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The Most Important Factor for Pharmacy Growth

independent pharmacy loyalty

March 31, 2021

Metrics like net worth, gross profit, and prescriptions per day are all important to track, but when it comes to fostering long-term growth for your independent pharmacy, one factor outweighs them all: customer loyalty.

Frederick Reichheld, a Bain Fellow at Bain & Company whose recent book on loyalty was the New York Times bestseller The Ultimate Question 2.0, has spent the last 25 years researching why customer loyalty is so important, and how companies can earn it.

″I recognized many years ago in my work at Bain that the companies that earned the loyalty of their customers were growing faster, were more profitable, their employees liked working there more, and in general, they were winning their competitive battles in ways that would far exceed what you would expect from all the other classic business strategy perspectives,″ Reichheld said.

Reichheld points out Enterprise Rent-A-Car. ″When I asked the founder what the magic was, he pointed out there’s only one way you grow a sustainable business: you treat your customers so that they come back for more and they bring their friends. It’s that simple,″ he said. That philosophy allowed Enterprise to grow from a small service in St. Louis to one of the largest car rental companies in the world, all without having to turn to public sources for funding.

While most small business owners might agree in principle that customer loyalty is important, many still fixate on the hard accounting numbers rather than measuring and cultivating loyalty. But when business owners tap into loyalty, they tap into growth.

What loyalty looks like

When your patients are loyal, your pharmacy reaps benefits. Loyal patients will come back, and they’ll come back more frequently. They might increase their basket size during those frequent visits and be willing to pay more for products and services. And they will likely treat employees ″with a little more thoughtfulness, because they feel like they are part of a community and they expect to be a member for a long time,″ Reichheld said.

But the biggest benefit to loyalty, according to Reichheld, is customer referrals. ″When a customer becomes convinced a supplier, retailer, or pharmacy is special and makes their lives better, they recommend it to their friends. That isn’t just a signal of loyalty, it’s the thing that drives your reputation and your growth,″ he said.

Reichheld warns against mistaking customer retention for loyalty, which are not the same thing. ″Customer retention is a signal they are probably doing something right, but you get a lot of false positives,″ he explained. ″Especially in retail, if your store is the closest, people are going to tend to go there because you have a little monopoly on that real estate.″

But how do you know the difference between retention and loyalty? And how do you measure something as abstract as loyalty? You could keep track of individuals, noting how frequently they come in, how much they buy, or how many people they refer. But collecting information about those trends can be time- and labor-intensive. In his time at Bain, Reichheld developed a simple metric to measure customer loyalty: the Net Promoter Score.

″Net Promoter has grown to become the predominant system in business today,″ Reichheld said. ″Fortune had an article earlier this year that concluded that two-thirds or more of the Fortune 1000 used Net Promoter as their primary customer success statistic. And I see this expanding into small and medium businesses and non-profits.″


The Net Promoter Score

The Net Promoter Score, developed by Reichheld, is a way to quantify your customer loyalty.

Finding out your Net Promoter Score is simple. Just ask your patients how likely they are to recommend your independent pharmacy to a friend on a scale of 0 to 10.

People who give you a 9 or 10 rating are considered promoters. ″They are the people who are the true assets of the business, and they drive your success,″ Reichheld explained.

People who rate your pharmacy with a score of 0 through 6 are considered detractors. Not only will they not share good things about your pharmacy, they could even damage your reputation by spreading negative experiences.

To find your Net Promoter Score, take the results from your survey and plug them into this formula:

% of Promoters – % of Detractors = Net Promoter Score  

Your Net Promoter Score can be anywhere from -100 to 100, and the higher your score is, the more loyal your patients are.


The best time to ask your patients to give feedback is after they’ve made a key transaction at the pharmacy. Although your patients may have an inbox full of survey requests, Reichheld said businesses can distinguish themselves if they only ask two or three questions: ″How likely are you to recommend us to a friend on a scale of 0 through 10? What’s the primary reason? And is there anything else we could have done to make your experience better?″

The first question is a simple rating, and the last two questions are open-ended. The score lets you know if there is a problem, but the open-ended questions let you know what that problem is. Having open-ended questions in addition to the rating can also signal to patients that you are eager to listen to them, which encourages them to take time to fill out the survey instead of deleting it from their inbox. ″When people know that you’re going to take action, I see response rates for those surveys as high as 20, 30, or even 50 percent,” Reichheld said.

Using the net promoter score

Once you have your Net Promoter Score, use it to make your pharmacy better. The score itself is a good indicator, but Reichheld advises paying special attention to those open-ended questions.

The comments have direct advice from your patients about what you do well and where you can improve, so make sure to read them and act on them when you can. This is especially important when you run into a detractor. ″When a customer tells you that you have diminished their life and failed to live up to their expectations, for heaven’s sake, apologize and try and fix it,″ Reichheld said. ″Otherwise, they’re not going to bother filling out more surveys and you’ve diminished your reputation even further.″

One common mistake is tying the Net Promoter Score to a bonus or turning it into a key performance indicator. The main point of the score is to gather the feedback and learn from the feedback. If you do, the score will go up. But if you incentivize your employees to focus on improving their score rather than their performance, your pharmacy might start to feel more like a car dealership. ″If people plead for high scores and game and manipulate, it gets ugly,″ Reichheld said, and you won’t be able to trust the score.

Cultivating loyalty

Capturing loyalty may seem like a tall task, but Reichheld said it’s actually simple: strive to enrich your customers’ lives more than you diminish them. ″When you treat people in a way that enriches their lives, you find ways to be thoughtful and kind and surprising,″ he said.

He cites Amazon as a company that has found ways to enrich its customers’ lives even as the company has grown. With its Prime program, Amazon started with two-day shipping but has continued to add value with services like music and TV streaming, grocery delivery, and responsive customer service when people run into problems. ″Companies with that philosophy—of obsessing over their customers to make their lives better—come up with really creative ways to achieve that.″

On the flip side, you can lose patients’ loyalty if you don’t treat them with respect. ″Don’t make customers feel stupid, or like they can’t trust you. Don’t make them feel like they are a number or transaction, or that you don’t know who they are,″ Reichheld advised. When patients have issues, keep track of those issues and work to correct them.


From the Magazine

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.

More articles from the March 2021 issue:



An Independently Owned Organization Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The member-owned company serves independent pharmacies with group purchasing services, expert contract negotiations, proprietary purchasing tools, distribution services, and more.

An HDA member, PBA Health operates its own NABP-accredited (formerly VAWD) warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.

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