Page 41 - Retail Pharmacy Magazine October 2020

As the battle for the customer’s share of wallet becomes even more competitive and the shopping behaviour of consumers continues to change due to Covid-related pressures – including increased digital integration – pharmacies should have a way to communicate with their customers to both engage with them and influence their behaviour. Logically, the most vital customers to address are the high- value and loyal customers, while new customer acquisition remains important for maintaining and growing as a business. A report by retail intelligence company IRI Worldwide1 on ‘The omnichannel journey’ indicates that “even the most loyal customers pose significant upside potential for retailers”, making it clear that understanding your customers, Diagram 1. McKinsey’s Consumer Insights Pulse Survey: showing the expected growth in online purchases after COVID-19. Diagram 2. McKinsey’s Consumer Insights Pulse Survey: showing the importance of digital channels in influencing shopping RETAIL PHARMACY • OCT 2020 CPD ACTIVITY 39 WHAT’S THE REWARD FROM LOYALTY? 1 CPD CREDIT Shannon Kerr MBA As a marketer and project manager with more than 20 years’ experience, Shannon has focused on the community-pharmacy space for the past 10 years. Shannon’s experience encompasses branding, digital marketing, loyalty programs, above the line and retail marketing. Her project skills enable a coherent and integrated message across all elements of pharmacy marketing. Shannon Kerr works at instigo. For the purposes of full disclosure, instigo has a commercial relationship with the Pharmacy Guild of Australia to deliver the Health Advice Plus program into community pharmacy. Instigo also provides a range of business services to API including some marketing services, professional services coaching for Soul Pattinson and Pharmacist Advice stores and outsourced merchandising resources for Soul Pattinson, Pharmacist Advice and Club Premium. their shopping and loyalty behaviour is a key strategy in community pharmacy to maximise the return from each customer. McKinsey’s Consumer Insights Pulse Survey2 shows the Australian population consuming more digital media, using more online services and doing more online shopping than ever before. Interestingly, there are quite clear shifts in the age segments that have previously been hardest to convert, in certain older demographics. This obviously has implications for pharmacy, where the effects of this rapid adoption will bring the digital strategies of many businesses to the fore. Being able to maintain a dialogue and communicate with customers through this period of change is essential. The IRI Worldwide omnichannel report indicates that retailers should follow four basic steps to maximise the value of each customer and capture share. The approach is based on the widely supported theory that acquiring new customers is more expensive than retaining existing customers Harvard Business Review’s3 assessment of available research suggests that the costs of customer acquisition are from five to 25 times more expensive than customer retention). The four basic customer-value maximisation steps are: 1. Rewarding current customers. 2. Growing current customer numbers. 3. Activating new shoppers. 4. Reactivating customers that have lapsed. Werner Reinartz and V. Kumar4, renowned marketing academics, outline the following customer marketing approach: “When building relationships, it’s important to build the right relationships TO PAGE 40 LEARNING OBJECTIVES After completing this CPD activity, pharmacists should be able to: • Explainthevalueofaloyalty rewards program for retail. • Incorporatetheessentialsteps to implement an effective loyalty program in your pharmacy business plan. • Determinethekeypharmacy customers that need to be communicated to and retained. 2016 Competency Standards: 4.4. Accreditation Number: A2010RP4 (Exp. 30/09/2022).