Script Numbers and Customer Numbers.
This week we will be continuing our discussion about Pharmacy performance. Last blog we spoke about Sales and Sales growth. Today, we delve deeper into the key components that ultimately determine sales.
Firstly let us get back to the basics! Total sales are effectively made up of the number of customer multiplied by the average transaction value. So to understand trends in overall sales you need to determine these two key components, average transaction value and customer numbers.
The purpose of any retail store is to attract potential customers into the store, and get them to buy products. Therefore, the key indicators of success are customer numbers (and/or script numbers) and the average transaction value.
Now tracking these two numbers alone can tell you a lot. The trends in these key numbers will tell you how competitive you are in your catchment pool and how well you’re the staff are doing their job. A downward trend in customer numbers tells you your competitors are offering your customers more value than what you are. That should then lead you to ask, what are they doing differently and what should I be doing? Looking at script numbers and customer numbers separately will lead to insight into trends in each area.
Script numbers will tell you about how well your dispensary is doing.
How is your dispensary performing in comparison to the overall store? This will help you identify which areas need more focus, retail or dispensary?
So if customer numbers tells you how competitive you are, average transaction value will tell you how well your staff are doing their job. Essentially average transaction value is the total sales divided by customer numbers. You can either use total sales to customer numbers, total sales to script numbers, or dispensary sales to script numbers. So when the customer comes into the store, it is then up to you and your team to determine their needs and look after them. So if you are still attracting the same number of customers, but they are buying less off you, then your customers are potentially being under-serviced and not being looked after properly by your staff.
Now most of you reading this will think they are logical questions and action should be taken. Yet it surprises me firstly how little these numbers are tracked, and secondly how little is done about it. Get the data, what does it tell you, what do you do about it?
Clients have often told me that pharmacy ownership can be a lonely existence. But you are not alone. Peak Strategies is here to help.
Pharmacy: What you can measure you can manage. Good data results in good decisions.