Walgreens over the last few decades has become the most prominant drug store in the United States. When I was growing up, Rite-Aid and Eckerd pharmacies where the top two “corner pharmacy” giants. Jim Collins, in “Good to Great,” details how Walgreens went from a struggling family-run corporation to a national brand.
One of the key components that Walgreens focused on for their growth was their per-customer sales. This is a simple number that averages a store’s receipts per customer. Everything including the location, store layout, sales, and product positioning is sculpted towards increasing their sales-per-customer numbers.
It is critically important to know your “least common denominator.” For a primary care medical practice you would use charges and collections per visit whereas a surgical practice would use charges and collections per surgery because of what insurance calls global fees that cover all follow-up visits. Every business should know it’s least common denominator to drive business.
When you look at your ratios from your your P&L and Cash Flow statements, you take a 30,000 ft view. By looking at your least common denominator you can begin realizing sales and cost-savings that you are missing on a macro level.