Consumers have many choices when it comes to choosing veterinary practices. Veterinary medicine is getting more competitive and clients are expecting more out of their service providers. While getting new patients in the door is essential in helping practices grow, it’s just as important, if not more so, to focus on maintaining your existing client base.
Keeping your PIMS up-to-date and in line with current consumer trends can help practices retain clients and add to their annual revenue all without adding a single new client. To highlight the importance of client retention and why client churn matters, our CEO, Mark Olcott, DVM, MBA, shares his thoughts on how practices can implement technology to help grow their business and keep their existing clients coming back.
Q: What do you think the biggest challenge is in growing veterinary practices?
A: The biggest challenge in growing veterinary practices is breaking through all the clutter in the lives of the modern pet owner. In our hyper-busy world, it’s very easy for consumers to put things off. They think about what they have to do today. And in the world of veterinary medicine, pet owners sometimes put off important routine wellness care. They look at their pet and they seem fine so they don’t feel a need to bring their pet into a practice. So they skip over an annual exam and wait for their animal to get sick.
So veterinary practices need to find a way to break through to the client. Offering special discounts or highlighting a new technology isn’t going to help practices do this. It doesn’t motivate pet owners to bring their pets in. It creates a transactional relationship when instead, practices should be looking to have conversations with pet owners about things like nutrition and behavior. Get the pet owner in, let’s do an exam, let’s have a conversation. Let’s talk about where your pet is at this stage of their life.
Q: What trends do you see in veterinary practices that add value to existing clients?
A: It’s important to look at consumer trends. The average consumer will open a text message within 90 seconds of receiving it. In fact, 89% of consumers say they prefer to text businesses for inquiries, services, or appointments. This presents an opportunity for veterinary practices to leverage technology to increase client compliance, improve communications, and increase staff efficiency. Consumers have gotten very used to getting things on their own terms. Ranging from physical items to immediate answers. They turn to Dr. Google if they have a question about their pet. But they shouldn’t have to. For example, almost all pediatrician offices have on-call nurses where a parent can call and describe what’s going on, and the nurse will give them medical advice. It’s an advantage of having a relationship with a practice rather than just going to an emergency clinic. Veterinary practices can adopt similar tactics and they can do it on the client’s terms. If clients are busy and don’t have time to talk to a professional in the middle of their workday, they can text the practice and get advice.
Q: Why does client churn matter?
A: A major, almost existential threat to veterinary practices is internal churn. And by that, I don’t mean pet owners are going to switch practices. Competition is stiff, and while practices should consider what’s drawing clients away from their practice and toward others, they should spend far more time focusing on losing clients to the ether of noncompliance. Practices could easily double their revenue if they did a better job of preventing their clients from becoming noncompliant.
Think about it in terms of accounts receivable for a business. If someone owes the business money and the bill is 12-18 months past due, chances are they’re not going to pay you. Clients adopt the same behavior. If they’re 18 months past due for an appointment, they are not going to come in until they notice a problem with their pet. And if the vet is closed when the problem arises, then they’ll take them to the emergency clinic and pet owners will wonder what the point of having a general practitioner is. Practices need to better educate their clients so that pet owners understand why they need to continue to bring their pet in for routine care. The general practice needs to keep their clients aware of the needs of taking care of a pet. Practices struggle with relevance because practices haven’t done a good job of educating clients about pet care. They’ve done a good job making sure that their clients are aware of the need for pets have all their vaccines up to date, but owners can tend to think that if the vaccines are up to date, then their pet must be fine. Barring a problem, it could be years before a pet owner comes in with their pet.
Q: What is a good churn rate?
A: Ideally it would be negative. If you do the math, it’s possible to have a negative churn rate. Not only do you not lose clients, but your clients bring in new clients. Realistically, a good goal should be for a practice to have zero churn: where they’re not having a net loss in clients. A more typical number we see in practices before they start working with us is about 30%. I mean, what business can survive if 30% of the customers that come in never come in again? In our industry, we’ve been able to get away with that because there hasn’t been much competition. But it’s easy to fall to the bottom of the priority list. And when you multiply that by a couple of thousand clients then the amount of lost revenue can really add up.
Q: How can practices keep up with consumer expectations?
A: Consumers think differently than veterinarians and practice owners when it comes to what they get excited about and what motivates them to a particular service provider. Veterinarians and practice owners tend to get excited about things like X-ray machines, but it’s not what the modern consumer thinks is important. Practice owners think that a great website or a social media presence, or a high tech ultrasound machine will help them gain clients, but it’s the client experience that keeps them coming back. If their client experience is dated, or if there is a lot of friction in making an appointment or if the checkout process is a crowded nightmare, then busy clients won’t be in a hurry to come back. The way that consumers use phones now ironically shifts them away from using it as a device that makes phone calls. Practices should adapt to the way consumers want to communicate. Consumers have other options. They can always go to Google and get information, even if it’s not the right information. So practices need to make their tactics really client-centered. What is the experience at check-in and checkout? That’s where the battle is won or lost. This new type of consumer wants to see more than just doctor credentials. They know that their vet is qualified. They want a reason to keep coming back.
Q: How can practices stop their clients from leaving to go to another practice?
A: A practice is most bonded with a client when that client is walking out of the exam room. If you have a positive experience with a client, but then wait 364 days before you reach out to that client again, then that positive experience is long forgotten. People have short memories. Practices should educate their clients about pet care and provide value outside of “just” being a place to take your pet to when they are sick.