Lifetime Value [1 of 2] – Understanding Lifetime Value: Why your pharmacy’s customers are worth more than their first or second transaction
If someone walks into your pharmacy, what are they worth? At that very moment, probably just the new prescription in their hand.
But if you take into account future refills and a prescription transfer or two, you’ll immediately see the possibilities beyond the initial transaction, right?
Imagine owning a pharmacy where customers buy from you only once; where your entire business relies on single transactions and a constant inflow of new one-time flings. How big…actually, how small would your business be?
Once you get someone in the door to try your business, the 1st and and 2nd transactions are pretty easy to make. But the 10th, 11th, 12th, and 13th transactions are the true tests of your pharmacy’s reliability, and often times you only start making real money at this point.
This post is the first in a series of discussions about the fundamentals of your pharmacy marketing strategy, and it will prepare you to share pharmacy expertise and services in the right order with your customers so they will make more informed buying decisions, and buy more frequently from you.
No matter where you are in your business, it’s worth sitting down for a few minutes and considering your customer lifetime value, the total sales you estimate will result over the life of your business relationship with a customer.
Consider the following questions about your business:
- Do you know exactly how much it costs to acquire a new client?
- Do you know how much you make from them over a year?
- Do you know how much they buy every time they come in?
- Do you know how much it costs you when they leave?
If you can answer yes, you’re doing great. If you can’t, this blog series is just for you, because once you start thinking about these kinds of questions, you gain clarity and making decisions in your business gets easier.
Would you like to know how much it costs to acquire a new client? Would you like to know how to structure your marketing?
What we do at PDS is help you reduce the learning curve and collapse time so that you can spend the next 6 months to a year figuring this out as a part of a community, rather than spending the next 3-4 years doing it yourself.
Stay tuned for the next part in this series this week, “Not All Customers Are Created Equal,” where we will discuss how to calculate lifetime value, increase that value, and identify profitable customer groups on whom to focus your efforts.
