T. Jackson, CPA
I would like to begin this discussion of delivering perceived value to veterinary clients and support employees, by making a very simple statement; the veterinary practice which you own, manage or are employed by, is a representation of ownership, support staff and their combined relationship with the clientele. The level of veterinary medicine being delivered is representative of the owner and support staff’s commitment to a joint veterinary medical delivery philosophy. In turn, the practice’s clients are largely comprised of those individuals who accept the practice’s medical philosophy, services available and fees charged.
On arrival at the veterinary practice, new patients should begin to enjoy the service experience from the parking lot through the reception and intake and continuing consistently through the professional and compassionate health care delivery and persists through paying the invoice and departing the practice facility. Those who don’t experience a positive reaction, will leave shortly seeking a practice that best represents their own preferences in veterinary care and service.
What makes this viewpoint so applicable to the veterinary industry is that the business aspect of veterinary management interacts with a special emotional bond between humans and animals in the delivery of the veterinary service.
To effect change within an industry significantly influenced by emotional relationships, it takes a full commitment of the whole veterinary practice team. If one is not satisfied with the financial performance of their practice or there is a negative impact arising from increasing competition, it is not a simple matter of making a change like decreasing professional fees, but rather, a real shift in the practice’s health care delivery philosophy.
“A shift that is not just adopted by the doctors themselves, but rather by all the practice employees in combination.”
In considering how or what shifts have to take place, let’s first address three very important factors about the veterinary industry that are influencing today’s market place.
In particular over the last fifteen years, the veterinary industry has evolved, but when one looks at the individual practices, I am going to suggest there has been no significant differentiation from one practice to the next. Most companion animal practices continue to be owned and operated by one to two veterinarians, practicing from premises comprising of 1,500 to 2,500 square feet, offering similar treatment plans, vaccinations, soft tissue surgery, dentistry, prescription pet food and of recent, undefined “wellness examinations.” The doctors and staff wear uniforms or casual clothing with little or no branding and an over-abundance of “stock websites” which barely describe the veterinary practice and their defined veterinary health care delivery philosophy.
How does the pet owner choose their veterinarian to preserve their companion family member’s health and who is going to make their pet better when it becomes sick or injured?
This environment of little differentiation is referred to in economic terms as a “fractured industry.” To the consumer, every vendor is viewed as providing essentially the same service, from roughly the same type of building, using the same equipment and being assisted by the same type of people. In this type of economic environment, the client has no other choice but to make their decision based on price, which reacts with downward pressure on fees. As competition increases, as we have seen, the intensity of downward pressure on fees also increases.
What do veterinarians sell?
The question, “What do veterinarians sell?” is a favorite question I ask most veterinary groups I talk to because, invariably the common answer is “veterinary medical attention, medicines, drugs, prescription food, etc.,” and yet, in my view, nothing can be further from the truth. The average pet owner does not understand what the animal is trying to communicate to them about their wellbeing, health or how much pain they may be experiencing. Thus, the client is placing their trust in the veterinarian to correctly diagnose and interpret their pet’s condition and health needs. Most importantly, the client is looking for expert medical leadership in assisting the pet owner in how best to medically treat the animal, make them well again and stop hurting. In very simple terms, veterinarians sell a relationship based on trust and leadership.
A relationship based on trust and leadership is founded on effective communication, and when I see veterinary practices enjoying consistent revenue growth, I consistently see effective communication patterns being enjoyed throughout the practice.
Who is the client?
One cannot establish a relationship and effectively communicate with another, unless and until they have gathered information about who the other person is. In the veterinary industry, statistically we know who the client is and which can best be described as follows:
- Aged 35–55
- Career minded
- Family banker
- Health care supervisor
Knowing and understanding the client makeup is important to get to the hello stage, however when it comes to the relationship building, one must build the relationship based on inquiry into and understanding of the client expectations as well as clearly communicating veterinarian expectations of responsible pet ownership.
Once the trust relationship between the practice and the client has been established through various actions and effective communication, the ongoing doctor-client relationship moves forward with the perceived value flowing from the client’s experience in the delivery of veterinary health care and their interaction with the practice facility, the support staff and the veterinarian themselves. When the client leaves the building with bill in hand, there is an immediate assessment of perceived value received. If perceived value has been “enjoyed” in line with the invoice, the client will return with client compliance increasing in line with frequency in client visits and naturally average transaction fees.
Delivering perceived value diminishes clients’ focus on fees, increases compliance and serves as the basis for future referrals.
What is perceived value?
Perceived value is the customer’s opinion of their experience with a product or service. It may have little or nothing to do with the product’s actual market value but rather “value” in this instance depends entirely on the product’s or service’s ability to satisfy the customer’s envisioned service requirements.
Once the consumer has recognized receiving perceived value, the trust level increases dramatically in turn motivating the client to return and accept health care recommendations. In short, the client diminishes their “fear of fees” and begins to relax knowing they and their pet are receiving the attention they require to maintain the veterinary relationship.
So, let’s stop for a moment and go back to where we began this discussion. The veterinary practice reflects the collective relationship the owner and support staff share with the client.
If the clinic’s revenue is growing by double digits and the number of active clients in the practice is continuing to increase each year, I would suggest these are two great indicators the practice is delivering perceived value to their clients. For practices where revenue is remaining constant or decreasing, unfortunately the consumer is reacting to the lack of delivering perceived value as it once enjoyed. Perhaps there has been a shift in the client base and the practice didn’t shift in a timely fashion. In order to continually meet the ever-changing expectations of the client, the veterinary practice has to continue to work on their client/practice relationship. “Working” in this instance, means maintaining an ongoing communication with the client; continually assessing their experience in the delivery of veterinary medicine, and reacting in a timely fashion in order to keep the experience innovative and fresh.
Perceived Value Inventory List
Increasing perceived value begins with knowing who the client is, and what is important to them.
1. Begin and continue the ongoing practice analysis by completing various (receptionist) surveys of who your clients are:
c. Computer savvy
d. Career orientated/work hours
e. Family pet, children replacement
f. Working hours/days off
g. Their relationship with their pet
2. Continually examine the physical space confirming the front entrance, reception, examination rooms, bathrooms exceed the expectations of the client.
3. Do reception staff meet the expectations of your clients and is there a “relationship” with these integral members of your staff?
4. Does your reception reporting system provide data with regards to how many telephone calls are received at various times during the day? Do reception staff exemplify the medical delivery philosophy representing the veterinarian and the support staff?
5. Does your reception have a reporting system to capture any negative reaction to the services? Is there a process to address any social media reviews (particularly negative ones)?
6. What discussion topics do reception staff engage clients with to confirm the client’s experience?
7. Does your practice know the top five reasons why clients visit the clinic and is there an ongoing attention to these five service delivery aspects?
8. How often does your practice extend a “wow” experience to clients as opposed to offering price discounts?
9. What is your client’s compliance rate with respect to recommended medical procedures, diagnostics and pet nutrition?
10. What is your practice’s client screening process? How many clients do you refuse or terminate in a year?
How can your practice increase perceived value?
1. New client interviews
2. Animal owner’s manual
(What can the owner expect with respect to health care for their animal, and how can they reduce their risks.)
3. Confirmation of practice “health care philosophy”
(What you do and do not believe in):
a. Alternative modalities
c. Prescription food
d. Raw food
4. Reception area should be treated like the living room of the client, from fresh decorating, furniture placement, color and noise. Fresh flowers and current “short story” magazines, medical resource area, including Internet links, library books, etc., add to the “experience” with your practice.
5. Treat surgery as if you are doing surgery on the client’s child, including written instructions, assignment of staff member, ongoing communication.
6. Monthly “new client” open house meetings
Jim Rohn, an internationally acclaimed motivational speaker once said; “If you don’t like the life you are living, change it and you, yourself, will change. If you don’t like financial fortunes of your veterinary practice, change what you have been doing, and your practice, itself will change.”
Robin Sharma, another internationally acclaimed leadership speaker suggests, improve your business every day by one percent (1%) and after a year you would have improved your business by 365%. What would your veterinary practice look like if you were to improve it by only a hundred percent (100%)?
Delivering Value to Employees
In today’s employment market, particularly within the veterinary industry, one of the biggest challenges is attracting and retaining great support staff. Employee costs within a veterinary practice approximate between twenty and twenty four percent of gross revenues and when there are ineffective staff employed, the actual cost is astronomical! The average number of years worked for a practice by a qualified animal health technologist is five years. Here’s what Shawn McVey of McVey Management Solutions says:
“How your staff feel about working at your practice can impact your business performance by 20–30%.”
“Roughly 50–60% of how employees feel about the practice can be traced to the actions of one person…the leader.”
Again, we come back to the topic of leadership that I spoke about in delivering value to the client. Whereas the client looks to leadership in advising the client on how best to medically treat the animal, the employee looks to the leader to inspire them to contribute to the business success. I have not met an employee yet who didn’t simply want to do their best in doing their job. Give an employee opportunity to learn and to enjoy their work in a welcoming work environment, and compensation consideration will rank lower in the list of priorities. Like clients, employees have a perceived value of their working relationship with the practice and it begins with great leadership.
What is leadership?
A book entitled The Leadership Challenge by Kouzes & Posner suggests the following five practices will lead to great leadership and I am going to suggest, by implementing each of these practices, you will in turn improve your relationship with employees:
1. Model the way:
- Set the example by aligning actions with shared values. Great leaders are always asking for help.
2. Inspire a shared vision:
- Envision the future by imaging exciting and enabling possibilities.
- Enlist others in a common vision by appealing to shared aspirations.
3. Challenge the process:
- Experiment and take risks by constantly generating small wins and learning from the experience.
4. Enable others to act:
- Foster collaboration by building trust and facilitating relationships.
5. Encourage the heart:
- Recognize contributions by showing appreciation for individual excellence.
- As the owner and leader, I believe you deliver value to employees by taking the time to determine what employees aspire to achieve and providing inspiration for them to achieve it.
I see a lot of similarities in the inter-relationship between clients and employees. They both come to the business in search of perceived value. In both cases, delivering value rests upon on the developing a relationship founded on trust and leadership and recognizing that relationships cannot exist unless there is open and honest communication.
Respecting and treating employees as if they were clients, will foster a strong relationship between the veterinarian and support staff, which will also improve your delivery of perceived value to the clients and in turn increase revenue and profitability.