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Merchandising

How to grow your veterinary clinic’s retail business

Pet owners ask their veterinarians for advice on products — from pharmaceuticals to pet food — so don’t miss the opportunity to add to your bottom line with a growing retail business.

How to grow your veterinary clinic’s retail business
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When Sara Karasinski, CVPM, became practice manager at Arrow Veterinary Clinic (arrowvetclinic.com) in Lowell, Michigan, she inherited a pile of unsold product inventory collecting dust. She dived in and overhauled the veterinary clinic’s retail sales, and now the team runs a lean, mean, profitable retail business, accounting for about 10% of the practice’s overall sales. Here’s how she did it.

Choose the Right Products

The first thing Karasinski did was figure out which products would move quickly and dump the rest. “Having things sit on the shelf nine months a year — or a couple of years — isn’t profitable,” she says. “You’re just paying someone to wipe the dust off occasionally.”

She focused on items that were supported by the practice’s medical team, would turn over every month or two and were sought after by clients. Nylabone chews (nylabone.com) sold well.

“Sure, you can find them at a local pet store or grocery store, but if they’re already here and clients can purchase them and support the small business, they often will,” Karasinski says. “We purchase a handful and turn them over in 30 or 60 days.”

Other best-sellers include Kong toys (kongcompany.com), LupinePet leashes and collars (lupinepet.com), pet odor candles (some clients buy these to match the season and even purchase extras as holiday gifts) and Millers Forge nail trimmers (millersforge.com). That last item was a surprise to Karasinski.

“People would come in and say, ‘What are you using to trim my dog’s nails with? I’m trying to do it at home but these ones I got at the store are terrible!’” Karasinski says. “So we started carrying the ones we use in the clinic, and those turn very quickly.”

Nutraceuticals and home care products are another important segment of the practice’s retail inventory, especially joint supplements. If an over-the-counter product is recommended during the appointment, the client has the option to take it home that day. Limiting options to what the hospital recommends keeps inventory manageable and also builds trust. “Either we’ve used it, or we have recommended it for other pets that have done really well with it,” Karasinski says. “Clients trust that what we carry is what we recommend.”

Train the Team

Front desk team members are the first to greet clients when they come in and the last to talk with them before they leave the building. That means they’re the most likely to engage in discussions about retail, Karasinski says.

For example, as a client is checking out, the front desk team member might say something like, “Oh, it looks like the doctor recommended this product — let me show you where it is,” she says. Or, “I already pulled this product and it’s sitting here for you.”

When new employees start, Karasinski asks them to spend some time in the retail space and “get their eyeballs on” the products. Then it’s quiz time. “I’ll pull up something in the computer and ask them to go find it and tell me about it,” she says. “Then vice versa — I’ll grab something off the shelf and bring it to them and say, ‘Here, can you find this?’ and have them pull it up in the computer. It’s very interactive and seems to work!”

Make It Profitable

Arrow Veterinary Clinic uses the Vet2Pet app (vet2pet.com), which features a built-in loyalty program that Karasinski says made a major impact on retail sales. Clients receive a “stamp” for every $100 they spend, and once they have enough stamps they can receive a reward such as an account credit, nail trim or other freebie.

“If they have $90 worth of services and need $10 more to get to that $100 mark, our staff can easily say, ‘Hey, look at our selection of products in that price range,’” Karasinski says. “This gives clients an opportunity to buy something they might have gotten anyway, and they’re reaping a reward for getting it. It makes it very easy for us to uptick that appointment, and it doesn’t make my staff feel like they’re selling something — they’re doing them a favor by helping them reach the goal. If they say no, it’s not a big deal!”

You Can Do It Too

Karasinski would encourage all veterinary clinics to take a closer look at retail — but keep it small at first. “Any retail is an added value to a service you’re already providing,” she says. “If you hone in on what’s important to your clients, doctors and staff and make those items available, it doesn’t have to be a lot of stuff. It doesn’t have to look like the inside of PetSmart.”

In addition to boosting revenue directly, retail gets clients into the clinic more often. “It’s an opportunity for them to come back more than once a year for that annual visit,” Karasinski says. “That’s more foot traffic in your building, it’s more visits per year, and you have a better-established relationship with that person.”

Of course, pet merchandise and over-the-counter healthcare items are just part of a practice’s product revenue picture — the other is in-clinic pharmacy sales. Brian Conrad, CVPM, practice manager for VCA Meadow Hills Animal Hospital (vcahospitals.com/meadow-hills) in Kennewick, Washington, wants more clinics to fight for this income. It’s not even about profitability, he says. Carrying the products you recommend is in the best interest of clients and pets.

If veterinary professionals are walking the exhibit halls at conferences, talking to drug manufacturers and figuring out which options are best, why do they concede those sales to an online pharmacy or Walmart? Or, worse, take the chance that their client will purchase something other than what the team recommends?

“We’re already doing all the legwork, and then we don’t have the products we’re recommending? It drives me crazy!” Conrad says. “Clients are going to get something online that’s $6 for six doses, and it’s poison!”

Sure, Conrad has heard the “We’re not a warehouse” argument. No hospital has the space to stock every product a doctor might mention in a year’s worth of appointments. But if you run a few reports in your software and figure out which items have the highest turnover, you can figure out which ones to carry. “With proper inventory control, you can stock pharmacy products whether you’re a 1,200-square-foot hospital or a 12,000-square-foot hospital,” Conrad says.

Gather the Doctors

The first step, Conrad says, is to get the doctors in a hospital to agree on one or two product lines to recommend and carry for a particular condition. “We have a philosophy of ‘One focus, one line, one message,’” Conrad says. Once doctors agree on which those will be, team members are trained on those products.

Get Team Members on the Same Page

Conrad doesn’t allow manufacturer-sponsored lunch-and-learns unless the practice’s leadership has already agreed to carry a product. If a company offers to pitch a new product to the whole team, he asks the rep to meet with the medical leadership first. Once they’re on board, training goes to all employees. Likewise, Conrad won’t accept free product unless it’s already part of the practice’s protocols. “It happens all the time, where the client asks a team member, ‘What do you use for your pet?’” Conrad says. “If the doctor recommends product A or B, but the team member uses product C because they got it for free, that does not send a good message.”

Conrad likes to take a proactive approach by asking pharmaceutical sales reps to meet his team’s specific needs. Instead of hosting a meeting for 40 people, he might ask a rep to sit down with his new receptionist to train her on a product line, or hold weekly meetings to educate four or five team members at a time after a new product launch. “Pharmaceutical sales reps are super open to doing anything we ask,” he says. “They’re an underutilized resource, but they need help being creative.”

Make the Recommendation and Have the Product Available

Once the team is trained, it’s time to educate clientele. With exam room conversation time limited, Conrad says he tries to get the message distilled down to a few bullet points or a 20- to 30-second talking point. “And if the client declines, that’s fine,” he says.

The final step is to have the product available so the client can take it home that day, Conrad says. In fact, this is so important to Conrad that he makes a guarantee to clients: “If we’re ever out of a product, we’ll deliver it to your house for free.” The policy encourages good inventory control, plus most clients say the service is unnecessary, although they’re impressed by the offer.

The bottom line, Conrad says, is that most veterinary hospitals invest too much time in training and messaging for someone else to benefit from the product sale. Granted, the days of 150% or 200% markups are gone. You may only be able to increase your cost 35% to be in range of the competition. But for Conrad, as long as there’s positive cash flow on product sales, he’s happy, because patients are getting what they need. Plus, at year-end, that 10% to 15% of extra profitability from pharmacy income could pay for discretionary items like continuing education for staff or upgrading an ultrasound machine.

“We need to stop being so nonchalant about losing our pharmacy sales,” Conrad says. “At the end of the day, I’m doing what’s best for the pet and the client. That’s why we got into this business.”


The Fur-Baby Generation

Millennials dote on their beloved pets with the same attention previous generations lavished on their kids

Move over, baby boomers and Gen X-ers. A recent report says that millennials represent the largest portion of pet owners in the U.S.,1  with three-quarters of them owning either a cat or dog.2

The American Pet Products Association estimates that by 2021, $75.38 billion will be spent on pets in the U.S. every year.3 Millennial dog owners spend $1,285 per year on their pet, or as a group, $67 billion annually. Cat owners in this generation spend $915 per year individually and $33.5 billion a year as a group.4

“Clients will always count on you for pet care advice and as a voice of reason,” writes Eric D. Garcia, an IT and digital consultant, in Today’s Veterinary Business. “Clients need you to be the resource for information on all things related to pet care.”

To attract the buying power of millennials, take a look at their buying behaviors.

Pet services, including grooming, boarding and training, has been the fastest-growing product segment under the industry umbrella in the past five years.1

The pet supplies segment is also growing. Halloween costumes for Fido and Fluffy, fancy collars and expensive toys? You bet. In 2019, sales in this category were approximately $4.54 billion.1

You won’t win on price alone, however. The key to being successful with younger clients is to build trust and educate them on products and services that make sense for their pets — the value you add is where you and your team win this market segment.

References

1. Roberts R. Pet Industry Growth, Statistics & Trends 2020: A Definitive Ecommerce Marketing Report. commonthreadco.com/blogs/coachs-corner/pet-industry-market#pet-ownership. Accessed June 10, 2020.

2. The Future Is Pets: Why Millennials Have the Top Spot as Pet Owners. ovrs.com/blog/pet-owners. Accessed June 10, 2020.

3. Pet Industry Market Size & Ownership Statistics. americanpetproducts.org/press_industrytrends.asp. Accessed June 10, 2020.

4. Lintz C. How Millennials Spend on Their Pets. petbusiness.com/How-Millennials-Spend-on-Their-Pets. Accessed June 10, 2020.

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