A few weeks ago I sat down with a room full of practice owners and managers to talk about one thing: the veterinary pharmacy. The conversations were passionate, especially when it came to the big play by Chewy recently introducing the Practice Hub, where veterinary practices can now earn a portion of the sale for medications being filled by them.
Several practice managers had concerns about joining Chewy, only to then have them change the terms of revenue sharing down the road. How can practices be sure that they won’t be cut out of the market once clients are converted?
Veterinary practices are now facing the idea of “If you can’t beat ’em, join ’em,” or beefing up their pharmacy strategy to engage more clients. While I certainly don’t have the answer to whether or not Chewy is the right business partner for your practice, I do have several killer ideas for ways you can beef up your pharmacy strategy.
Before we dig into the new strategies, let’s review a couple old standards and kick the tires on them. Are they still working, or should they be sunsetted?
Old pharmacy strategies
1: Telling clients that products sourced online are not supported by manufacturers
Since most manufacturers are now openly selling their products to online vendors, I don’t think this claim works anymore. Back in the day, there was a lot of messaging that fake products were being repackaged to look like real products that could kill your pet. I never saw that happen. It seemed to be more of a fear-based strategy. Then we had a strategy of telling the pet owner that if this medication kills your dog, then you will have to pay for the life-saving measures if you don’t buy the product from us. When you read that out loud, you can really see what a terrible argument that is to persuade pet owners to buy products from you.
My personal opinion: STOP.
2: Charging for handwritten prescriptions
Many practices have success in doing this because it works, but only for the short term. Although totally justified (you don’t have to convince me of how much work it is to review a chart and write a prescription), the message to the client is that you are the bad guy. You, the veterinarian, are charging for a piece of paper simply because you are salty that the client is filling their prescription elsewhere.
My personal opinion: STOP.
3: Raising your service fees
For many years, this has been my strategy—make up the revenue lost to outside pharmacies on things these outside pharmacies can’t do, like sew up a laceration on a Friday night. However, we can only press this so far because we have to deal with access to care for our furry little friends in our community.
My personal opinion: Do some math. Calculate how much you are losing to outside pharmacy sales annually (or make a guesstimate), and figure out how much you need to raise your exam fee (or other fees) to offset that, then decide if it is a good idea. Basically, don’t wing this one.
Now that we have addressed some old ways of retaining your pharmacy, let me share some new strategies with you.
New pharmacy strategies
1: Compete directly by having your own online store
Clients love the convenience of shopping online and having their purchases delivered straight to their front door. If you’re not offering that easy method of prescription-filling, your clients will look elsewhere for it. Compare your available options and see which provider checks the most boxes on your “must-have” list.
A major factor to check when comparing pharmacy providers is your profit margin. Some vendors may charge high fees that eat away at any profit you might make by getting your clients to purchase from your online store. Discuss where to set prices to ensure you make a reasonable profit by providing this service. Some practice managers follow the recommendations outlined by the vendor, whereas others charge more for the same product they offer in-house.
Another great way to keep your clients from straying to other pharmacies is by encouraging them to enroll in autoship. Use this “set it and forget it” feature to make prescription refills easy, and to help clients save money.
2: Focus on the products that matter
When we look at the pharmacy, it makes sense to break it down into four categories:
- Inexpensive acute (cephalexin)
- Inexpensive chronic (pred)
- Expensive acute (Clavamox)
- Expensive chronic (NSAIDs, parasiticides, Apoquel)
Listen, you can’t win all the battles but you should definitely fight for the big dog— the expensive chronic category. Just by narrowing your focus, this will make the counter-attack strategy more manageable. Be on high alert for these products, and ensure your team has the SOP locked and loaded.
Focus on key products, like NSAIDs and parasite preventives, to really sell your online pharmacy to clients.
3: Provide incentives to use your pharmacy
What makes your pharmacy better than others? In addition to your great deals, manufacturer guarantee, and fabulous customer service, offer incentives to clients to encourage them to use your pharmacy. This is the perfect opportunity to incorporate your veterinary loyalty program. For example, for each prescription refill requested through your online store or practice app, you could award a loyalty stamp. People love being rewarded for things they would do anyway, and this practice will further bond them to your pharmacy.
Make sure you take advantage of this for your clients. For example, Lori Anthony, a manager at Family Pet Health Center, discovered that by using her Vetsource special offer from the manufacturer, her clients could save $40 on Apoquel compared to her online competitors.
Another way to encourage clients to use your pharmacy is by offering a discount on necessary lab work that’s associated with the products purchased from you. Offer incentives to buy in bulk, such as:
- Buy 12 months of parasiticides and get a free heartworm test next year
- Buy 180 count of Rimadyl and get $50 off your next lab test
Have a price list handy. It is worth the effort to create a monthly price comparison chart for your team for NSAIDs, parasiticides, and Apoquel showing your in-house price with rebates, your online pharmacy vendor, and a few of your biggest competitors. Without this information, you don’t stand a chance at winning the conversation.
4: Remind clients frequently about prescription refills
It’s all too easy for people to forget you have an online pharmacy if you don’t remind them at every opportunity. With all the other tasks needed to take care of a pet, requesting prescription refills can fall to the wayside until it’s a last-minute emergency, so they turn to a big-box online pharmacy. Instead, remind clients of your own online pharmacy and its convenient autoship feature. Take the time to sign them up before they leave the practice. Point out how much easier it is to have this delivered monthly vs. having to coordinate refills with your practice.
Another good idea is to repurpose your vaccine and exam reminder system to include chronic medications. Create recurring reminders for the products just like you do for a vaccination, then let the system do its magic so the client will receive automated text, app, and email reminders from your practice.
5: Market your online store
Once you’ve set up your online pharmacy, promote it! How will your clients know they can purchase their pet’s prescriptions from a trusted source—you—if you don’t tell them it exists? Design small cards that can be slipped into prescription bags, add a line or two about your online store on receipts, and schedule posts and notifications for social media and your practice app. When clients call to request a prescription refill—or request it through your app—have your CSRs say, “Hey, have you checked out our online pharmacy? Simply request your pet’s meds with a few clicks, we’ll approve the refill request, and they’ll be delivered to your door in a few days!”
Get pet owners excited about your online store by talking it up with every client who purchases a prescription, from chronic medications to parasite preventives.
6: Bonus! Show appreciation for refills
A veterinary client who feels valued and appreciated is more likely to stick with you, so ensure you take the time to show them how much you appreciate their patronage. With all the choices available to them, the fact that they chose your online pharmacy is important and gives you an opportunity to strengthen your relationship. Offer special discounts on services or products, send personalized thank-you cards, or hand out an extra loyalty stamp for a certain number of orders placed through your online pharmacy.
Keeping your clients from straying to another pharmacy can be tough, but you can definitely win the veterinary pharmacy game with a little imagination. For additional accessibility, give your clients the ability to request refills and head to your online store through a practice app. Demo the Vet2Pet platform to find out how it could make your clients’—and your team’s—lives easier.