MEET MICHAEL J HODGES
Michael J. Hodges is the founder of Success Marketing Rx, a strategic relationship marketing firm that helps independent pharmacy owners increase net profits and build equity by systematically attracting and retaining new clients with his innovative framework called the ART of Rx Marketing.
In addition, he’s actively involved in acquiring rental properties to his real estate portfolio. Enjoys living an active, healthy lifestyle. His biggest hobby is mountain biking and traveling to different trail destinations. And most importantly he’s a father of three children and strives to always attend their activities that create great moments in life to cherish.
In 2018, he sold his own independent drug store, Physicians Discount Drug. A rural retail pharmacy and compounding center, specializing in weight loss, pain management and BHRT.
Collectively, Michael has been servicing the pharmacy industry for over 28 years. With experience in distribution, wholesale, private label, compounding, weight loss, pain management, diabetes, drug nutrient depletion, bioidentical hormone replacement therapy to starting, maintaining, managing, marketing, and selling his own store he adds tremendous value with his consulting service.
In addition, his extensive study of direct response relationship marketing is the key ingredient to all his success. With this vast experience and marketing knowledge, his vision is to help other pharmacy owners strategically serve their communities, share their knowledge, and create solutions to enhance the quality of people's lives. By helping them discover their own unique purpose will increase profits, build equity and provide an ideal lifestyle along the way.
Why Pharmacy Owners Should Learn How To Think Like A Thief?
My story as a retail pharmacy owner began back in late 2010. I did a complete start up from scratch in a small medical park on a shoe string budget. It took a huge risk and I had very little capital, I was already in debt. Everyone around me was telling me not to do it. Even my closest family members. They’d keep saying “you’re not a pharmacist” But something inside me said this is it, you got to do this, not just for myself, but for my family. I was just about to turn 48 and I was all in.
I was excited about my new opportunity and was out looking for ways to save money. I purchased all my fixtures, pharmacy counter, shelves, security gate and even the corner sink from a Rite Aid that had closed for $4,500. I bought the fax and phone system on craigslist and purchased the QuickBooks POS system just to get started. I wasn’t convinced on paying someone $70,000 to upfit the store nor spending $15,000 for a cash register. And I didn’t want to borrow it either or be buried in a lease. I built this on a very limited budget and not realizing the obstacles I was about to face. It took close to 6 months to get everything together to open.
Opening day finally came around and we were up and running. We did 104 prescriptions our first day. Located in a medical park had its advantages, the town of 20,000 had 5 other independent pharmacies and 5 of the big box chains all within 3 miles of me. I could sense that my local competitors weren’t happy of my opening, but we were well received by the clients who came in the store and that’s all that mattered. We had the doctor’s hours, opened Monday thru Friday, no nights, no weekends, and no drive thru window. The staff loved it and the numbers were working out.
We Were Robbed!
Then unexpectedly nine months into this endeavor I was confronted with one of the most traumatic events in my life that very few pharmacy owners experience but should be aware of, we had an armed robbery.
It happened right at 8:30 am when the store opened. My lead technician had just unlocked the door. She walked backed to the pharmacy turned the corner to find a gun in her face. The robber had come in behind her and jumped over the counter to meet her. He literally hog tied her with zip ties and placed her faced down. Immediately took the drugs and was out the door in less than 4 minutes.
I’ll never forget the phone call I received and the overwhelming emotions I had when I arrived seeing her sitting there traumatized by this. Here sat a single mother, who had just experienced fearing for her life. She was a devoted employee, my key technician, she helped me with all the startup procedures to get the business open. She was literally a huge asset to the business. She was so shaking by this experience that she couldn’t come back to work. Even after professional counseling, I lost her, and I was devastated.
Talking with the investigator, he told me something that I’d never forget, and I believe every pharmacy owner should know this as well! He said, “you've got to think like a thief." Here I am thinking it’s all about customer service, I’m new to the community, I’m trying to add value and create experiences and now I’ve got to think like a thief, so I did. And it's good that I did. Here’s why. I added more cameras inside and outside the store. Made sure my blind spots were covered. I even added a large monitor so when you walked in the front door the first thing you saw was you on the TV with a sign that said smile! But that wasn’t enough.
It Happened Again!
You won’t believe this but 60 days later I experienced the 2nd most traumatic event in my life! We had another robbery by the same guy at gun point. This time it was even worse. It was Easter Monday and we were just about to close early at 1:00 and there were three people in the store. Two technicians and my wife the pharmacist.
The guy literally ran in the door with his gun. He zip tied and placed the two technicians face down in the pharmacy and had my wife help with the gathering of the drugs and money out of the register, then zip tied and put her faced down as well. The guy was in and out in 3 minutes.
This time I at least capture the whole thing on video. I was devastated and traumatized watching and seeing my wife and technicians, tied, faced down at gun point. Fortunately, there were no customers in the store. This guy could have cared less who was in the store. After viewing the videos several times, he never looked once to see if anyone had come in the store, I can’t imagine what he would have done if somebody did.
I’m thinking this isn’t what I signed up for! Here I am eleven months into starting the business, in debt, wholesale note coming due, and experience two armed robberies. What else could go wrong.
This Is How Fast Your Life Changes!
One - One Thousand, Two - One Thousand, Three!
My back was against the wall. I had to make some changes and quick! I thought one way to keep the robber out was to keep the door locked. So, the first concern was securing my employees and customers safety. The very next day I had a 400lb magnet installed on the front door with a doorbell and to enter the store you had to ring the bell and we would look up and if you didn’t have a mask on we would buzz you in!
We became one of the few and maybe the first “locked door” retail pharmacy in North Carolina! This was the only way I could get my wife the pharmacist to come back to work and feel safe.
Talk about inconvenience to my customers, you do all the work necessary to get them to come to you, to having a locked door to keep them out. Fortunately, most everyone understood why the door was locked once you told them the story of the robbery. In fact, still today the door remains locked.
The guy was eventually turned in to crime stoppers by his roommate. He was bragging how he tied up several women and went up on his drug prices. He was arrested and sat in jail for 8 months, then he was released due to his father vouching for him and said he was with him that day. The roommate had fled on some excuse that he missed his court date. The robber did have a mask on. So much for justice. If this was a bank robbery it would have been mandatory 7 years in jail.
How To Think Like A Thief!
Here are a few things to consider when doing so.
- Go outside and sit in your car and really look at your business and say how would I rob this store? Look for blind spots, parking, and access points. Look where you and all the employees park, is there a pattern? Same car and spot every day? Keep in mind who has they keys when opening and closing. You can easily be met outside by gun point and led right back in.
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Do you have adequate lighting at all your doors and parking? Is your store well-lit at night?
Where can you place outside video cameras to cover weak spots?
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Walk in your front door and count the number of steps it takes to get to the pharmacy counter. Now with a stopwatch, time how long it takes to walk to the pharmacy counter and how long it takes to run to the counter. You’ll be surprised that it doesn’t take long.
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How often do you speak with your employees about what to do in the event of a robbery? Do you have a panic button around your neck? Where are the panic alarm buttons located?
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Discuss these procedures and safety concerns. Especially at opening and closing, shift changes and who checks the bathrooms at night.
For more detail information and how to get these training procedures in place, I urge you to log into www.RXPatrol.com. This site is amazing, and once you log in you can search all robberies that have been reported and view the training videos. Great information to train your staff and turn them into procedures for your store.
You’ll be surprised at what you’ll see. Most robberies are not reported by the news and you’ll be staggered at the statistics. As of this writing June of 2019 there has been over 90 drug store robberies this year alone. It’s easier to rob a pharmacy than a bank. The street value of these drugs is unbelievable. Remember these robbers will do anything when desperate. I hope that my experience is compelling enough for you to think about your situation and to protect the safety of your store, employees, and customers.
My Struggles Didn’t Stop There, They Just Got Started
Have you ever experienced the reality of running out of money? Concerned that you weren’t going to make payroll? How you were going to pay the wholesaler each month, then that big weekly deposit came in just in time from the PASO, only to go thru it again week after week. That was what I was going thru after my first year in business.
We were filling prescriptions and the numbers on paper were saying we could pay the monthly expenses, but I was running out of capital to reinvest to cover the needed inventory to stay afloat and the upcoming notes that were coming due. I had a large inventory note due, credit cards were getting maxed out and I needed about $300,000 to pay everything off.
The "Nay Sayers" were constantly reminding me, “I told you not to open that store”.
Here I was about to turn 50 years old and back in debt again. Literally my back was against the wall, with 3 children, one was about to go to college and I had no retirement savings. This was my defining moment, I had come all this way, put everything I had into this business. This was it. I decided that this was enough, I wasn’t going to take it no more, I will not have financial lack in my life.
The local banks didn’t want to loan me any money until I was established for 2 years. I searched for investors, no luck, contacted the chains for a buyout, that was a joke, and reached out to other business owners for advice. This one guy said when you really need the money borrow from the hard money lenders.
I kept searching and finally spoke with this one well known pharmacy broker/consultant. He quickly reminded me and made me aware of the positive things I had. 1. 40,000 Rx per year with cash flow. 2. A great list of current clients and 3. I was a compounding pharmacy. He asked me this one question and it changed everything from that moment forward.
The question he asked was, are you currently billing for your compounds? I said may be a few hormonal prescriptions but that’s it. That is when he referred me to at that time was Freedom Pharmaceuticals and to join there CPCSI program where they taught you how to bill correctly for compounds. My first thought was, bill for compounds, at those AWP’s, you can’t do that, I’ll be audited and shut down. This is crazy.
I had to get out of my own way of success and thinking that I knew everything but didn’t. The lesson I learned was this, it’s the things you don’t know that keeps you from being successful. Instead of focusing on what you don’t have and worrying about things you cannot control is to focus on what you do have and learn what other successful people are doing. This new mind shift gave me a renewed faith in steering the course to keep moving forward towards my dream of owning a successful business.
The tuition to join was $6000. I had to make a life changing decision, learn how to bill compounds, or sell my business. Pay the rent or go to the class. I’ll never forget it was November of 2012, I attended the class and met multiple pharmacy owners across the country who were billing compounds and making some serious money.
As soon as I returned, I positioned myself as a pain management expert. I contacted the local physicians and I was amazed that most all of them were currently writing these compounds and faxing the prescriptions to out of state pharmacies to fill. From that day forward, I became the local alternative and grew the business from there.
Immediately I had a huge change in my volume and net profit. It took several months to year, but I was able to pay off the hard money lender, pay off my wholesaler, pay off my credit cards and even started to accumulated capital. My plan over the next couple of years was to reinvest my new-found capital and start accumulating rental properties to replace my income. This was my exit strategy. I was always interested in real estate, but never had the capital to invest. I stuck to this plan and was out purchasing 2 to 3 properties a year and I even bought a few mobile home parks.
Looking back at my struggles and frustrations of owning a pharmacy, I’ve learned that success isn’t a straight line, it’s a continual zig zag of ups and downs. Surround yourself with likeminded people. Change is constant and having a lifestyle that you can control is just as important. By believing in yourself, having faith, dreaming big and not listening to people who want to bring you down is definitely the road to take.
Michael J. Hodges’ Pharmacy Evolution
I'd like to share a bit of my back story with you! I got started in the pharmacy business back in the early 90's, not in retail ownership but on the wholesale and distribution level of weight loss supplements. I had a little niche product called Extra Lean that offered a great niche profit exclusively to independent drug stores and an easy solution to curb appetite, increase metabolism and burn fat for people wanting to lose weight.
Extra Lean was a great success! I offered a 100% no risk guarantee on the product, offered free samples to give away to interested customers, clear acrylic counter display, printed materials, "statement stuffers" and ran free advertisements in their local newspaper.
Those were the days. I remember getting in my car and driving throughout North and South Carolina setting up accounts one by one. Then I started running national ads in Drug Topics, Pharmacy Times and exhibiting at Drug Wholesalers shows and the big national NCPA trade show.
Lose Weight Feel Great!
That business grew to over 3000 drug stores with only three or four products and generated a lot of profit for everyone. What I learned from all the years of working with pharmacy owners was that the only reason the product sold successfully was because we offered advertising, samples and marketing materials that had the right message and was directed to the right market of people wanting to lose weight. In short, we simply offered people what they wanted. The lesson here is find out what people want and give it to them.
In 2004, the company that I had built over 14 years fell apart from one government ruling. The government banned the herb ephedra. The main ingredient that was in my weight loss product. I went from hero to zero all in one decision. I tried to come out with ephedra free alternatives, but the repeat business wasn’t there. I stuck it out for as long I could then eventually I lost it all and was forced to file chapter 7. Those were some tuff times for me and my family. Having to start over with limited resources.
Fortunately, the government could not take away my education in direct response marketing. Over the years I had been reading, buying courses, attending seminars, and applying these direct response marketing techniques. After accumulating so many pharmacy accounts over the years I was able to start a done for you marketing and consulting business to help pharmacy owners attract and retain clients. My father-in-law owned a pharmacy and I used all these techniques in his store as tests before I would share with other owners. We increased his BHRT compounding business by 200% just by placing ads that directed people to a landing page and a 24-hour recorded message. This increase in compounds helped expand his revenue streams with consultations, saliva testing and nutritional supplement sales.
I shared this experience with other pharmacy owners that helped increase their sales by attracting, retaining, and building lifelong relationships with their clients. I continued working with these owners for over seven years with this one system that I developed. Then when I had the opportunity to open my own store in 2011, I started implementing these marketing strategies that helped increase my volume from day one.
Looking To The Future
Nothing makes me happier than helping pharmacy owners serve, share, and create experiences in their business to enhance people’s lives. Pharmacy owners can position their business to become a local expert with their knowledge and experience. They can build the business and lifestyle they dream of by implementing my framework called the ART of Rx Marketing.
What began as a struggle, became an idea and then became a movement. The new Pharmacy Revolution is here, join me to make this change!
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