Is it about time your pharmacy makes some changes? Learn what you need to ask yourself to help determine if the status quo is just "ok"
5 easy pricing strategies for independent pharmacy
Independent pharmacy retail pricing strategies to make your more profit! Using a robust POS technology makes it easier!
A few days ago, I ran across an article warning consumers about tricks retailers use to influence purchasing decisions. I have to say that from the very first paragraph, this article raised my blood pressure a little bit. After all, retailers are generally in business to be profitable, not to act as charitable organizations. So what’s wrong with some good retail pricing strategy to boost your average ticket and increase your overall sales? You guessed it, absolutely nothing.
At the end of the day, no matter how aware we may be of “pricing psychology”, our primary instinct is going to counteract that awareness and most of us will probably take advantage of that “2 for 1” or “10 for $10” deal. After setting the weekly sales in my years of working retail, I’m generally the first to point out that the “Buy One Get One” sale is really just 50% off overall, but knowing that doesn’t generally change my purchasing decision. So let’s take some of these examples of “Buyer Beware” and turn them into 5 rules for strategic pricing for independent pharmacy.
1) Everybody Likes Free Stuff. Yes, I can hear my mother’s voice in my head telling me that nothing in life is ever truly free, but the simple truth of the matter is that consumers like to be rewarded. The coffee stand I visit most mornings issues a card that tracks my purchases. For every 10 coffees I buy, I get one free. I know that I still had to buy 10 cups of coffee to get that free one but let’s face it, with or without that free coffee, I’m going to get my caffeine fix somewhere and that incentive is part of what keeps me loyal to that particular coffee stand. For independent pharmacy, a good Loyalty Program can have the same impact. Dollar rewards, or free incentives paired with the purchase of an item you’d like to drive sales on, is good for you and makes your customer feel good about their purchases.
2) 10 for $10. One of the great things about this promotion is that it really doesn’t have
to be that big of a discount for consumers to want to take advantage of it. In the grocery store, I frequently see this on cans of soup or yogurt. It might be just 10 or 20 cents off per container, but my brain says it’s a great deal, so I’ll take advantage of it to the fullest extent. As $1.00 per item may not always be a reasonable price point for many items in a pharmacy setting, you can alter this same tactic to your advantage by setting it as a 5 for $10, 2 for $20 etc. As long as the consumer sees it as a deal on the regular price, you’ll probably see some success with it.
3) Impose limitations. Limitations create a sense of urgency for the customer and it’s likely they won’t even realize it. Limit the amount of a certain sale item that each customer can purchase and you'll increase the chance they'll buy in higher multiples than they were planning on. It’s also a great way to make sure that you don’t run out of an item that’s on special promotion. You can also consider combining this strategy with your 10 for $10 type deals to increase the likelihood that customers will buy 10 of those sale items instead of 5.
4) Numbers Psychology. Most pricing strategies already reflect this rule. Whether it’s a bottle of allergy medication priced at $9.99 or a car priced at $9,999.95, consumers will be more accepting of that number as a good deal vs. $10.00 or $10,0000. The first number in your pricing strategy will be what sticks in the customer’s brain. If you’ve ever gone to the grocery store and wondered how the total got so high, this pricing strategy probably had something to do with it. Check out your current prices and see how many of them match up to this stragegy.
5) Keep it simple. Customers are often in a hurry and don’t want to take the time to calculate complicated discounts. A quick $2.00 off is probably better than an odd percentage like 15% or even 25%. Even if it’s the same amount, the easier pricing is for your customers to figure out, the more likely they’ll be to make the purchase. Features within your POS system can help you set the discount and even print signs and shelf talkers to promote the sale.
I hope that these tips help you turn “Buyer Beware” into some increased revenue. I’d love to hear how pricing strategies work for you and what other approaches have been successful in your pharmacy. Please leave your comments below.