Like most small businesses, LTC pharmacies must spread resources between serving existing customers and finding new ones. The prospect of losing a major customer when you’re not investing in finding new ones should keep you up at night.
The challenge is to find the time and resources to manage a marketing program while continuing to fully serve existing clients. Allocating a marketing budget will help.
A Look at Your Pharmacy’s Market
Have you taken time for a deep look at your competitors and potential new customers? If not, you’ll probably be surprised to see how many new LTC pharmacies have opened and how many potential new customers are within your service area. A review of my own tracking of pharmacies that now have taxonomy codes associated with LTC shows a steady increase. The institutional LTC market is expanding, with nursing homes growing at 3.4% per year and assisted living at about 5.5%.
LTC pharmacy is a local business. If your pharmacy is in Maine, you don’t worry about finding customers in Hawaii. This fact focuses your marketing efforts on channels that target local customers. You may conclude that your market focus should be SNFs and ALFs within a 100-mile radius.
How Business Customers Shop
In addition to being local, you’re also in a business-to-business (B2B) model, and most of your prospective customers begin their search for vendors online. If they access a search engine (Google®) and type “LTC pharmacies near me,” will your pharmacy’s website appear near the top of the search engine results page (SERP)? Which pharmacies do?
Next, remember that although the process may begin online, signing a new pharmacy isn’t an online transaction. This partnership represents a high-stakes commitment that won’t happen until you meet and persuade the administrator that you are the best option for the job. Your marketing’s objective is to get a face-to-face meeting.
Now that you have identified your market and your objective, consider the budget. Budgets are frequently defined as a percentage of revenue. The expert advice on this is mixed. The average recommendation is to budget 2.5% to 5% of total revenue on marketing. If you’re relatively new or unknown, you might want to aim higher, say 8%. A quick way to tell where you are is to check your position on the SERP in answer to the question above. If you’re not on page one, you probably need to invest toward the higher end.
What Should Your Pharmacy’s Marketing Budget Include?
Under this B2B local marketing approach, your objective is to make a live sales presentation to a prospective customer within your service area. A well-designed and optimized website is the hub of all your online marketing efforts and will pay dividends as you reach out to prospective clients.
From there, you can create email marketing campaigns that feature white papers and an email newsletter that helps establish you as a thought leader.
It’s also worthwhile to experiment with direct mail marketing. The beauty of direct mail is your target audience has to handle it and at least look at it. They can ignore your online efforts, but direct mail is more likely to gain attention.
Other options include buying exhibits at events your potential customers will attend. You can also invite prospective customers to join tours you host for local political leaders. Giving them the opportunity to rub shoulders with state, local, and federal politicians demonstrates your high level of engagement and is a great chance to begin that conversation you are working toward.
Is Marketing Your Pharmacy Worth It?
Unless you have a long wait list of new customers clamoring for your services, you need to engage in marketing. The payoff is not normally immediate – it can take several months to see the fruits of your investment, but persistence pays off. If you’re consistently in front of your next customers, they will give you a chance to earn their business. That’s a winning end game.
X Factors for Building a Marketing Budget
- Create your benchmark – see where you appear in search engine results and where your competitors appear.
- Research your competitors (Strengths? Weaknesses?). Discover who your prospective customers are (New assisted living facility breaking ground? SNF 20 miles further than your current service area?)
- Polish your website and begin marketing. Even if you start small, keep at it. Consistency and persistence pay off.