Thomas E. Catanzaro, DVM, MHA, FACHE, Diplomate American College of Healthcare Executives
As you develop pricing strategies, make sure you evaluate the practice's market segment based on the value your clients place on these factors:
Quality of services
Loyalty to practice and staff
Fair fee schedule
Fair Fees vs. Appropriate Fees
The term 'fair fees' has a component of community standards, usually doctor-centered fee schedules from linear practices. In fact, since most practices have "borrowed" their fee schedules from another practice in the owner's sphere of influence, 'fair fees" seldom describe appropriate fees. A fair fee would provide an adequate net income to pay staff appropriately with their commitment and dedication, as well as provide a reasonable return on investment and salary for the owner(s). We are not there yet.
Appropriate fees also means charging less for a staff delivered service (such as dental cleaning, as experienced at their human dentists) than a doctor-delivered service, it provides more income in a staff-leverage healthcare delivery system, and it allows better use of the client's discretionary income, enhancing Pet Parent satisfaction.
Using the above four factors and a life style client segment profile, you can position your veterinary practice as a high quality but reasonably priced provider of pet healthcare, a lower-priced provider with equitable quality, or a number of other options. No matter what tactic you choose, the scenario hinges on the ability of your clients to make informed choices. Unfortunately, it is often clear that veterinary clients do not have the necessary information to compare provider prices and performance.
It is critical that a practice develops their team's communication skills to increase the client's veterinary I.Q. while they try to bond the client to the practice. When a staff member has helped a client understand the factors that go into quality care and fair fees, misrepresentations by others will become glaringly clear. As the veterinary I.Q. increases, it will be essential that we respond to the client with better information and a clearer set of options in pet health care.
Taking the Initiative
At a long-standing practice in PA, we discussed how to address price shoppers with an initiative approach, and the practice team immediately saw the benefits, so implementation became easy. The imitative was a simple question, "Do you have pet insurance?"......and the follow-up statement was equally simple, "The Pet Insurance programs we recommend have wellness riders that give et parents about $2 back for every dollar of wellness premium they pay."
Then the client relations team continue, "We also take Care Credit, a pet credit card with no interest or carrying charges for the first 90 days, so the same as cash benefit allows the insurance reimbursement to be received before the first credit card payment is due".
"We believe our clients need to know what third party payers are willing to share the risk of funding access to the miracles of modern veterinary healthcare programs. And the price quote you want is wellness care, which means you can access the health insurance before you access the care."
At this point, client relations specialist is now a trusted confidant, and the communications become two ways (level 3 of persuasive marketing). This is the "how it works here at this practice" phase, so the question is simply, "Do you want an appointment for this week or next?"
Increasing client veterinary I.Q. will also make it important for a practice staff to develop effective communication skills. The future is ours to harvest, so a savvy practice leadership team knows they need to develop their training efforts now to meet the needs of tomorrow. It has been shown time and again that a veterinary practice's market niche lies in well-informed veterinary consumers, their perceptions become an important factor to manage for the practice image. Quality is relative, as are perceptions, and both can be managed by a well informed and trained caring veterinary healthcare delivery team.