The Business of Pharmacy Podcast™
May 15, 2023

Scaling Pharmacy Services | Zach Chirico, Aaron Hannah, & Sebastian Endicott of Zillspace

Scaling Pharmacy Services | Zach Chirico, Aaron Hannah, & Sebastian Endicott of Zillspace

In this podcast, host Mike Koelzer and three individuals from Zillspace - Zach Chirico, Sebastian Endicott, and Aaron Hannah - discuss how their company helps independent pharmacies grow their business by serving as an outsourced sales and marketing team, building relationships with physicians, and utilizing a combination of in-person and remote meetings.

  1. Outsource sales, marketing.
  2. Personal interaction preferred.
  3. Empathy, customer service.
  4. Remote work challenges.
  5. Building long-term relationships.
  6. Amazon, Google, Berkshire Hathaway.
  7. Mixed success healthcare disruption.
  8. Specialized healthcare knowledge.
  9. Collaboration for problem-solving.

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Speech to text:

Mike Koelzer, Host: [00:00:00] 

Zach, Sebastian, and Aaron, for those that haven't come across you guys online, introduce yourself and tell our listeners what we're talking about today.

Zach Chirico: My name is Zach Chirico, the founder and CEO of Zillspace. 

Sebastian Endicott: My name is Sebastian Endicott. I'm Director of Business Development here at Zillspace. 

Aaron Hannah: My name is Aaron Hannah. I am the clinical sales manager for Zillspace.

We help independent pharmacies grow their business, really what it comes down to is, getting more scripts in the door for them. 

Acting as an outsource sales and marketing team going out to the market, creating those tangible relationships with physicians. Get them to start sending scripts to the pharmacy and then really help manage that relationship over the long term to keep that flow of scripts coming in the door.

Mike Koelzer, Host: So when you guys go out, you're representing the pharmacy,

I imagine at some point there's gonna be a time where you've got double people in the market. you've got this pharmacy that's trying to do this and you're almost hitting the same people that are trying to do, I dunno, let's say a home healthcare place hires or something.

 Have you ever come across that? Or is the sales rep that's going into the doctor, do they have the pharmacy written on their face? Or is it more representative in general to solve doctor's problems?

Aaron Hannah: No. So we're representing that pharmacy. Yeah, a hundred percent representing their pharmacy. Each pharmacy we work with is gonna have a designated rep that's gonna handle their account, that's gonna represent them to identify as a clinical salesperson or a member of x, y, Z pharmacy. So, they never know who Zillow space is.

We're always in line with their brand, what they're going after. And I think it really is important to have that close relationship with our clients where we actually ingrain within their business. we're on calls with them on a weekly, biweekly basis as scripts are coming in the door as problems are happening out there with the clients we're already working with, or trying to land new clients for them.

So, yeah, it's very much being a representative of that specific pharmacy and making sure that's how we're, portraying ourselves to potential clients.

Mike Koelzer, Host: And then are you guys in person or are you video or audio with the doctor's offices?

Aaron Hannah: So it's, it's definitely a combination. Here in New Jersey we do have some boots on the ground for some of our clients. Now, we have clients as far away as Missouri, Oregon, Washington. So obviously in situations like that we're gonna jump on a Zoom call like this with the physician, kind of go through that pitch with them.

We also have set it up in the past where, we jump on Zoom and they have a phar tech there. The pharmacist comes in person and we kind of double team that physician office. But the majority of our work is remote. And everybody, not everybody, but some people think, Hey, can you really get results on a Zoom call with a physician?

And you know what I find is, yeah, the stats are there that having a Zoom call with a physician, those team members, you can really get those results that you're looking for.

Mike Koelzer, Host: Guys, I don't care about the results. Once you're there, I can picture that, especially if you have a physician that's dedicated some time to it, they probably have that hole in their resources that they're trying to fill. How the hell though you get a doctor to sit on a Zoom call, especially if you're not feeding them.

Aaron Hannah: A lot of times we are doing some type of lunch or breakfast with those offices.

Mike Koelzer, Host: With the Zoom call.


How do you do that?

Aaron Hannah: So very similar to what we set up here today. We'd send out a Zoom link to them. they'd have somebody from their team get set up. And believe it or not, it actually works out pretty well sometimes with having the whole team there at once.

So sometimes there's two or three physicians, the MAs are there, the om are all in one room, and we're having a conversation versus, all right, I speak to the doctor, then I have to go to another room to speak to this man. And there's five different conversations going on.

Mike Koelzer, Host: So you're hiring in the food or the food's being delivered. Let's say you're the state away, they're bringing it in for that time.

Aaron Hannah: Correct. 

Mike Koelzer, Host: now? I feel like I should have bought you guys something 

Sebastian Endicott: Next time.

Zach Chirico: And then it also really gives that pharmacy owner the ability, cuz we can then share that virtual lunch that is recorded really the goal of what we drive is giving them intelligence. And so, you're dealing with a lot of business and scientific minded people . When they went to school for four to six years, they were pretty much all math and science.

And so, that's kind of how we break down business,we take the scientific method of business. And so, anyone that we work with gets a report. They get to see who we spoke to, they get to see what the result of that conversation was.

So if we speak to Joe at this doctor's office, or Amanda at this doctor's office, the pharmacy owner can call right on top of that person, ask for that individual. And there's that level of continuity. 

The intelligence of why someone is not doing business with someone is often more important than why someone is doing business with someone. Because if it is controllable, then you can go back to the drawing board. You can take that intelligence back to the pharmacy owner. You can take that intelligence back to just the general business owner, and that's where we go to problem solve.

That's where [00:05:00] we can change our hypothesis of, okay, we thought. This specialty for this compound med would be a great campaign, but we spoke to these 15, different provider groups. This is what their feedback was. Was it a customer service thing? Was it a pricing thing? Was it a copay thing? What exactly was it?

Was it controllable? Is it something we can change or is it something that business owners just have to accept is a factor of their business and something that they just have to deal with, as they do go to scale. And every single niche of pharmacy has its own setback. like if you look at specialty versus compounding, as you build a national specialty, pharmacy contracting is extremely important.

If you're building a national, compound pharmacy, pricing is very important. And so you just have different factors. You have different issues and different types of niches of pharmacy. 

I think a huge piece of what we do, is really after we go out to the market is how we evaluate that and then optimize,really for campaign number two, and making sure that those statistics are there so that way, there's no romantic behavior, necessarily throughout, building a business.

We just try to create that algorithm so then that way they see, the more numbers of touches here is gonna equal a number at the end of that funnel.

Mike Koelzer, Host: How do you know when you've overstayed your welcome on a video call to the physician's office? Do they start to fidget? And how much time do you typically have when you're with the medical office? , paint that out for me a little bit.

Aaron Hannah: Every doctor's a little bit different for the most. They wanna come in, have the conversation and get back to what they're doing. So, you can't have a 20, 30 minute conversation. For the most part I've had them, but it's few and far between where you have those long drawn out conversations.

So when you jump in there, the first thing is asking good questions from the start, finding out what problems maybe they're having with certain patients, certain prescriptions, what their current prescribing pattern looks like, and really getting to the point of being a problem solver. And then you end it by really finding out who your key person's gonna be there at that office.

Is it Cindy at the front desk? Is it Jen? The Om? Who do I need to be contacting when something goes wrong, when a prescription needs to be filled, whatever that situation is. But from a timing standpoint, a lot of times once they jump on it's maybe five 10.

Mike Koelzer, Host: You guys probably hit this at a pretty good time because, pre covid going video seemed almost like a little bit cheap. I don't know if cheaps the right word, but it meant that you couldn't travel there or you didn't wanna take the time to travel there. And some people were familiar with the video conferencing, but not everybody.

But then people started getting sick of video things. I didn't, cuz I don't do much of it, but I know people got it. Sick of the whole video thing and wanted the warm touch. , and that's where the idea of the sales reps in the past, would provide the food and stuff like that, kind of that warmth.

And so it seems like a pretty cool setup that you guys are kind of merging the two of those, but in a positive way.

Zach Chirico: you know, If someone needs have an in-person conversation, and we're a little bit further down the line, I think we've always been willing to take the trip. and whether that's the pharmacy driving a, we have a client in Maine that they drive, two hours to a doctor's office.

 We actually just hired a salesperson who worked at Pfizer, g s K. and so they worked on a lot of inside roles, and then they had an opportunity to work for a pharmaceutical commercialization company where they're essentially the pharmaceutical company that is the outsource sales company.

 He was doing it in person for the first time. And his feedback on it was, 50% of my day, 70% of my day is driving so I'll drive an hour to go see this office, and if they're busy, then all right, now I have to go to a different office.

And so about half of their day, Was wasted just on driving in terms of gas, in terms of just trying to get to where you're trying to go versus being able to call, say a hundred people, set up those meetings, and have a schedule. For example, like we have a couple clients out in Pittsburgh and we can do in-person,through kind of that focus.

And so we do the same thing in New York. We do the same thing in New Jersey. and so our goal would be to have an in-person structure. I think it's appropriate. In all business cases, even outside of pharmacy where, shaking someone's hand, looking someone in the eye, especially when we're talking about, trusting , pharmacies or healthcare providers as well.

And, when they're given access to a patient to fill their scripts, they become their patient as well. And so I think building that trust has become a lot easier because of Covid. but there's, then there's always gonna be people regardless of age or experience that want to do business in person or have some level of familiarity.

And,I think that level of customer support is, especially when things go wrong, because, and healthcare things always go wrong. That's part of what it is. And so I think rising in those types of challenges, being able to answer the phone, is, to be available, is definitely something that we advocate for, really across the board.

And it makes selling and marketing a pharmacy that much easier. Like we were just, uh, Talking to a pharmacy benefit manager, they answer 99% of all of their calls on the first ring. So, how do you argue with that type of customer service? And so, it becomes very attractive to go out and sell it.

and going back to really the [00:10:00] competitiveness of, either the product or the niche. We've also had certain products and niches where we're just calling the office and then we schedule a lunch or breakfast out a month, but then the marketing materials go to the provider and they're like, we need to talk to this person right now.

because they have a need. They have 10 patients that have X need for whatever product that we're speaking to. And so, there's really just a, a again, meeting people where they are, if they have the urgency, if they have a problem where they have the patient base, those things are typically qualified to have good pharmacy discussions.

Now, do not say that there aren't doctor's offices that will,basically just take the free lunch because they wanna make sure that their lunch is covered every day. That definitely happens as well, I think. Everyone on this team at some point, and the majority of all pharmaceutical reps have had a very bad experience with a doctor's office.

Or maybe the lunch wasn't delivered on time, or maybe the food wasn't prepared properly, I know that it's happened to me. I've had a business card thrown in my face,eight years ago. it just, it happens. And so, I think being very empathetic to what is going on.

Are you the first person to call that day? Are you the hundredth person to try and call that day? And so, it comes down to being a human and, driving with that level of empathy and if you are getting kind of a defensive person and being respectful of their time, is very much what we try to do.

Mike Koelzer, Host: What is your success rate of getting through the door? 

Zach Chirico: So every client that we've ever represented, we have connected them to opportunities of qualified individuals that they were wanting to speak to. So, for example, if a pharmacy wanted to speak to every urologist in New Jersey, we would mount a campaign and then we would get them anywhere from say, 30 to 50 meetings, depending on, cuz now you're getting into scope of work, you're getting into budget, there's gonna be a huge difference between someone paying us, say $3,000 a month versus $15,000

Mike Koelzer, Host: much effort you're gonna put into it and how many recalls and things like that.

Zach Chirico: Exactly. Exactly. 

Mike Koelzer, Host: It might be higher for some of your clients than others. 

There's a variability there.

Zach Chirico: So Here's a perfect example. So I'm from New Jersey. Sometimes I speak quick. if I'm calling on say, Missouri or Texas, I may and unintentionally come off a little rude, 

not because I'm trying to, but just

because we're from New Jersey. This is how we express ourselves. 


Mike Koelzer, Host: One of the guests that was on, I said, Chris, I'm sure you're a great salesman because you've got the southern charm, a little bit of the southern accent and things like that. And he's like, well, Mike, you're just saying that because you're kind of in the Midwest.

If you were from New York, somebody would throw you out after the first three words because they think you don't know anything cuz you're too slow. So a lot of it has to do with where you are in the country and 

Sebastian Endicott: Yeah.

Zach Chirico: And so when you're calling on, say half the country, it's very different. So a pharmacy calling in New Jersey for urology is very different from a pharmacy in Texas. You have different levels of competition. You have different competitors in those local markets. You also have different national players that are focusing on certain parts of the country.

That is all very different. And so, I mean, what we see, from a guarantee standpoint, we always get meetings set up for our clients, you don't always get a setup, right? If a pharmacy comes to you and says, I want you to set things up with these 10 offices, you don't always get a meeting with those 10.

 We have to have a much larger, 

Mike Koelzer, Host: You're talking bigger numbers 

Zach Chirico: correct. 

Mike Koelzer, Host: Out of that bigger number, what's your success rate in actually getting in the office? How many of them are letting you in the door enough to even buy lunch for them?

Sebastian Endicott: So our scope of work per seat, for our sales engagement services is 2,500 touches annually. Right? And so out of that, if you say, on average, what would you say, guys? 40 meetings per year.

Zach Chirico: I would say 35 to 40 would be

a, a, a good number. 

Mike Koelzer, Host: So you guys call up a thousand offices. You are getting like 10 that say, sure. We'll have a meeting with you.

Zach Chirico: Well, they have to have some level of qualification, we have to make sure that they're writing the prescriptions, that pharmacy is good, so if we're talking about compounding erectile dysfunction medications, we would ask some questions there.

or else, we're just setting up qualified meetings. We have to make sure that there's a level of qualification. We take that piece very seriously because if we set up 25 meetings and none of 'em are qualified, then that does reflect on what we do.

So something that we make sure that is done, is that all right? What are the three to five questions that we have to make sure that we're asking in any niche of 


Zach Chirico: And you also have, 

totally, different reasons as to why businesses may not be available. and so there are some states, unfortunately, like for, I'm gonna use Maine as an example. if we, and we had someone reach out to us, if someone wanted us to do Maine dermatology for.

 It's just not something that we would do because there's like 20 dermatologists in Maine, and we have a partner out in Maine, but we don't target dermatology for So there are states that our services are not best used. Now. We can still advise someone to run that campaign and give them all the tools.

It's just not something that we would be able to necessarily help them with. So we love big data sets, because we know that the algorithm is gonna run, cuz we have an algorithm for our business and [00:15:00] our services, there's also an algorithm for our client services. And so having that scientific method, and that business science of, hey, what does the report say?

What does the data say? What do the recordings look like? So blending that qual qualitative data as well as that quantitative data, to really kind of drive those results. I wish that we could set up meetings where every provider is gonna send, but you have, like institutions, health systems for example.

something that came outta covid. A lot of health systems have vertically integrated their own pharmacy. I think overall everywhere margins are a little bit lower, in the healthcare industry right now. 

And so 

Due to that pricing pressure, there's a lot of things going on in three 40 B right now.

And so, there's a lot of changes where institutions are getting their own pharmacy. So five, seven years ago you could walk into a hospital like we're just outside of Pennsylvania, and or Philadelphia. And so at some point I've worked with almost every institution in Philadelphia, but today, if I had those exact same 

services, they've brought that in-house.

And so that goes back to what, what is even available in that market. Similarly, five years ago in New Jersey, there was a certain price point for erectile dysfunction medications. If I took that same pricing and applied it to this market, we would get no 


Mike Koelzer, Host: When you make the first connection from 

your office, is that a phone call? 

Aaron Hannah: Our first point of contact's always gonna be a phone call anytime we reach out to an office. there is are, like we said before, are 

they even qualified for us to send marketing 

Is it even something that we need to have a conversation at that initial point, and a lot of times that's talking to a receptionist that's talking to the om, that we're finding out that information before it's even worth having a conversation with them.

Sometimes it takes 3, 4, 5 calls before we even set up a meeting with the office. Sometimes you call the oms not there, and then we do this back and forth for a week or two before we even get that information to set something up. So sometimes it does take a little bit

Mike Koelzer, Host: Erin, I imagine that has to do too with. Someone's budget, right? If someone's got a bigger budget, they might want eight touches to even set something up and somebody else might want a couple just to get the low hanging fruit kind of thing.

Aaron Hannah: Correct. And I think the most important piece there with budget is the overall outreach, right? So our sales team is still extremely trained that, if they think this is gonna be a good target, they're gonna hounddog that one office to try to get that meeting set, right? So the difference there is if you have five sales people 

all targeting five different accounts, well you're gonna get that result that much faster.

But regardless, we're not just calling one time, oh, I didn't get a hold of them. Oh, they were at lunch. I'm just gonna keep moving on. We're gonna call 'em back later on that day, maybe the next day. Until we get that information we need.

Mike Koelzer, Host: Your client base. Is it all pharmacy?

Zach Chirico: no. So we do have some telemedicine companies. We have a lot of pharmacy consultants. We do have some non-healthcare companies. Like us, we just did marketing for a cupcake bakery, as well. So we have, even,

 a car detailing company we do marketing for as well. 

Mike Koelzer, Host: Out of everything you did, if you had to break off and do something like only one thing, is there another line that is interesting to you slash lucrative and so on?

Besides pharmacy?

Zach Chirico: think remote patient monitor.

 So you have connected devices for weight loss. So like an obese, patient. there's a number of telemedicine companies that are developing,basically where you could speak to a provider. I think the way that healthcare is going, if we were gonna start something, is the niche healthcare offering directly to commercial clients or directly to health plans.

 like we have a client that specializes in pediatrics, and she has a cost savings algorithm for cost avoidance as well as cost savings. And so she goes directly to Medicare, Medicaid, and run facilities to show how their prescription interventions can save them money.

 I think in pharmacy right now, there's a lot of pricing pressure because the clinical expertise is being bundled with the dispensing. And I think that we're starting to see where there's C P T codes that a physician can be reimbursed for through a collaborative practice agreement with a pharmacist for say, diabetes programs, high blood pressure, obesity.

 The older population, they don't wanna go to a nursing home. They don't wanna go to assisted living facilities. They wanna stay in their house as long as possible. and I think the young generation. if they don't have to leave their house to get care,I think that's where we're necessarily going, where they're gonna see a provider, either virtually if there's a diagnostic that's gonna be required or a prescription that needs to be required, is that gonna be cared for in real life?

And so some of these pathways are already being developed. I think they're on their way to being perfected. And what's unique about these kinds of pathways is that they very much are closed pathways, especially when you're talking on the commercial side of things, where you're gonna get one telemedicine provider that's using one pharmacy when you run cash-based programs, you can do this.

and so, access becomes that much more restrictive. And so if you don't have these types of strategic partnerships, you're gonna be completely, out of being able to even [00:20:00] attract those types of opportunities. No different than a specialty pharmacy not having any commercial contracts.

if they have to completely depend on Medicare, Medicaid contracts. they might have some serious limitations on being able to scale. 

Mike Koelzer, Host: Each of you pick. Three verbs. What do you do each day? And what percentage of that are you doing? 

Aaron Hannah: Yeah, so for me, I'd say meetings are probably close to 40, 50%,

Mike Koelzer, Host: with these guys eyes. 

Aaron Hannah: unfortunately. Yes. No, not all the time. A lot of more meetings with pharmacy clients and doctor's offices leading to a lot of those lunches and stuff like that. So that's a big piece of my time. I would say probably another 20, in calls 

Mike Koelzer, Host: Sales, calls to hopefully gain access and so on

Aaron Hannah: correct. And then I'd say the remainder is really working with our sales team, doing training, doing management, making sure we're effective out there in the field.

Mike Koelzer, Host: in sales in terms of not selling your product, but selling to the end product.

Aaron Hannah: So a combination of both, right? So it's our outreach and then each client we work with has their own little niche that we're targeting for them. So making sure that the salesperson's effective in that niche for that client 

Mike Koelzer, Host: Yeah. 

Aaron Hannah: across all niches and all clients. And then looking at our services as well.

Sebastian Endicott: I'd have to echo that a little bit. there, except for the training aspect, I'm not involved in the, training of the sales team, but I go on LinkedIn, Facebook, I make connections, networking, 

Zach Chirico: We like to have Sebastian Hunt.

Mike Koelzer, Host: He is a 


Sebastian Endicott: I'm the hunter. I love hunting.

you're the guy that scrapes up B List podcast and

 No, I enjoyed it.

Mike Koelzer, Host: What else do you do? Sebastian

Sebastian Endicott: yeah. Meetings as well as calls as well. and a similar, note to, as Aaron was just saying there,for, clients as well as, to, establish ourselves, in, in our market and make 

sure that we're known. \ 

Zach Chirico: I would say about 50% of the time is meetings. it's been a little different each year, that, we've been operating, we are self-funded. So being four and a half years in business, part of our celebration is just still being in business. And so, as we kind of grow, 50% of my time is pretty much in meetings.

Someone asked me this recently and I was like, my breakdown is basically phone calls, meetings, and thinking. I really can't discount the amount of time that I think I spend thinking and what's difficult to do. Quantify what the results are or something like that. Is that, you can't just say, alright, I'm gonna carve out this 45 minutes on a Tuesday.

For thinking, it could just come to you, some level of inspiration and it also could be forced. It could be, hey, this one person gives you bad news and now you have to sit there and think about said problem, and then attack it in five different ways.

And so, I think the first couple years was more of a reactive, what was gonna happen as each day happened. I think now we have the luxury where I can think out, what are we gonna be doing in 2024? What are we gonna be doing in 2025? And reverse engineering to that. So a lot of my time is definitely on the thought process, that scientific method in business science.

If we can track it, we will. If we can map it, we will. If we can create an algorithm off it, we will. and just really think. in different frameworks, having conversations. What is a great luxury for us is that pretty much all of our clients are CEOs and business owners themselves.

So we don't partner with companies, we partner with entrepreneurs. And so now we're starting to see the full cycle where, we have a client that, maybe they're the CEO of this, 

but then they're also an angel investor in this company over here. Then they also have a connection that their buddy owns this company and then, they know this person that just started this company.

And so getting that word of mouth out, is kind of increasing our business. So, my current thought process is how are we gonna hire, I think we have, four sales positions currently open. So that's currently, what's taking up a lot of current time.

Mike Koelzer, Host: Is your whole business virtual. 

Zach Chirico: We are, we're all remote. a lot of that is really from when I first, my career first started, I was a specialty pharmacy rep when I was 21 years old. , so I was always remote. And so, going from that position to a more executive position in a pharmacy, the pharmacy was always an hour to two hours away.

And so my whole career was always remote. And so now this is my ninth year doing it. And so to not be remote would almost be weird for me. , like there was a salesperson that we just hired and she was working in a provider office and she's like, this is fantastic. I literally have an extra hour a day just because I don't have to drive that extra hour a day.

So, we utilize, definitely a lot of that time, like Sebastian uses it to, spend more time with his sons. And so I think everyone kind of uses that. Like Aaron, Aaron just goes and chips golf balls in his backyard and that's why he is so good at Chip him. so I think everyone uses that time, a 

a little differently, but we have full intention of being a remote company.

I mean, we've been remote since 2018. 

I think it allows you to attract. Talent. but it definitely sometimes makes it a little difficult, culture-wise. cuz there is definitely tremendous value in just being a part of certain experiences, whether it's a meeting, or [00:25:00] something along that line.

Just being a part of more conversations. I can definitely see that, is something that needs to be navigated, a lot more closely with a remote.

Mike Koelzer, Host: Do you see anything innovative for us humans coming down the pike for that in terms of solving that? I guess it's a dilemma. I guess it's either stay home or not stay home, but do you see anything coming down the way of, solving that social issue, solving that team issue, that you hear people echo what you're saying, Zach, about, it's harder remotely?

Or do you think people just kind of give that up? There's no answer to it. , know, like homeschool people do it, like they have their home schools, but then they've realized they missed out. So they've got like on Wednesday morning, 20 of 'em meet and,wait in line for lunch somewhere or something like that.

 What do you think the industry is gonna do for that?

Zach Chirico: That's a great question. I mean, I think overall,every healthcare company operates a little bit differently. You definitely get people that are patient first. I met with a pharmacy benefit manager last week and, they were leading with, what their principles are,what their culture is like.

And were was even telling me as they're pitching me about their services, they're telling me about how they take once a month, their entire team gets together on a Thursday, people will be off and they still take the time to like plug into those 

calls. And so, I think webinars are a really popular thing to do.

Whether it's, an alcoholic beverage webinar 

Mike Koelzer, Host: hanging out with everybody, but everybody having a drink or something like

Sebastian Endicott: Almost like a virtual happy hour. Been a part of that. Those ones are kind of like a bit of a eye roll sometimes because it can be, they're trying too hard, like, 

Mike Koelzer, Host: It's kind of like in high school , I went to a parochial school and , I think, the girls had the uniform. The guys didn't, but we had to wear certain kinds of pants, like they couldn't be like G material. And then like once a month it would be like, help the needy Friday.

So if you brought a buck, you could wear jeans and a senior teacher guy or gal in front of the room wearing jeans. It just, ah,

how I can't, you guys, I can see it on your faces. It's just like, I didn't need to see that. 

Sebastian Endicott: We have some culinary artists on our team. And so we do have jams and treats. so we love music and we like eating food as I'm sure a lot of people do. and so we have a team channel that's a song, that, you were, taking your kids to school and setting the mood for the day off, whatever it is.

Zach Chirico: Is it good, is it bad? Is it fun? Whatever's giving you energy today, hey, share that and maybe the rest of the team. so, when you have a bunch of different people, everyone has different music tastes, everyone has different food tastes. someone's posting a bunch of Italian food, someone's posting, a bunch of Mexican food.

And so, you get, not only a little bit of inspiration, but you get to see, kind of, what type of music. Like, I think I'm yet to post anything that was made music wise in the last 20 years. I like diving into, what was , hot and classic rock, in the eighties, nineties, and, post kind of from there.

And so, naturally then, someone will be like, oh, I played this song, and I was thinking of you. So that was, kind of something, along that line. I think that music and food, as people just bond, 

Mike Koelzer, Host: Out of the pharmacy owners that you seem to have a little bit of a relationship with, but then they drop off, whether they don't actually hire you or they hire you, but only for a bit and they drop off.

What would you say about the business situation that they would drop off.

Zach Chirico: And really The only time that we ever see something go bad is because someone has a tremendously competitive marketplace. get a pharmacy owner that thinks, Hey, I gave these people a dollar 

and they're gonna flip a switch that they've had access to this whole time. I've been in business for over 10 years, but I paid them a dollar and they're just gonna bring me all this business and it's just gonna flow in.

And so we don't have any magic bullets, we don't have any magical switches. And so that data of the entire process, and really giving them that data, I would say, having the right expectation, no different than, someone walks on the lot of a.

Honda dealership, you have a different expectation than someone that walks on the Lamborghini dealership, and that's not a dig on Honda. , it's not speaking to the luxuriousness of Lamborghini, but it is a different expectation. And so different business owners have different expectations, whether it's because of experience, whether it's because of what they're looking for in their business, or whether it's because of their budget.

We try to build very long-term relationships and, even just recently, we've had to say no to some people just because we're like, I'm, this is, we just don't feel comfortable with it for whatever reason that is. sometimes saying no is just as important as 

saying yes. 

Aaron Hannah: There's a lot of times I'll have a conversation with a pharmacy owner and I do have to tell 'em no. And a big piece a lot of times is what their competitive advantage is. Are they doing something that a physician's office is gonna say, Hey, this is a great service, I wanna send my patients to this.

So if I have a conversation, you're not doing compounding, you've not doing compliance [00:30:00] packaging, you're just a strict retail pharmacy that has really nothing competitive that can be sold. Why is an office gonna send a prescription 30 miles away from the office to a pharmacy that's not doing something competitive for them?

So that's a big piece to a lot of pharmacies.

Mike Koelzer, Host: There's so many businesses that come out without their usP, And my thought is always like, unless you're opening a pharmacy up in, let's say, kind of any store, unless you're opening up that store in a physically brand new market, like somewhere that was desert before, but now it has houses, or you're coming in with a new product of, an iPhone 20 years ago or whatever.

 What you have to realize is sometimes a hundred percent of the market is being served, maybe not great, but they are being served. And maybe those people would switch over if something was 20% better. But rarely is something 20% better, it might be 3% better.

 As you're saying, Zack, that's reality that you have to push through.

Zach Chirico: and even the default. speaking very simply, something that absolutely crushes me, regardless of what pharmacy we're potentially representing, 

is when a doctor says, oh, I just sent it to c v s.

Mike Koelzer, Host: And there's a warning to, anybody trying to market something where, when I come into a small town or any town, I suppose when I come into a town off the highway, I'm not gonna stop at Joe's Burgers, but never heard of 'em before, because McDonald's, well, in my old age, I've raised up my, taste.

I'm now, uh, what's,

what's the one? Um, 

Zach Chirico: Shack. 

Mike Koelzer, Host: no, Better than that. Uh, Culvers. 

Do you guys have Culvers out there?

Zach Chirico: 

Mike Koelzer, Host: It's like a step above. Wendy's kind of like the five guys and smash burgers and all that. but there's no way in hell I'm gonna stop at Joe's Burgers. I'm gonna stop at one of these things we're mentioning, on a scale of one to a hundred, let's say it's a 50% satisfaction, something like that.

Joe's might be 90, but they might be 10. I might go into Joe's and, you know, they got workers with, you know, chest hair coming out, you know, and that's just the women, there's some rough places and so pharmacies have to realize that if somebody doesn't know, they might pick you cuz you're small.

But they might think you're a 10 on a scale of a hundred. They don't know. So that's where that marketing is so important.

Zach Chirico: And even as you mentioned, McDonald's, a great scenario of that, and especially when you talk to some smaller pharmacies where they're saying, that's just not something we prioritize. And I've heard this a dozen times of, well, we're a pharmacy in a small town and everyone already knows who we are.

And it's like, okay, but are they all using your pharmacy? 

Mike Koelzer, Host: Marketing is to get people's attention. Sales is to get people's money. And so if you're not doing the marketing, you can't get anyone's attention. You can't do a deal with anyone, regardless if we're talking about pharmacy, if we're talking about pharmacy benefits, telemedicine, institutional,health plans across the board, you have to get people's attention. And then from there you build interest to get 'em to a decision and hopefully some level of action. but you know, that's really the importance of marketing and sometimes. businesses die in obscurity. I was listening to Bezos and he said, some year, Amazon won't be here. We'll be eaten up. It's hard to believe, and you guys are too young to know the names of places. You would think the same thing like Sears, toys R Us, who would ever think that, but look at someone as pew's Google, who would think that even three months ago, people would be questioning Google's

strength in the market, and here they're, I'm not saying they're nervous, but here you got Chad, G P T and it's like everybody gets swallowed up eventually. It's hard to believe, but they do.

Zach Chirico: I think that's probably the most brilliant part of being in healthcare is that you've had these types of companies come in and try and disrupt. I was just reading an article last week, Amazon's like had three healthcare failed ventures at this point, and they've pulled out,their acquisition of PillPack is knock on what they thought it was.

The entire executive. Has quit at this point in time for PillPack. And so, they came out with this RX card offering and now, they tried to have an initiative with Berkshire Hathaway and JP Morgan that failed as well. JP Morgan just launched another, two initiatives for healthcare.

And so I think Google, is now technically they build a stop loss carrier. so, they are coming into healthcare. I think they're just doing it in slightly different ways. I think they're gonna leverage a lot of the technology that they already have built that they can kind of repurpose those large data sets to get those into, as you mentioned, ai.

I think that the next side of chat, G P t is then plugging into the exclusive proprietary data that each of these companies the [00:35:00] AI is gonna be based on. So like, no one has access to Google's data except for Google. And so if they start. underwriting stop loss for self-funded employers throughout the country, they're gonna have access to only that data.

So if they give a prompt to those AI engines, they're the only ones that are gonna prompt that way. Same thing with Amazon, same thing, with say Berkshire Hathaway on insurance. And so you have a lot of these players, I think that, I think there's definitely an overhype of how quickly it's gonna happen, especially in he. things that I thought were gonna happen 10 years ago still haven't really happened at this point. And so, if you know the healthcare space, I think that's a huge specialized knowledge gap because you get a lot of, and I even see it in a lot of telemedicine startups right now.

These are not pharmacy people. These are not healthcare people. These are Silicon Valley. very, just know the language to get venture back funding. And, we're hitting a little bit of a winner,wintertime with being able to raise funding with the way interest rates are. And so, it's a difficult time to build a business.

It's also an amazing time to build a business because you can kind of separate yourself, without necessarily having to raise an obscene amount of dollars. because we see companies that do raise that and 

then they still fail anyway.

Mike Koelzer, Host: We do some medical equipment at our store, and probably 15 years ago, there was this medical equipment from across the state, and they were gonna make these medical stores, the size of a Best Buy, something like that.

Well, when you don't have someone that's living and breathing that, first of all, I mean, 90 year old person has to walk across a parking lot that size, and, if you guys run into each other at, best Buy, you're gonna say, Hey, Zach, oh, you got that new album? Or, what phone did you buy?

Or, what computer are you looking at? Well, think about 40 years. you don't want to. Asking Sebastian what size catheter he bought, and then you're saying, well, no, I got, depends. Instead of that. And Aaron's saying, you guys, you should just get a, permanent, whatever, but it's like those aren't the things you want to do in a business.

And I think people forget that you want a smaller place to park close, run in, run out, be kind of anonymous. so not every, especially in healthcare, not everything scales as a lot of other products do.

Zach Chirico: I think that. Retail pharmacy is changing tremendously. I've never seen more pharmacist entrepreneurs than right now. Between remote patient monitoring, between pharmacogenetics, between collaborative practice agreements, between, being able to build cloud pharmacies, hub services, specialty pharmacies.

There's just so many different avenues and you only need one to really kind of be successful. just comes down to what specialized knowledge those individuals or individuals have.

Mike Koelzer, Host: Well, Zach, Sebastian, and Aaron, thank you guys. That was fun. It's cool to look behind the curtain a little bit.

 That's interesting stuff. 

Sebastian Endicott: for 

Zach Chirico: you so much for having us. I mean, I think this has been fantastic. Hopefully, there's some thought-provoking material to just have people ask questions about what's going on in their business.

 A different perspective, in terms of just, different healthcare businesses, is sometimes how problems get solved, much faster. 

And so,

We very much appreciate this opportunity and, hopefully , we can talk to you again soon.

Mike Koelzer, Host: Take care and I hope to talk again soon.

Aaron Hannah: Thanks Mike. 

Sebastian Endicott: much, 

Zach Chirico: Mike. Appreciate