July 16, 2019
Inside: Find the right niche to stand out from the crowd and create a reliable profit stream.
Pull away from the pharmacy herd by building a unique and specialized offering at your community pharmacy. Establishing a niche can take all kinds of forms, big or small. Some profitable niche services include compounding, serving animal patients with veterinary medicine, and offering popular immunizations, like travel vaccines.
But don’t just add one of these services and expect success. Instead lean into the things you already excel at so you can make a niche service into a cornerstone of your pharmacy.
Here are some things to think about when choosing a niche that will make your pharmacy more profitable.
When determining what niche to carve out, your first consideration should be your existing patients.
It might be tempting to offer a flashy new service that will be easy to advertise. But if you spend time and money implementing a veterinary medicine program and your city doesn’t have a large population of pet owners, for example, it doesn’t matter how good Fido looks on your marketing materials. The program will be a bust.
Instead of trying something completely new, work to meet a need that’s currently unmet for the patients you already have. A medication adherence program might not be the most glamorous, but it could make a big difference in improving patients’ well-being.
Consider the parts of your business that are already doing well and expand upon them. If you serve a large population of diabetic patients, go the extra mile to offer more comprehensive diabetes care. This means that the patients who are already coming into your pharmacy will start spending more.
Being the David to the big chain pharmacies’ Goliath can feel like a constant struggle, but independents do have some advantages over their larger rivals.
Independents can offer specialty services that are completely out of reach for national chains.
Adding a compounding service to your pharmacy not only means you’ll be gaining another revenue stream, but it also means you are offering something to patients that Walgreens or CVS never will.
Because you are working on the ground in your community, as an independent pharmacist, you have a better understanding of what specialty services your patients need.
Sure, both you and the Walmart pharmacy down the street offer flu shots. But corporate giants don’t have the same capacity to work with other local organizations.
Work with a local optometrist to provide eye health screenings in the pharmacy, or partner with a fitness center to provide health education classes. These community-oriented services will give new patients a reason to come to your pharmacy instead of the chain next door.
As important as it is to know what your community needs, it’s also crucial to pay attention to the industry as a whole—especially in a fast-changing and ever-evolving environment like pharmacy.
It’s better to be an early adopter to a new niche pharmacy service than the last one to jump on the bandwagon. By being the first to introduce a new service to your community, you gain a competitive advantage against other pharmacies in the area.
To keep your finger on the pulse, attend continuing education classes. CE sessions will get you out of your bubble and give you an idea of what’s happening not just in your area but in pharmacies across the country.
Attending local networking events can also keep you on the cutting edge. Hearing from your peers will give you ideas for profitable niches that could fit your pharmacy.
It doesn’t matter how trendy or cutting edge your new service is—if it doesn’t have the capacity to raise your pharmacy’s revenue, it’s not going to last, and it could become a financial blow.
Before adding a new service, take a hard look at your finances to see if you can afford the initial investment. Even small changes to your pharmacy can cost you.
When you introduce your niche service, think long and hard about pricing. It’s helpful to take a look at what other pharmacies are charging for similar services. You should also do the math to determine how long it will take you to make a profit with the service at different price points.
Some experts advise pricing services higher than you think you should when you start out. If the price ends up being too high, it’s easy to lower them and get your patients excited about a deal. But if it’s priced too low to begin with, raising the price is a much tougher pill to swallow for consumers.
Letting patients know about your new niche service is key to its success—and it’s key to widening your revenue streams in the long run.
Create unique branding for your service so it stands out for patients who come into your pharmacy frequently and prompts them to ask questions.
Build up excitement by inviting members of your loyalty program to try out the new service before it becomes officially available to the public. Use every avenue available to get the word out—email marketing, social media, and direct mail. For the first week after you introduce a niche service, offer it at an enticing discounted rate to encourage people to try it out.
Then, after your service has gotten off the ground, share testimonials from happy patients who have already taken advantage of it.
Remember, your niche service can’t succeed if nobody knows it exists.
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The company is an independently owned pharmacy services organization based in Kansas City, Mo., that serves independent pharmacies with group purchasing services, expert contract negotiations, distribution services, and more.
PBA Health, an HDA member, operates its own VAWD-certified warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.
Want more pharmacy business tips and advice? Sign up for our e-newsletter.