by Sean Grudzinski for our 99 Ways to Make a Positive Difference in Your Pharmacy blog series

How do your sales compare to other retailers with similar footprints? What categories are under-performing and which are outselling national averages? How does your customer service compare to competitors? If your answers are, “I have no idea” then your response is consistent with many retailers. To determine whether you are achieving success or optimal performance, a baseline or measure needs to be established.

Benchmarks create perspective – they tell you how you compare relative to peers and against industry standards. They should then be used to establish goals and targets to improve your businesses’ bottom line results.

Benchmarking Steps:

• Identify what will be benchmarked – financial ratios like operation expenses-to-sales, inventory turns, gross margins – whatever is key to measuring your performance.
• Focus on the under-performing areas needing improvement – i.e., your revenue for key OTC categories is below industry averages so that should be an area of attention.
• Set targets – Establish aggressive but realistic goals, i.e., increase revenue in your pain relief and digestive health categories by 10%.
• Generate ideas and action items – Brainstorm ideas that would impact your goal and deliver results, i.e., what can you do to increase transaction volume? How can you raise your average retail price while maintaining your competitive position?
• Implement plans (and commit) – Try something new and go “all in”. You cannot do the same things and expect different results.
• Monitor and measure – establish a timeframe and measure throughout and at the end. Make necessary adjustments as you monitor results.

Using measures and industry knowledge from experts in retail like HRG and industry associations can help you gain perspective and offer suggestions for addressing areas of opportunity and optimizing performance.

How do you measure up?

Sean is a member of the Hamacher management team, overseeing all product research and analysis. In addition, Sean establishes the strategic direction and standards for our master item file and related attributes as well as HBW, HHC and prescription pricing services. Sean works directly with internal and external customers to manage strategic projects from inception to implementation.