Growth or decline: What makes the difference in a veterinary practice?

Growth or decline: What makes the difference in a veterinary practice?

Here’s a hint: It’s not the economy, clients’ desire for good care, or your level of competition.

Mike Paul, DVM

Depending on what you read, we are either in need of more veterinary schools or dealing with an overcapacity of veterinarians. We’re either seeing an increase in pet ownership or a decline in pet ownership, serving a greater number of clients or fewer clients than ever. The failings of our profession are likely to be caused by any or all of these issues; it just depends on the color of your glasses.

The way we interpret veterinary industry studies is also subject to our perspective—whether it’s in line with that of organized medicine, manufacturers and suppliers, or deans and legislators in states that “want” a veterinary school. These studies may have statistical validity, but hey, statistics are like a bikini—what they reveal is interesting, but what they conceal is critical.

In the late nineties many practices were economically stagnant. The American Animal Hospital Association (AAHA) and the American Veterinary Medical Association (AVMA) commissioned a study that eventually led to the formation of the National Commission on Veterinary Economic Issues, a group focused on convincing veterinarians to charge more for their services. Unfortunately, the focus on fees said little about perception of value and nothing about client experience. In many cases the cost of veterinary medicine rose but there was little change in the service provided.

Studies upon studies

Perhaps as a result, 10 years later the industry again found itself in an economic backslide. A growing number of discount provider options, the unexpected impact from the Internet and online pharmacies, improper implementation of vaccination guidelines—all of these factors allowed practices to hit a wall. Enter the 2011 Bayer Veterinary Usage Study, which pointed out such factors as a difficult global and U.S. economy, expanding competition from an increased number of care providers and services available, and greater utilization of the Web as a source of information. These factors were easy to understand. We could wring our hands, hope for a turnaround in the economy and take solace in the knowledge that everyone was in the same boat.

The Bayer study also pointed out three client-driven factors, which included inadequate appreciation of the value of routine preventive health care, increased sensitivity to the cost of veterinary care (i.e., “sticker shock”) and poor utilization of feline healthcare services. Each is an actionable item, but the only one that seems to have caught on is the utilization of feline services. Organizations like CATalyst and the American Association of Feline Practitioners (AAFP) have inspired many practices to make an effort to improve feline care. While veterinarians are certainly not being inundated by cat visits, the numbers are improving. Change is coming, albeit slowly.

Every individual in every type of practice in the industry has been exposed to these same realities and has had opportunity to respond. Every practice was, to one degree or another, looking down the barrel of the same gun. And yet while some practices quaked and even collapsed, others prospered and grew. Why? Here we are, years later, and another study—this one sponsored by the American Animal Hospital Association (AAHA) and IDEXX—has demonstrated some very significant differentiation.

The State of the Industry presentation of the AAHA/IDEXX study was presented at AAHA Nashville. It focused on practice growth and client bonds and reported that in 2013, 27 percent of practices experienced a significant decline in revenues of 4 to 9 percent of their business. That is simply not sustainable. The most successful 23 percent of practices grew 10.7 percent. Most practices stayed basically flat. Interestingly, successful practices were subjected to the same economic and societal realities as less successful practices. Unemployment rates within a region were not so dissimilar. Geographic location, size of practice and even client demographics were shown to be relatively similar from upper Manhattan to Manhattan, Kansas.

Breathing life into the industry

So what distinguishes growers from decliners? The State of the Industry presentation did reveal that to be special we must be exceptional. According to the report, the most important factor in success is not only recognizing the bond owners have with their pets, but also honoring the bond in every aspect of our service. Surveys conducted for the Partnership for Healthy Pets organization indicate that pet owners and veterinarians want the same result—to provide care in the best interest of the pet. We are simply not stating the truth when we bemoan the fact that clients don’t want good care. They do not want what they do not value, and they cannot value what wedon’t assign value to! We must make certain that each and every member of our staff considers himself or herself a partner in the health of each pet. Staff should communicate the value of your service, not the price.

As the saying goes, “Those who fail to learn from history are doomed to repeat it.” That sentiment underlines my belief that there is nothing really new, and we tend to keep repeating our mistakes as individual practices and as an industry. We continue to do what has not been working instead of reinventing the client experience and breathing life into the industry.

Putting everything in place

Mise en place is a French phrase that means “putting in place,” and it’s most often employed in terms of cooking—that is, setting up your ingredients prior to starting a recipe. As someone who enjoys cooking, I can tell you that arranging ingredients makes things much easier, and failure to plan ahead makes even the simplest task a challenge. In a sense, our profession would benefit from a French cooking lesson. Why not try forward-booking office visits and services so that pet owners know that you’re looking ahead? It may be a real shift in thinking to schedule an appointment three (or even 12!) months in advance, but as a successful entrepreneur once told me, “There is an urgency of now.”

I believe that having good clients is the key to a successful practice. It is easy to blame clients for our problems, but in reality, we choose the clients we have. Good clients want veterinarians who want what they want—the good health and well-being of their pets. There is no “secret ingredient” in successful practices that’s missing from struggling practices—except for a commitment to work and follow through on the things we claim to offer. There is no substitute for exceptional patient care and charging appropriately for that care.

Perhaps more importantly, we must learn to provide exceptional customer care. We must work to make the exception the rule by focusing on the importance of the bond that exists between people and their pets. We must communicate our commitment to that relationship. Now, I know we all do these things some of the time, even most of the time. But the key is to make every customer feel our commitment, every time. We need to be sure that clients get in their car thinking not, “I got what I paid for” but instead “I got what I wanted.”

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