Profitability is vital to the success of any business and pharmacies are no exception. Introducing professional services to your pharmacy can be a great way to increase the profits while enhancing customer loyalty by expanding the range of offerings you provide. But how do you ensure your new service is going to be profitable? This question was addressed by MSI Taylor’s partner Matthew Harris and Samantha Kourtis from Capital Chemist Charnwood at the Pharmacy Business Network event in September 2015.
To ensure your professional service will be profitable, you need to understand the cost of providing the service. A simple formula to use is to look at the sunk costs, i.e. those fixed costs which have to be covered regardless of the service provided, and add the direct costs involved in providing the service. You then know how much you need to charge to cover the cost of the service. But this still doesn’t determine the price customers are willing to pay. It’s important to consider what your objectives are in providing the service as well as what customers are willing to pay. Focus on the outcomes customers will achieve as a result of purchasing your service to help determine what the value may be.
Finally, it’s important to ensure you have the systems and procedures in place for staff to both promote and provide the service. There’s no point making a service available if staff don’t know about it or feel comfortable recommending it to customers. Staff also need to be trained to ensure the service is delivered in a consistent manner.