Fighting Online Pharmacies? Make Love, Not War
Drs. Foster and Smith. 1-800-Petmeds. PetCareRx. The online pharmacy in Australia your clients ask you to match. I see the eyes rolling, hear the sighs of indignation, and understand the cursing that accompanies this discussion with practice owners and managers and trust me, I am frustrated too.
After years of dealing with the entrenched reality of this "problem", I have landed solidly on practices putting aside the feeling of "dealing with online pharmacies", and re-focusing on meeting a need, a demand if you will, that clients have brought to the table. They want their pet medications at a fair price and the convience of online ordering is something most of us cherish.
All we are dealing with here is capitalism at its finest. As Americans in particular grow into caring for pets like humans, big business has pounced as it is apt to do and siezed an opportunity. In retrospect I don't think the majority of us handled it well. Me included.
Many of us became indignant - how dare clients ask us to charge less!! We screamed that the online pharmacies are charlatans that are "stealing" our well deserved revenue! Who knows where the product came from!! Who knows how it is stored!! Let the client know the manufacturer won't warranty the product if they buy on the internet!! As a group we focused mainly on the negatives and scare tactics to persuade and worked to educate clients that the online pharmacies were, and remain to this day, evil.
How many practices took a positive route? Some did. They went to work creating an online store of their own so clients could shop from them instead of a 1-800-Petmeds type entity. It wasn't, and still isn't easy. A third party payment system is usually needed; ahhhh third party companies. That is it's own blog!
It is difficult to keep pricing current in the ever changing online pharmacy landscape. Clients like earning points on other sites and then applying them to future purchases. Some online store solutions take up to 25% of the profit. They promise setting up a platform similar to Petmeds that uses points and coupons, etc. This was another conundrum .... who to go with for your online store set up??
In the end, I tried to see the pharmacy situation as a client. I apply this practice to many facets of management by the way! I like shopping online and do it all the time. I use a particular credit card because I accumulate points for rewards. I look for things for my pets while surfing. If I wasn't in the veterinary industry I sheepishly admit I would be right there ordering on the cheapest pharmacy sight I could find. So, I asked myself, what could change my mind, or convince me to buy from my veterinarian instead?
First, nothing beats the instant gratification of taking home from the vet's office just what my pet needs and starting treatment immediately. Next, I like the fact that I can ask questions on the spot while looking at and holding the product. In the back of my mind at some point I start thinking price. Even if I like taking the product home and fast answers, what could convince to buy during my visit if I think I can get the product cheaper online?
My answer is the veterinary assistant or technician telling me why I should buy the product from my veterinarian, not why I shouldn't buy from an online pharmacy. Defensiveness never comes off well and can make the practice seem desperate and well, pissy. I would want my tech to break the ice and put it out there that she/he knows it's already in my head that I might find the product cheaper online. This is a successful method for discussing pricing anything in the practice. Offer a treatment plan (estimate) so clients don't have to tell you they don't have limitless funds to care for their pet. Why not let them know you're aware of the online pharmacy market and your practice is here to compete?
I would want my tech to assure me that the practice prices pet medications to be competitive with online pharmacies and then tell me the other benefits I might take advantage of if I buy during my visit. What? Cash rebates? Sounds great! What? If my pet becomes ill, won't allow me to the give the medication, spits it out or has an allergic reaction the manufacturer will cover treatment and refund my purchase? I love that! (Yes, please don't tell your clients they are stuck with a purchase they can not use.) What? The practice appreciates my support by donating a dollar of every medication purchase to a local shelter or a pet angel fund in the practice to help less fortunate pet owning families? That's amazing!
Why can't we let clients know we need their pharmacy dollars to continue to offer our progressive services and pay the DVM's and laystaff the way they should be paid? It's the truth. Find creative ways to let them know their dollars count - their pets need what our practices offer.
The tough love moment that has come for many practices is that the industry relied heavily on pharmacy dollars for practice health and frankly the markups on the meds were sometimes outrageous. Human physicians have long been practicing without a pharmacy. I actually remember my doctor's office having a pharmacy inside of it. Patients checked out and paid the bill, then went to the pharmacy counter 10 paces away to get medication. Frankly I think the veterinary industry should be thankful we have any pharmacy left at all.
Many practices reduced prices out of necessity, but didn't really embrace the consumer need and chose to make life difficult by telling a client the practice would not sign off on an online order - they had to come pick up a script. Many practices were coached to the mentality that said if we're going to lose the business, let's get petty and make it hard for the client! Brilliant! The doctor and staff that supposedly love your pet and your business are throwing up barriers because clients have become savvy and oh .... are pummeled daily with constant advertising and marketing; millions and millions of dollars worth. Blue Buffalo anyone??
Ok, I'll check my snarkyness and tell you where I've landed. It's something of a hybrid.
First, price your meds competitively, within $5 of the the most popular pharmacies. For products you have generous rebates for, price them higher but make sure the bottom line price to the client still meets or beats the online price. Will some clients baulk over $1 difference? Yes. Let them have it.
Next, train your staff to know how to search for your cost in your practice management software so they can be front line decision makers when clients ask if you can price match. Yes! Teach them how we as business managers make the decisions we make. Give a threshold. It is the extreme rare occasion that a client can buy something for less than your cost. Choose your "must make" and educate the staff. It might be $10, $20, or a percentage ... if your practice can not make X then that is the occasion you write the script.
Additionally, find a consistent policy for the online script requests that roll in that are using your fax machine's ink. I like this rule of thumb: When the script request comes in do your due diligence and then call the client. If the pet needs to be seen to have the med filled, that's easy. You can have the talk when they come in. If the script is OK to fill, let the client know you would love to fill it and that the practice has it's own online pharmacy and can match the price (as long as matching meets your parameters). Consider offering to go $5 below the internet pharmacy price the first time the client gives the practice's online ordering a try. You might be suprised that many will say yes. If they say no, honor their request.
Finally, create an online pharmacy for internal purposes only. This means being able to order through your own vehicle on behalf on the client. There are choices, I have experience with Henry Schein's My Vet Direct. You keep the revenue, pay your usual cost for the product and pay no other fees, you save the client the trouble of remembering to order online, the product ships to their house. I generally recommend this for products you do not have on hand or are not a solid practice recommendation. For example ...
A practice may recommend Heartgard/Nexgard but a client that just moved to the area does not want to stop using Revolution for their dog. You don't stock Revolution for dogs because it is not your recommendation and you're keeping your pharmacy in good financial shape not stocking every prevention under the sun :-) You tell the client that though you don't stock Revolution, you can place the order through your onlilne pharmacy and have it shipped to their home right away. You provide amazing client care, the product they want, and you keep dollars that would have been lost if they left with a script. Brilliant!!
Just as I feel phone shoppers should be embraced, so should the price matchers. Work with them, not against them. Let them know we're doing all we can to be competitive and continue to offer progressive technology, longer hours, more services, and excellent staff that provide the experience they keep coming back for.
There will no doubt be counter arguments and steadfast opinons to my ideas, but I have found more successes than failures with this hybrid approach.