Karen E. Felsted
CPA, MS, DVM, CVPM, CVA
Take Charge columnist Dr. Karen E. Felsted is the founder of PantheraT Veterinary Management Consulting. She spent three years as CEO of the National Commission on Veterinary Economic Issues.Read Articles Written by Karen E. Felsted
Swamped with patients during the pandemic, many veterinary practices weren’t interested in drumming up additional business. However, that wasn’t the case everywhere, and when the next recession comes, boosting revenue might become a more significant issue, even at busy hospitals. So, how to bring in more business? By first analyzing where the problem really lies.
Ask yourself what’s happening that you think can be fixed with more business. If your profitability is lower than you’d like, more patient visits might not be the only or best solution. Are the declining profits due to higher expenses? If so, what’s driving the costs higher? Is it inflation or poor management? Areas to review include your inventory, the efficiency and productivity of your doctors and other team members, and the return on marketing.
If the desire for more business is due to fewer transactions, declines in revenue and new clients, or poor client retention, the reasons might include:
- A negative value proposition.
- High prices.
- Not enough doctors and other staff.
- Poor communication of recommendations.
- Substandard client service.
- Bad marketing.
Your value proposition summarizes why a pet owner should pick your practice over another. If your management team can’t succinctly define the value proposition and explain it to pet owners in person and through marketing, then clients certainly won’t see it.
One way to define your value proposition is to compare your practice against local competitors. Most people deciding where to take their pet can’t judge the quality of the medical care, so they look at convenience and services.
Consider what is unique about your practice. For example, are you accredited by the American Animal Hospital Association? Do you offer services that the others don’t, such as acupuncture or homeopathy? Do you have pay-by-the-month wellness plans? All those factors might be points of difference. The more uniqueness, the more likely pet owners will choose your practice, assuming you have what they want.
What Makes You Special?
In addition, review how your practice and the others are similar. These are points of parity. It’s vital to understand points of difference and parity when defining your value proposition. For example, if every practice in your community is open until 5 p.m. Saturday, promoting that fact has limited value because a potential client can go anywhere. Instead, focus on what is truly different about your practice.
If nothing’s unique, do something about it. What new services could you provide? How can you make a client’s visit more convenient and distinctive? If your practice isn’t special, pet owners might simply search for the lowest prices.
Next, honestly evaluate your practice from the client’s viewpoint. For example, do pet owners enjoy the experience? If they regularly must wait after arriving for a scheduled appointment, or their calls aren’t returned, or they find errors in their invoices every time they check out, no wonder your business isn’t growing.
Finally, think about getting rid of toxic employees and fixing your systems. There’s no point in trying to attract new clients if their first visit is destined to be terrible.
The Fee Factor
Understand that prices can’t be separated from value. It’s not enough to say, “The average practice charges $350 for an abdominal ultrasound, so we will, too.” Some practices can charge $400 because they communicate well, show a lot of empathy for pets and their owners, see clients on time, and follow up promptly. Other practices have trouble charging $200 because the service experience is poor.
Clients don’t care what a service costs you, so don’t use inflation as an excuse for price increases that aren’t accompanied by value. Value and price must correlate.
If a core issue is staffing, are your transactions declining because you don’t have enough doctors? While almost every U.S. business has a hiring problem, some deal with it better than others. Those that continue to find and keep employees enjoy a great culture, pay well, and demonstrate genuine concern and respect for their team members. How does your practice stack up?
Communication is critical in conveying value and encouraging pet owners to accept your recommendations. It’s not enough to tell a client what a pet needs. The advice needs to be clear and focused on the benefits of importance to the pet owner. Words matter. What will the owner of an itchy dog think if a veterinarian says, “There is allergy testing if you really want to do that,” or a technician says to the owner of a pet with bad teeth, “At some point, you might want to get this dental done; it’s just a suggestion”? The client probably won’t follow the recommendation because its importance to the pet’s health isn’t crystal clear.
If business is slow, marketing might be part of the problem. Posting a few things on Facebook and hoping that’s enough isn’t sufficient. Communication to current and potential clients needs to target the audience you want to attract and emphasize your practice’s unique aspects. Spending a lot of money on marketing and not getting the desired results is easy. Instead, work with an expert who can help you design an outstanding marketing plan and measure the results.
A practice can do many things to increase business, but not all will be right for every hospital. Identify what is holding back your clinic, fix the internal problems and reach out to the clients you want to see.
BY THE NUMBERS
According to a Veterinary Hospital Managers Association survey, 22% of practices raised the price of non-shopped services by an average of 10% or more in 2022.