Why Some Reward Programs Don't Work

It seems like almost everyone has a reward program these days. What used to be a way to separate yourself from the competition has become more of a nuisance for customers. Heck you can’t buy a donut these days without someone trying to shove a reward program down your throat. If you buy 10 donuts, you get the 11th one free. Who cares? Can’t I just buy a donut? What started out as a great idea is a reason some businesses are losing customers right now.

Here are some things SHB Consultants is seeing with reward cards in general that just make them pointless at times.

• One more card to carry in your wallet/purse. Like the world needs more paper or plastic.

• Constantly being beat up at every store you go to with “Are you a member of our rewards program? Would you like to be?” Not only do they ask this question once but many ask multiple times. It borders on harassment. Can’t I just buy something and then the clerk thank me for my business?

• Having to pay money to be a member of your rewards program so I can now be called a valued customer. That makes no sense. If I give you hundreds of dollars in business, shouldn’t I already be considered a “valued customer”? Why do I have to pay you to get that ranking?

• Our rewards members get discounts. Why not charge everyone the same price? That’s just irritating. Are you telling me you have been overcharging me this entire time? Customers are tired of trying to figure out the real price of items/services. Are there no honest legitimate businesses anymore?

• Setting odd parameters on your reward members. For example: GNC demands their Reward Members purchase items before the 7th day of the month to get the discounted price. Thus, they are overcharging their “valued customers” the other 23 days of the month. I hope the person who came up with that idea gets fired. That is terrible.

• Getting your customers to fill out their information again if they haven’t been there for 3 months. Ulta has this rewards program. I guarantee they have people’s information on file. Yet, they demand you fill it out again. Great! More paperwork. Just what every customer wants. No thanks!

• Making the customer bring in the rewards card in order to get the discount. That is just crazy.

What’s wrong with the above programs? They all make the customer jump through hoops. We are in a recession. Doesn’t it make more sense that the business should be the one jumping thru hoops? However, it is obvious that some businesses didn’t get that memo. During a recession it is vital that you do everything you can to win customers over and keep them coming back. You can do this by making things simpler for your customers. The more complicated the rewards program or the more work the customer has to do, the more likely they will run screaming from your store.

We aren’t saying that all rewards programs are bad. However, think about it this way. The overall objective of a rewards program is to get customers to return to your pharmacy. So, figure out a way to get them to return but don’t put a lot of expectations on the customer. Make doing business with you as simple as possible.

Keep-Your-PharmacyOpen challenges you to evaluate your rewards program if you have one in place. Don’t ask the company who sold you the program for advice. They aren’t going to tell you what you need to know. Ask your customers what they think. Then modify the program (or drop it if necessary) to take care of your customer’s needs.

If you would like to discuss this topic further, give us a call (800)603-2519. We would be happy to visit with you on this hot topic.

You Know Your Pharmacy is in Trouble When . . . .

• You are on COD with primary supplier (or you have had to change suppliers)

• You have agreed to onerous payment plans on past due balances

• You have no sources for working capital financing

• You are using personal and business credit cards to meet obligations

• You sweat meeting payrolls

• You cannot sustain your standard of living

• You can only partially fill a large number of Rxs

• You are inundated with creditor calls

BUT DO YOU HAVE THE GUTS TO CHANGE THE CIRCUMSTANCES?

Keep Your Pharmacy Open, Inc. is all about changing the equation.

Its management has successfully turned around troubled pharmacies

with revenues exceeding over $300 million.

Keep Your Pharmacy Open will:

Handle all creditor issues

Manage your payables

Restructure onerous debt

Analyze all operating expenses

Use its best efforts to secure working capital financing

Give you and your employees greater peace of mind

Visit www.keep-your-pharmacyopen.com or call Michael Busch at (800) 603-2519 to find out how we can change your situation.

Keep Your Pharmacy Open, Inc. is a not for profit corporation.

How to Stop Losing Money on Bad Customers

Do you have those customers who take up a lot of your time? They come in, spend a little money and then complain, complain, complain. It’s frustrating. As a pharmacist you feel obligated to take care of them, don’t you? As a business owner, that is the worst thing you can do. News flash, it is not your responsibility to take care of every person who walks in the door. If you can’t keep your pharmacy open, someone else will be taking care of these patients. With that in mind, let’s look at things from a different perspective.

How much is your time worth? Take your salary and divide it by the number of hours you work. What is your hourly rate? Now, take a look at how much money that patient spends in your pharmacy? How much extra time do you spend with them? Are there other things you could be doing instead of talking to them? Are they really worth keeping around?

Sure, I know you want business. Who doesn’t? However it is vital that you understand that you are losing money on this patient. Keeping them as a customer is a poor business decision. It is time to “FIRE” this client and every client just like them. Trust me, you will feel liberated when you do so.

There is a chain not far away from you who is always looking for new customers. Why not send the customers you are losing money on to the chain and concentrate on bringing more ideal customers into your store.

You need to understand that increasing the number of customers is not your top priority. Your goal is to have the ideal patient (you defined in our last blog post) come in to your pharmacy and spend a significant amount of money on a consistent basis. Isn’t that what you really need? So, why are you hanging onto the wrong customers?

We challenge you to fire your bad patients. The next time they complain say something like, “I am so sorry we can’t help you. Have you tried ________ chain pharmacy down the street? I think they will be a better fit for your needs.”

Once you fire your first one, come back to this blog post and let us know how it went. If you need help or advice on this topic call (800)603-2519. We will be happy to offer you one free session for being a faithful reader to the Keep Your Pharmacy Open blog.