McKesson Puts Trust in B2B Partnerships

Customer Experience
Customer Experience

Medical distributor McKesson has been in business for more than 174 years, and has built an $88 billion company
on strong customer strategy. The company provides drug stores, hospitals, and doctors' offices with everything from
cotton balls to generic drugs. As its products and technology change, the one constant is the importance of
customer relationships.

At the recent Conference Board Customer Experience conference, Brett Parsons, director of Analytical Solutions, explained that for McKesson, like other B2B companies, its customers are its partners. "The strategy is to build long-term customer relationships to deliver a comprehensive offering," he said. This involved developing a consistent, enterprisewide customer-driven approach, supported by a business unit level view of the customer. Customer data is now captured in a single place, and new business processes are prioritized based on the highest impact on the customer

For its independent pharmacist customer group, made up of 17,000 customers, this strategy meant finding out what
they needed.

Learning from customers

Traditional surveying can provide a periodic snapshot of a customer relationship, but often is not enough to deepen or improve it. "Traditional voice-of-the-customer tools talk about how we are doing right now, not how we want to do it in the future," Parsons said. Instead, McKesson worked on an integrated framework of actions, experiences, attitudes, behaviors, and results. For example, customers were asked, "What's the experience when you deal with McKesson? Do you have the tools you need to get the most out of the relationship? Do you trust and value your relationship with the company?"

On the analytical side, the company reviewed which customer touchpoints were the biggest loyalty drivers, measured the financial impact of those touchpoints, and then asked customers how they would like to see them improved.

The pharmacists told McKesson they wanted their relationship elevated to a strategic level. They also liked the automated
systems McKesson provided, and wanted more product and business information. They didn't just want to be sold to. Their ideal relationship was a true partnership, in which McKesson could use its size and strength to help each independent pharmacist, who is a standalone shop in a sea of chain pharmacies. But the big factor was trust, Parsons said. Customers wanted to know they had an ally and that they had a voice when dealing with insurance companies and managed care organizations.


As a result, McKesson created the HealthMart franchise system. It lets the independent pharmacists run their pharmacies their way, with McKesson's support as a strategic advisor and collective bargainer. McKesson works with each pharmacist to focus on strategic initiatives, such as increasing drug profitability with the latest generics and a loyalty program; using the right marketing messaging; improving employee productivity; increasing front-end profitability with POS tools and catalogs; and managing cash flow and inventory with automated tools.

Sales reps also evolved their role to personal advisor, and trust became paramount to the relationship with pharmacists.
"Our customers are looking to the corporate office to help them solve problems," Parsons said.


Since March 2006 the franchise operation has grown by 350 percent to 1,150 stores, making it the sixth largest pharmacy "chain" in the United States. Parsons said the company is constantly looking at loyalty drivers to see where more improvements can be made. There are also plans to extend the integrated framework strategy to other customer groups. He admitted that there is still more work to do to provide a consistent customer experience. "We want to advance the health of the healthcare system by advancing the success of our partners," he said.