with staff, landlords, regulatory agencies, suppliers and still keep your personal and family life together, all at the same time, you may find retail pharmacy business a nightmare. While pharmacists may retire into community practice from other practice settings such as hospital, industrial, academic, social and administrative pharmacy, it must be noted that emphasis of current discourse is on full-time endeavor in retail pharmacy.

So the first strategy for a flourishing retail pharmacy business is not about what you do. It is to think. Think to find if you have the mindset, the passion, the energy, the drive to play in the retail pharmacy field.

2.To Vision, add Passion.

Every retail pharmacy business should be founded on a vision by the business owner. This vision should be so clear and compelling it can be captured in words. It is called a vision statement. It encapsulates the reason for the pharmacy business. How this compelling reason is to be achieved should be articulated in a mission statement. However, the pursuit of the vision and mission must be guided by a set of values. So the retail pharmacy should have on display (much like the pharmacist’s and premises licenses), a statement of the vision, mission and core values. These are not mere clichés but driving forces and guiding lights. They must flow from the top. The ownership and management must so believe in these guiding lights that their passion exudes and infects the staff and even customers. This contagion in most cases gives birth to a mantra, a by-word that creates a positive culture and climate at the pharmacy. So we have a team made up of ownership, management and staff, chasing a common passion not cash, having fun and making everybody happy.

So the question is what are the visions, missions and values of the retail pharmacy business?

3.To Vision and Passion, add a Plan.

A detailed business plan is necessary for a successful retail pharmacy business. Even existing businesses need periodic plans in the form of annual budgets. These plans help assess performance and measure progress. Many pharmacists who managed to pass the course on pharmaceutical calculations during training are scared stiff in real life whenever the conversation gets to spreadsheets, profit and loss accounts, return on investments, balance sheets and cash flow analysis. Yet cash remains the lifeblood of business and if the pharmacy business runs out of cash, it simply expires. For the business to flourish, it may require the injection of ‘other peoples’ money ’. This may come from partners, equity investors, bank loans, venture capitalists, family and friends etc. These investors will need to see the numbers in order to be convinced the business is profitable. Even if the funds come entirely from the savings of the business owner, it is important to have an understanding of financial analysis. How long will it take for the business to recover cost, how does the pharmacist know it’s time to expand, how many employees are ideal for the size of business, which customer segments should the pharmacy focus on, how does the business owner separate family expenses from business spending, what level of savings is tolerable, which suppliers should qualify for which categories of transactions, how does the business get out of debt, and what debt-equity ratio is tolerable before the business gets over-leveraged? These are some of the questions that financial intelligence on the part of the pharmacist seeks to answer. While experts may be invited to guide the pharmacist, some basic rules may suffice: sales minus costs equals profit; savings culture always wins despite the level of practice; separating family and friends from business always helps; more employees should only be hired when current hands are so overloaded that they may snap if more workload is added.

So my dear pharmacist get money-wise, get street-wise, do the math, and do it yourself.

4.Break the Box, Join the Entrepreneurs Club.

Retail pharmacy is both a practice and a business. Many pharmacists get confused as to whether they are in practice or in business, whether their clients are patients or customers, and how to balance the demands of ethical professional practice with the imperatives for business success. The truth lies somewhere in between. Building a flourishing retail pharmacy business entails a delicate balance between ethical professional practice and sound business endeavor. My prescription is simple: think like an entrepreneur, act like a pharmacist.

By reason of formal education, the pharmacist has been socialized into a certain perception of human health, pharmacodynamics and pharmacokinetics, ethical behavior and forensics. He views himself as a man of honour who cannot engage in some behavior that may seem unprofessional. How can a pharmacist, dressed in crisp clean shirt and tie with glowing white laboratory coat, stoop so low as to carry cartons, mop the flour and still attend to sophisticated customers. So unless the pharmacist has amassed sufficient capacity to rent a shop in some fancy high street, install air conditioners, exotic shelves, hire cleaners, drivers and sales attendants he may not seize glaring opportunities to set up shop in underserved locations and take the first mover advantage. Pharmacy training thus constitutes a box. Entrepreneurs on the other hand may not have the privilege of formal trainings, they simply see opportunities, want to solve problems, are not limited by reputation and public opinion; they simply move in to serve and earn. They want to do something new, different and better. Once they see the prospects of profit, they take action. This explains why many non-pharmacist entrepreneurs succeed in the retail pharmacy field. They hire pharmacists only because the law constrains them to do so. Whenever they see the opportunity to operate without a pharmacist, they take it. It is called cost minimization.

So the strategy is to break the box, think like an entrepreneur, but act like a pharmacist.

5.Don’t mind the Bees, go for the Honey

Statistics show that for every retail pharmacy in Nigeria, there are over seven Patent and Proprietary Medicine Vendors (PPMVs), ten herbal medicine vendors and four dispensing private clinics. This is in addition to an army of complimentary medical practitioners and unorthodox faith-based healthcare centres. All these businesses compete with the retail pharmacy in providing ‘medicines’ to improve the health of people. There is a paradoxical contribution of technology that seems to be unique to Nigeria. Technology makes for easy access to medical information to one and all. Hence there is an unmitigated practice of self- diagnosis and self-medication among the population. Every customer with a smartphone comes loaded with information on the ailments and medications to treat them. The retail pharmacy thus seems besieged by a clan of bees all ‘practicing’ pharmacy. The market seems full of solutions in search of problems. Many retail pharmacies get lost in the crowd, simply overwhelmed. However, it behooves the community pharmacist to take back his profession in his retail outlet. The pharmacist must apply his professional skills to out-serve competition, offer unique services and focus on individuals, not their pockets. Others may claim to sell the medicines (or alternatives) offered by the pharmacist but they cannot offer the same quality and quantity of professional services. If product leadership is impossible for the retail pharmacy, the difference can still be made in service

So the strategy is to go for the honey irrespective of the bees.

6.Learn to Steal

Yes, you read it right. Learn to steal. I promise you will not be caught! Steal ideas from elsewhere. It is called ‘best practice sharing’ or ‘benchmarking’. Interview successful retail pharmacists in another city, visit their websites, walk into their premises and make purchases, ask questions, lay complaints, feel the quality of their furniture, comment on their merchandizing of products, take a selfie in the premises to capture the ergonomics, listen to the kind of music (yes music) in the background ….., just be sure you do these in a nonchalant manner, like a casual but inquisitive customer in love with the pharmacy. You may then adapt or ‘domesticate’ these ideas and offer the ‘new’ products/services to your customers.

If your honorable pharmacist’s mind will feel guilty of ‘stealing’ as prescribed above, I suggest another strategy. It is called the rule of five. Identify five typical customers of your retail pharmacy. They should represent the various customer groups that make up the bulk of your customers. Deliberately invite them to lunch or dinner. John Mason in his book, ‘Why Ask Why’, says we fail not because we do not have the right answers, but because we do not ask the right questions. While at the table, ask them relevant questions like

•Who do the people say I am?

• What do you expect from a retail pharmacy?

• Why do you prefer one pharmacy over another?

•Who makes buying decisions in the family?

•What can we do differently?

Such customer researches can help identify common patterns and guide your thought. But there are yet no guarantees. You may apply all the prescriptions of your typical customers and still fail chiefly because some people prefer to say only what they think you like to hear. However, such feedbacks can be the difference between success and failure. Your entrepreneur’s instinct must be your guide as you decide what to take away from such brainstorming sessions.

So the secret is to always carry out some form of market research as an enduring business practice.

7.Be a Life-Long Learner.

The road to a flourishing retail pharmacy business is constantly under construction. There is no foolproof way to the top. Retail pharmacists must therefore learn to unlearn and relearn in order to thrive. The pharmacist must remain available and teachable. Learning must begin with the study of self; a thorough analysis of personal strengths, weaknesses, opportunities and threats.

S/he must learn about the customers: their changing demographics and psychographics, preferences, trends and influences. Every encounter with a customer is a leaningopportunity for the pharmacist. Both internal (employees of the pharmacy) and external customers always have useful information from which the pharmacist can learn.

Every business has competitors. The continuous study of competition is key to survival in retail pharmacy business. It doesnot matter how good you are as long as competition is better. Identifying competitors and learning about (and from) them is key to continuous improvement of retail pharmacies.

The learning of supplier behavior and trends will guide the retail pharmacist in the vital decisions involved in sourcing of products, terms of payments for goods and services, size of opportunities represented by relationships with suppliers, as well as evaluation of alternatives.

The learning paradigm applies to the deployment of technology and the internet to facilitate business decisions and operation. The fast-paced evolutions in technology require the community pharmacist to be a fast learner in order to remain relevant to the customers.

Documentation is key to the life of any retail pharmacy. Whatever is not documented is not done. Documentation skills as well as retrieval of information from documents/ databases can all be learned to enhance performance.

The pharmacist must plan to attend conferences, seminars, exhibitions and workshops in relevant subject matters in order to learn better ways to practice.

It is however pertinent to emphasize that it is not what is learnt that guarantees business success but what is applied. There is always a knowing-doing gap, described by Peter Drucker (1973) as the ‘great divide’. Many pharmacists get addicted to attending conferences but still fail to flourish because they fail to apply the principles learnt. Application requires risk taking and positive thinking, forgetting the bees and going for the honey. That is the entrepreneurial paradigm.

8.Think like a Marketer, Act like a Pharmacist

Marketing has been defined as ‘the process by which companies create values for customers and build strong customer relationships in order to capture values from customers in return’ (Kotler and Armstrong, 2006). Kotler believes that achieving organizational goals requires knowing the needs and wants of the target marketsand delivering the required satisfactions better than competition. For retail pharmacies, marketing has two critical dimensions. First is the management of the traditional marketing mix variables (not just the 4Ps but all 10Ps). Secondly, the conversion of every employee into a ‘marketer’ and the development of a company-wide, cross-functional customer orientation, is the so-called total quality management (TQM) basis (Payne et al., 2000).

In the spirit of pharmaceutical care, what is required in retail pharmacy business is not just marketing, but relationship marketing. The establishment of a professional relationship with the client and assuming responsibility for outcomes must be done with a mind to build a long term win-win relationship. Relationship marketing seeks to connect with customers as individuals and does not stop at customer satisfaction but aims at customer loyalty. This is imperative for a flourishing retail pharmacy business as studies have shown that long term survival of community pharmacies depends largely on their ability to retain customers (Reichheld and Sasser, 1990; Ndubisi, 2009). Question is how can a Nigerian community pharmacist apply the principles of relationship marketing to his retail practice? Below is an attempt at the answer:

Table 1:Relationship Marketing in Retail Pharmacy(Adapted from McDonough, 2007)

MARKETING MIX VARIABLERELATIONAL COMPETENCE ATTRIBUTE

Product/ServiceStockingonly high quality and varietyof products. Minimizing stock-outs of essential medicines. Offering qualityservicesthat deliver customer value.

PlaceKnowing the community well enough to provide the products and services at the most convenient time and location for customers.

PriceUnderstanding the financial capacities, willingness to pay, and price sensitivity of the customers and payers.

PromotionEmphasis on relationship building, personal selling and using customer database to send right communication to the right customer groups.

PositioningIdentifying and evaluating the right market segment and niche for the right service

PeopleAbility to attract, hire, train and motivate the right employees to render consistent quality services. Hire on character, train on skills. Pay well, reward better.

PackagingMerchandizing of inventory or the customized shopping bag in a community pharmacy may be the only evidence of quality some customers will relate with.

Physical evidenceAbility to create a friendly facility layout that offers customer convenience and privacy for one-on-one interaction between the patient and pharmacist

ProcessTotal quality management (TQM) in service delivery; standard operating procedure for reduced customer waiting time, convenient self-service etc

PerformanceIdentifying , executing and evaluating profitable services, consistency in making and keeping realistic promises

9.Consult a Mentor.

All community pharmacists went to pharmacy schools, passed same professional examinations, operate within the same business environment and face similar challenges. So no retail pharmacist can effectively serve as a mentor to another retail pharmacist. Right? Wrong! Truth is, every retail pharmacist needs a mentor (in fact mentors). A mentor is someone who has what you need, have been where you want to be and is still in the game (not former champions). For community pharmacists, the ideal mentor may not necessarily be a pharmacist but it is an added advantage if he is one. It is the responsibility of the mentee to seek out and pursue a relationship with the mentor(s). Successful people actually feel flattered when asked to share their experiences, trials and triumphs. Treat a mentor like a valued asset and he may show you secrets that will give speed to your ascent in business. Pursue him relentlessly and he will point out pitfalls that could truncate your vision. If you win the trust of your mentor, he may connect you to networks that took him a lifetime to build.

So the conclusion of the matter is; in all your getting, get a mentor

10.Innovate or Perish

Innovation takes various shapes and sizes but always pays because it is the only way the business can respond to changing market conditions and customer demands. People like new experiences. A mere rearrangement of shelves, a new paint colour in the interior, branded shopping bags and new staff overalls may be enough to excite some customers. Innovation in community pharmacy may entail moving from manual to computerized sales administration and inventory management, deploying technology (short message service (SMS), WhatsApp, etc) to send out relevant health information to customers and run health promotion campaigns. It may be by way of introducing new product and service genres like immunization services, herbal medicines, veterinary medicines and multi-level marketing schemes.

Pharmacists are life-long learners and community pharmacists in particular need to innovate in areas of high-tech and high touch competencies. High-tech skills include technical and technological innovations to improve professional practice. Examples include uploading software to access information on drug interactions, laboratory indices, adverse drug reactions, drug information/ alerts and the like. High touch skills refer to relational competencies required to connect with individuals and groups of customers on a human level. These may include interpersonal competencies to improve communication, conflict handling, trust building, accessibility and commitment between pharmacist and customers.

11.Become a Man About Town.

In response to a question about the secret of their outstanding organisational success, Howard Schultz (2013), the CEO of Starbucks (American coffee chain) said “we are not in the coffee business serving people; we are in the people business serving coffee”. The pharmacist must get into the people business serving pharmaceutical care. Network as much as you can, and then network some more. Network affects net worth. People like to associate with other people who are like themselves. The money you seek is in people; so go where the people go, eat what they eat, speak their language, attend their weddings and birthdays, become one of ‘them’.Never burn bridges, call up an old schoolmate, church mate. Join the neighbourhood/landlords association; while you are there, speak up to be heard but be sure you go with your brain and your integrity. Don’t just go where the people are, go where they are going. Forming an enduring alliance with the culture is what moves organisations to get into corporate social responsibility. A community pharmacy that gives a face-lift to a roundabout near the premises will automatically become a good corporate citizen, known to the entire community. Never forget to write a bold sign that says “Roundabout renovated by XYZ PHARMACY LTD”- that is a good advert. Traditionally, community pharmacists get holed up in their premises all day and resist every temptation to mingle. Contemporary realities demand that this approach must be discarded. There are enormous benefits in cozying up with the people. You get free market intelligence and customer feedbacks on shifting needs, evolving opportunities and changing lifestyles. In your day of crisis, the good name might be all that can save you.

In short, the charge to the pharmacist is to network, network and network some more.

12.Bow before the King.

The unspoken mantra in any retail pharmacy should be “long live the king (and the queen-for political correctness)”. The pharmacist must learn to think like the buyer/customer, identify who makes buying decisions, who are the key influencers, what are the rational and emotional determinants of customer satisfaction. The central object of pharmacist-customer interaction should be to establish and maintain a long term relationship, not just to transact. That is why retail pharmacy business thrives on customer loyalty, not just customer satisfaction. Managing the service encounter therefore becomes critical for the survival of the business. Peter Drucker calls it the ‘moment of truth’- the moment when the customer stands in the pharmacy premises to be served. The pharmacy must invest in the staff, train them to have a customer orientation, carry out role plays, establish standard operating procedures and become deliberate from customer entry to exit in order to maximize the moment of truth. Every customer wants to be treated like a human being, not just a customer. So indulge them. Call them by name, empathize with them, ask after their families, play with their little ones, give them a free gift, show value for their time and make their visit memorable. They will soon forget the medicine you sold them, or how much they paid for it, but they will never forget how you made them feel. A smile can buy more loyalty than a discount. A truly heartfelt apology can disarm the most aggrieved customer. Adopt the customer concept in all relationships both with the internal (employees) and external customers and soon it becomes a culture that creates a friendly climate around your premises. Such culture and climate have been shown to have a long term positive correlation with the bottom line in the service market.

So a winning chant in the retail pharmacy should always be “all hail the king (and queen)”.

13.Work Smart, not Hard.

Professionalism requires more brain, less brawl. Community pharmacy practice demands doing a thousand little things right every day. So the pharmacist must be scientific about decision making

Table 2: Decision Grid

Do it yourself, nowImportant, urgentImportant, not urgentReschedule

DelegateUrgent, not importantNot urgent, not importantIgnore

All activities related to the retail pharmacy business must be documented from dreaming to earning. Contemporary business environment demands that the pharmacist gets professional help from tax consultants, accountants, auditors, lawyers and other relevant experts. These experts are not to be trusted too much as they are in it for their paychecks. While the pharmacist must not over- exaggerate his abilities, he must assume responsibility for the success of his business. An important component of working smart is establishing a balance between personal, work, family and social demands by the pharmacist. The decision grid above can be applied to rightly categorize these competing dimensions and assist the pharmacist to build a balanced life as the retail business flourishes.

My advice for the pharmacist is: get a life, plan your work and work your plan, hope for the best but prepare for the worst. Hard work pays, but smart work pays better.

14.Sell, Sell, Sell

We must not confuse marketing with sales. Marketing may tell of the features and benefits and create a positive perception of us and our products and services. However, no level of marketing will bring one naira from the pockets of prospective customers. Only sales will. Selling is not telling. Sales happen if and when the customer receives our products and services and pays money in return. Selling is the power behind business performance. It drives the cash flow. Real customers comprise only those ready and willing to pay. All others are prospective customers at best. So the entire sales staff of the pharmacy must be trained to close sales, ask the customer to buy, offer alternatives and give incentives. Selling entails engaging the customer, challenging them to think, giving them a chance to try the new product and encouraging them to arrive at a buying decision. The pharmacist must not be too ‘professional and gentle’ to ask the customer to buy now. He should know when it makes sense to give price discounts (though he should avoid the price war with competitors). He must adopt the practice of targeting and segmenting; identify the customer groups that buy the most and focus on them. Those fancy medicine brands that sit on the shelves for very long periods may make the pharmacy look beautiful and colourful, but the pharmacy is not an art-house. A pharmacy located in a low-income neighbourhood may not flourish when shelves are filled only with expensive branded items.

The password is this: if customers will not pay for the product or service, it is not good enough for the business.

Conclusion

The strategies outlined above are by no means exhaustive. However, they are meant to stimulate change. Success in retail pharmacy business ultimately depends on your definition of success, how much success you want and how much tenacity and faith you are ready to invest.

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