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Market Segmentation Sounds Boring. But Here’s How You Can Use It to Improve Pharmacy Marketing

Market Segmentation Sounds Boring. But Here’s How You Can Use It to Improve Pharmacy Marketing by Elements magazine | pbahealth.com


May 17, 2018


Inside: Use market segmentation to find and promote to your best potential patients. You can drastically improve your independent pharmacy marketing by segmenting your market.

You know your patients’ individual needs and their health concerns. And, as an independent community pharmacy, you probably even know them by name.

But how often have you dived deep into the data to find out who your patients are as a whole?

Understanding these key details about your pharmacy’s market can help you improve your marketing strategies and grow your business. It can also help you differentiate your pharmacy, so you can set it apart from the competition.

And the best way to do that is through market segmentation.

What is Market Segmentation?

Market segmentation is a fancy word that marketers use to describe splitting your customers into target groups.

“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,” said Lonny Kocina, Founder of Media Relations Agency, a publicity company, and author of the book, The CEO’s Guide to Marketing.

While market segmentation typically includes segmenting by specific factors like demographics and location, you can use numerous variables to segment your market.

“Segmentation variables can be literally any characteristic that makes one group different from another,” Kocina said. “As an extreme example, a submarket could consist of blonde 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.”

You could also segment a market in just two general variables, such as all females between ages 20 and 30, he said.

Why Should Market Segmentation Matter to Your Independent Pharmacy?

The point of market segmentation is to better identify and market to your best patients.

“Certain groups of people make much better customers than others,” 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.”

With this knowledge, you can provide more relevant information to your patients and better market to your potential patients. For example, if you know your area has a high percentage of diabetes patients, you can market your diabetes services to them.

“This enables the customer to feel like you are speaking directly to them and their needs,” said Kevin Tash, CEO of Tack Media, a digital marketing agency that specializes in pharmacy marketing. “This increases their ability to build a rapport and engage with your pharmacy more. And, you build more loyalty.”

5 Easy Ways to Segment Your Pharmacy’s Market

You can segment your pharmacy’s market by tons of factors but start with these five to get results faster.

1. Location

Segmenting your pharmacy’s market by proximity to your pharmacy’s location is key.

“Customers who live close by are simply more likely to take advantage of a promotional offer than customers who live further away and may have easy access to your competitors,” Kocina said.

And you can use the information to better promote your pharmacy’s services.

“This is valuable if the pharmacy services nursing homes or does a lot of delivery,” said Christopher K. Lee, MPH, CPHQ, a healthcare business consultant. “Pharmacy owners who have implemented med sync can take advantage of this most.”

2. Demographics

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,” Lee said.

Homing in on these similarities through demographics can help you better understand and market your pharmacy to your current and potential patients.

Demographics include factors like:

 

3. Psychographics

Psychographics look at how people think. For example, “Rock musicians think differently than librarians,” Kocina said.

Looking at psychographics allows you to dig even deeper into what drives your patients and what might drive potential patients to use your pharmacy.

Psychographics include factors like:

 

And the way your patients shop and behave can depend on not only their current lifestyle but their desired lifestyle. Their interests, activities, hobbies, opinions, and values can indicate their desired lifestyle.

4. Behavior

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 community pharmacies need to understand their patients’ behavior both as it relates to prescriptions and retail shopping.

Factors to consider:

 

5. Payers

Independent pharmacies have a unique way to segment their market.

You can segment based on how patients pay. Look at who your Medicare patients are, who your Medicaid patients are, what private insurance your patients use, and cash-paying patients.

You can even learn which insurance plans provide the best reimbursement rates for your pharmacy and focus on marketing to those patients. Partner with a pharmacy services administration organization (PSAO) to more easily identify your pharmacy’s best insurance plans.

“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.

So, How Do You Segment Your Market?

You’ll need technology to help you analyze data about your market.

“It becomes harder to track it if you don’t have a tool like an email marketing platform to add it to,” Tash said. “It’s important to have a technology that helps you funnel this information in the moment. Also, some customers might fall in a generic category or change interest over time, and that gets lost in the mix.”

You can also use your pharmacy’s point-of-sale (POS) data, data from your loyalty rewards program, and prescription data from your pharmacy software provider to gain insights.

“It’s important to create a list of your top three types of customers,” Tash said. “And to collect email data and to train the team to add to this list on a daily basis, no matter how busy you get. This needs to become a habit.”

And, create a pharmacy marketing plan to communicate with those patients. So, you’re not only gathering data. But using it.

Now you can use market segmentation as a tool to grow your pharmacy business.


 

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