It is obvious why we should determine a marketing budget, yet few people do it, especially in small business. Why is it so important?

First, if you put a budget together, it will force you to plan in advance which marketing activities you should implement. Now remember, this is a guide because we certainly don’t want to continue to do activities that don’t work.

Which brings us to the second reason to have a budget in place – This will allow you to better track which activities are most effective. I have no problem with supporting the local soccer team or girl scout troop, but often times we are spending more in these categories than we realize and a change in allocation may be called for. A large yellow pages ad may have been effective in the past, but times are changing and the amount you allocate to this should probably change as well.

It is interesting to note that people who have been marketing for a long time tend to spend more money than people who are new to marketing. Why? Because done right, it makes a big difference.

So how much should you allocate to marketing? It depends on the size of your pharmacy. A smaller pharmacy may need to allocate a larger percentage, say around 2 to 21/2% of your gross sales, than a larger store will. You folks with larger pharmacies, say over $5milion in gross sales, may only need to spend about 1 ½% on marketing. Whatever you designate, will need to match your goals. Bigger growth will require bigger dollars.

What kinds of things go into your marketing budget?

Pharmacy association memberships
Charitable contributions
Directory listings
Advertising – newspaper, radio, TV, flyers
Promotional products – Direct mail, premiums
Web and internet including social networking

And in the case of opening a new pharmacy, we need to plan in our budget for your grand opening.

So, back to Liz’s Apothecary. Let’s start my budget worksheet:

Using gross sales numbers from past history and having set a goal of increasing my sales by 10% in the first year, I have decided to designate 21/2% to marketing. Of that 2% will go into my first year of operation and the ½% will be spent on Grand Opening activities.

Before we take a look at Grand Opening Activities, I want to discuss one last vital marketing tool that needs to be in place before you open your door.
Remember, you have your excellent staff in place, your store looks great, you know who you are,but a component that is just as critical needs to be ready as well: YOUR WEBSITE.

So you have purchased your new pharmacy, hired your staff and filled your shelves. Now how are we going to get people in the door?

Most people tend to use a scatter approach to marketing. Maybe they throw an ad in the local newspaper or some spots on their favorite radio station (because if I listen to it then everybody does, right?) . Or maybe they buy a big ad in the yellow pages. And then nothing happens. Hey, you spent money and time on this, now why doesn’t it work?

Because you didn’t do the heavy lifting that has to happen before you can ever hope to market successfully. And it starts with figuring out who you are or in marketing speak – WHAT IS YOUR BRAND.

So, what is a brand?

David Ogilvy, famed marketing and advertising guru, defined brand as “the consumer’s idea of a product”. If we define it further, a brand is the definition of who you are and how you are different from your competitors. If done right, a brand will add value to your company. And once defined, your brand should appear in everything you do, from the appearance of your store to the actions of your employees to the marketing messages that you send to customers.

Why is a brand so important?

First of all, it allows you to communicate to your employees just who you are. Having a clear definition of who your pharmacy is, instills confidence and pride in your employees as well as giving you a way to measure who is performing and who isn’t. If you decide that your brand is “Liz’s Drugstore. The Friendliest Pharmacy in town” then you darn well better have the friendliest pharmacists and techs and folks in town on the floor of your store. If you claim that your pharmacy promises “Prescriptions filled in ten minutes or less” then your employees should understand that that is a requirement of working at your store.

Secondly, clearly communicating your brand will help you position yourself to your target audience. “We always have time to talk to you” may be important to me but less so to someone under 30. If I am your target audience – and I bet I am- then letting me know that this is a value in your pharmacy may be enough to entice me to become your customer. Avoid the obvious when defining your brand. A clean store should be a given.

Third, defining who you are – your brand – will help you distinguish yourself from your competition. I have a client in St Thomas who learned that the pharmacy down the street from him routinely put a sign in their window around 1:30 or 2 in the afternoon that said. “No more prescriptions today. We are too busy.” Honest. He owns a beautiful new store that is very efficient. His marketing message is, “No lines and no waiting. We have in and out service.”

And finally, clearly understanding who you are will help you determine the best way to spend your marketing efforts. Notice I say efforts since not all of what we will discuss today takes money, but it will all take a concerted effort to see the results you hope to get.

I know who I am. Now how do I let everyone else know who I am?

So, we have established who we are. For the sake of discussion today, we are going to look at a fictional pharmacy – mine to be exact – and follow through the steps I would take to first of all train my staff and secondly the marketing activities I would use to gain and keep customers.

I have decided that my pharmacy, The Friendliest Pharmacy in Town, will be known for our consultative and caring patients activities. I have made sure to hire pharmacists who LIKE to talk to people and ENJOY taking the time to consult with people about their medications. Because I have clearly communicated to my employees that this is important, they understand that the expectation is there that they will interact with customers. If someone has a question about vitamins, then I expect that my employees will leave the safety of being behind a counter and will walk to the vitamin aisle to help this customer.

Furthermore, I have designed my store to mesh with our consultative brand. When you pick up your prescription at my store, no other customer will be able to hear the name of your medication or how it is used. I am sure all of you know of horror stories where unintended folks are made aware of something that is not their business – Viagra comes to mind. In addition, I have designated a private place in my store for people who would like to consult with my pharmacists. If your brand is about speed and convenience, then make sure you have designed your space so that customers can get in and out with ease.