December 20, 2019
Imagine you’re shopping for a pair of shoes. There’s a bargain bin piled high with every type and size—baby shoes, work boots, beach waders, high heels. You came into the store looking for a specific kind of shoe for a specific occasion. Would you blindly stick your hand into the bin and buy the first pair you happened to pull out?
Unfortunately, many independent pharmacies use a bargain-bin approach to their marketing strategy—sending out postcards, emails, and promotions without any regard for who’s receiving them and what content would best serve, and entice, those particular people.
“Without having a specific market in mind, you are targeting everyone, which means you are targeting no one,” said Islin Munisteri, vice president of sales and marketing at Theia Marketing. “It’s important for local businesses such as independent pharmacies to know the best part of the market that they serve.”
To find the shoe that fits your patients, so to speak, there’s a strategy called market segmentation, which simply means splitting your customers into specific target groups. Although market segmentation is often driven by demographic factors like age, income, and gender, there are almost no limitations to how you can divvy up your market.
“Segmentation variables can be literally any characteristic that makes one group different from another,” said Lonny Kocina, founder of the publicity company Media Relations Agency and author of The CEO’s Guide to Marketing. “As an extreme example, a submarket could consist of blond men between the ages of 30 and 40 who have won a spelling bee, own a red Chevy, love to eat olives, and have mothers named Kathy.”
By segmenting, you can speak more directly and specifically to people’s needs, which makes them more likely to want what you offer, said Kevin Tash, CEO of the digital marketing agency Tack Media. “This increases their ability to build a rapport and engage with your pharmacy more,” he said. “And you build more loyalty.”
It also enables you to identify your best patients so you can tailor your marketing to get more from them. “Certain groups of people make much better customers than others. When groups of people are singled out for special promotions, that’s called ‘target marketing,’ and it can be a very profitable strategy if done right,” Kocina said. “Take women for instance. In the healthcare industry, women are a much more sought-after group than men. That’s because when it comes to health care, women not only make decisions for themselves, they frequently make them for the men in their lives.”
The greatest difficulty of segmentation is finding the data. How do you identify moms of young children for when you send back-to-school postcards and emails? How can you spot bargain buyers so you can get them in your store with coupons?
The first step is to start with what you have. Although segmentation can help you reach prospects who have never been to your pharmacy, it’s most effective for dialing in on current customers. Find helpful data using your point-of-sale system, loyalty rewards program, patient health files, and surveys. You can also use customer relationship management (CRM) tools to track customer information. From those sources, you should gain enough information to segment based on virtually any relevant criteria.
To discover data on new prospects in your community, you’ll need to do research using public sources, local connections, and the internet. For demographic information, you can search the U.S. Census Bureau’s American Fact Finder, the U.S. Bureau of Labor Statistics, and the Bureau of Economic Analysis. Munisteri suggests using the U.S. Postal Service, IRS, Google Ads, and Facebook Ads.
What you’re able to do with this general information on prospects will be limited—segments will inevitably be broader and based on location. For example, you may find that a certain zip code has a large population of millennials but you won’t be able to identify which addresses exactly. So your mailers will focus on selling specifically to millennials in that zip code even though they will also be received by people outside that segment. That’s okay. You will still be narrowing your messaging to your primary targets and will therefore be more effective in reaching those prospects. And you can follow up that campaign with another one focused on the next largest segment in the same area.
Once you’ve segmented your patients, the next step is developing marketing campaigns focused on the specific needs of those segments. “For example, you might be targeting seniors age 50 to 64 with a household income of greater than $60,000 a year,” Munisteri said. “You can create specific marketing materials such as flyers or white papers for that segment of the population you serve. You can also get them on your email list and further nurture the relationship so that you’re top of mind when they’re ready to refill their prescription.”
If you segment diabetes patients, you can focus the campaign on your weight loss program, your seminars on managing insulin, or your large selection of glucose meters. For a segment of patients in lower income brackets, you can focus on coupon promotions to get them in your store. For patients over the age of 65, you can send postcards on your medication synchronization or home medical equipment. For a segment of natural shoppers, you can promote your high-end nutraceuticals and herbal remedies.
Your unique approach will depend on your unique prospects. The key is to fit your marketing content to their particular needs. If the shoe fits, they’ll buy it.
Where people live affects where they shop, especially when it comes to pharmacies. “Customers who live close by are simply more likely to take advantage of a promotional offer than customers who live farther away and may have easy access to your competitors,” Kocina said. More distant prospects may need extra motivation to make the trek to your pharmacy, which means they should receive more enticing promotions than prospects in your zip code.
Even though each of your patients is a distinct individual, they likely have similar characteristics or habits. “Children have different needs from seniors. Women may respond to marketing differently from men. Individuals from different ethnic groups may value different patient engagement approaches,” said Christopher K. Lee, MPH, CPHQ, a healthcare business consultant.
Demographic factors include:
Psychographics delineates people based on various psychological criteria. Looking at psychographics allows you to dig even deeper into what drives your patients and what might motivate prospects to use your pharmacy.
Psychographic factors include:
Determining patients’ behaviors can reveal their attitudes toward a product, their frequency of use of a product, their brand loyalty, their familiarity with the brand, and more. Independent pharmacies need to understand their patients’ behavior both as it relates to prescriptions and retail shopping.
Behavioral factors include:
Pharmacies can segment based on how patients pay, whether it’s through Medicare, Medicaid, private insurance, or cash.
“Even among Medicare Part D payers, there may be different programs or coverage determinations that may influence how a pharmacy targets those patients,” Lee said. You can even learn which insurance plans provide the best reimbursement rates for your pharmacy and focus on marketing to those patients.
This article was published in our quarterly print magazine, which covers relevant topics in greater depth featuring leading experts in the industry. Subscribe to receive the quarterly print issue in your mailbox. All registered independent pharmacies in the U.S. are eligible to receive a free subscription.
Read more articles from the December issue:
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