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Awareness remains hurdle with loyalty programs
December 17th, 2012
NEW YORK – Chain drug stores are on the leading edge in using loyalty cards to win and keep pharmacy customers, yet customer awareness of such programs could be greater, a study by Boehringer Ingelheim Pharmaceuticals reveals.
The company's Pharmacy Satisfaction Pulse survey — based on 20-minute online interviews of 34,424 adult pharmacy customers — suggests that such loyalty initiatives aren't major drivers of customer satisfaction at the pharmacy, compared with prescription pricing and accurate, timely filling of prescriptions, which are far more important to pharmacy patients.
Moreover, members of such loyalty programs can't apply the rewards they earn to their prescription drug purchases, so the programs don't impact Rx pricing. However, their prescription purchases do generally provide reward points that can be applied elsewhere in the store.
Overall awareness and, by extension, consumer education remain issues. No fewer than 29% of pharmacy customers polled didn't know whether their pharmacies had a loyalty card or not. That percentage was unchanged from 2011 but was down significantly from 34% in 2010.
Rx Customer Use of Loyalty Cards
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The overall number of those who had loyalty cards increased two percentage points to 38% in 2012, after jumping nine points from 27% in 2010. The number of those who had been offered rewards cards and refused them dipped to 6% in 2011 and 2012 from 7% in 2010.
Not surprisingly, the figure among chain drug customers not being aware of a loyalty card was much lower at 22%. More chain drug customers, 58%, said they had such a card or had been offered one than those of any other Rx channel. Only 11% of chain drug shoppers said that their pharmacy did not offer a customer rewards card.
Supermarket pharmacy customers are also highly active in such programs, with 55% having a card or having been offered one, while only 17% said their pharmacy didn't offer a card and 25% didn't know about it.
After chain drug and supermarkets, the participation falls off drastically: 34% of mass merchant Rx customers said their pharmacy operator didn't offer a card, and 46% didn't know if one was offered. Only 14% had a card, while 6% had been offered one and turned it down.
Understandably, the figures for independent drug stores and clinics reflect the lower importance of such initiatives to their business models, which place greater emphasis on personal service and pharmacist engagement. In addition, substantially more customers of independents and clinics — 55% and 56%, respectively — described themselves as "very satisfied" with their pharmacy's pricing than did chain drug customers (38%).
With the rollout of Walgreens' Balance Rewards program earlier this year, all three of the nation's largest drug chains now offer customer loyalty programs.
CVS/pharmacy's ExtraCare has the longest track record, having been available for 14 years and now totaling more than 92 million active cardholders. CVS executives say ExtraCare positions the retailer to provide tailored offers, rewards and information to each member, based on their individual shopping preferences. Pharmacy customers who are members receive a $1 reward for every two prescriptions filled. Since 2010, diabetes patients have had the opportunity to enroll free in ExtraCare Advantage for Diabetes, which provides savings rewards on more than 100 diabetes-related items.
Rite Aid describes its wellness+ rewards program as pharmacy-centric. While customers earn one reward point for each dollar spent on nonprescription items, they earn 25 points for every script (and immunization) purchased. Enrollment in the program also gives them 24-hour access to a Rite Aid pharmacist via the Internet or a toll-free telephone number. There is also an adjunct wellness+ for diabetes program that provides toll-free and online access to diabetes specialists plus savings for members.
Linking loyalty programs with pharmacy services may or may not reinforce loyalty to a specific pharmacy, but it is more likely that they are drivers of store traffic and purchases. Chain drug customers shop their primary pharmacies more often — 4.4 times a month — than any other Rx customers.
Boehringer Ingelheim's research also sheds light on the use of co-payment cards and coupons by pharmacy patients.
The co-pay cards and coupons are issued by pharmaceutical manufacturers as a way to offer substantial discounts on the higher co-payments required by health plans for branded drugs. According to the Boehringer Ingelheim Pharmacy Satisfaction Pulse survey, their use is much more common among chain drug customers and, to a lesser extent, supermarket pharmacy users, than among other Rx channel customers.
Thirty-five percent of chain drug pharmacy patients polled said they have received and used the cards, while another 7% have received but not used them. Among other pharmacy customers, the next highest percentage of those who have received and used co-pay cards is supermarket Rx patients (29%), followed by mass merchants (23%), independent drug stores (22%) and clinics (12%).
Overall, only 28% of customers surveyed reported that they have received and used the cards, and about two-thirds (66% in 2012 and 67% in 2011) have not received them at all.