As can be seen from Erik Hauser’s post below, Walgreens is dealing with a problem that could have a serious financial impact on a large portion of its customer base: a cancelled contract with prescription benefits company Express Scripts that could wind up reducing the number of prescriptions filled annually by the nation’s top pharmacy chain by as much as 1% to 3%. That could cost the company up to $4 billion in annual revenue and a sizeable portion of its customer base, who are already being courted in ads by other pharmacies that remain in the Express Scripts system.
In drug retailing, when people move their prescriptions, they also move a lot of their other healthcare and beauty buying. And having moved away once, they tend to stay away.
Walgreen is fighting a two-front war over those customers. On January 1, the company rolled out a new promotion for its Prescription Savings Club that will sign up new members for $5 rather than $15 during this month. In a Jan. 9 release, Walgreens said it had seen a “record signup” of almost 125,000 customers for the PSC in the first week of 2012. By Jan. 11, a spokesman told the press after Walgreen’s annual meeting earlier this week that the number had grown to 200,000.
Still, since the company filled about 80 million Express Script prescriptions in fiscal 2011—almost 10% of its total—Walgreens is going to need a truly heroic flood of PSC signups to stem the damage from this vacated agreement.
In the PR sphere, the company is at least trying to explain to its customers why this disruption happened, probably in the hope that they will keep their prescriptions with Walgreen either as PSC members or on a spouse’s medical benefits plan. To do that, the company has rolled out a microsite, “I Choose Walgreens”, which lays out the company’s side of the dispute.
They’ve then gone on to promote that site in their Twitter feed, throwing down on Jan. 11 with this tweet: “Patients should be able to choose their pharmacy, not @ExpressScripts. Tell them people want a choice by tweeting hashtag #ILoveWalgreens.”
The company has framed the issue as a big healthcare provider opposing consumer choice, but so far the Twitter response seems to be working about as well as McDonald’s campaign to promote its mango smoothies: a number of supporters showing the love, but also plenty of the kind of Twittertalk they’d just as soon not get:
“#ILoveWalgreens because it’s a pharmacy where you can buy sweatpants and vodka.”
“#ILoveWalgreens because they made my best friend work on Christmas Day a week before her suicide.”
“#ILoveWalgreens because they have a GREAT selection of cough syrup and don’t ask questions.”
The Jan.11 tweet went out as a Promoted Product, placing it at the top of Twitter search results, and as expected then became a Trending Topic for a while. As happened in the McDonald's instance, a goodly portion of the tweets to the tag then became about how Walgreens had to "buy love" with a promoted message.
As Tonia Ries points out in The Realtime Report , that kind of subsidized promotion carries a big risk in Twitter, since the brand then has no control over the follow-through.
On top of everything, @ExpressScripts responded on Jan. 12 not with a hashtag campaign but with six simple tweets that condensed their side in the argument to 140-character slices. No links here except one: to a page on the ExpressScripts site specifically designed to help Walgreens customers find a neighborhood pharmacy that would honor their Express Scripts benefits. And as the New York Times has noted, plenty of those competitors are campaigning to get that switcher business.
Geography has made me a Walgreens customer, but I don’t use Express Scripts, so I don’t have a dog in this fight. Still, it will be interesting to see whether the company was right in marshalling the integrated tactics of a loyalty promotion, an issue web site and Twitter’s Promoted Products to make its case to some apparently very disgruntled customers. Or does Express Scripts get the win for staying out of the falmes and simply offering members a utility to let them move their business elsewhere?
(Side note to Walgreens: I love the look of your fancy new Chicago flagship store at State and Randolph, complete with prepared foods, wine cellar and humidor. And next time I’m in needing TheraFlu I’ll probably pick up some Pinot Grigio and a few cigars to wash it down with. But as for buying your to-go sushi, I’m going to have to make a few visits and check out how quickly the stock turns over.)
Network
