Once upon a time, you could be a successful vet just by being there. The geography was your friend and as estate agents say: Location, location, location. You found premises, usually a building with a historical link to animals, such as a farriers, a yard, or a big townhouse in the centre of town that was always the vet’s and you screwed your plate to the front door. Away you went. Since the turn of the century though, the number of vet sites has more than doubled in the UK1.
This explains why the new generation of vets is dislocated from the older generation of vets. A lot of retiring vets are property tycoons, not veterinary tycoons and in the current property market, that’s not a viable route to financial success for young vets.
Note: For the purposes of clarity and to twist your thinking a little, I’m going to only refer to clients as consumers in the rest of the blog.
Well, aside from a few rural locations where geography is the limiting factor, that’s not how vet businesses thrive today. Various studies have shown that there are lots of factors affecting how consumers pick their clinic2,3.
Here are the key ones:
- Recommendation – word of mouth mainly, but increasingly online reviews.
- Local to them – why would they want to travel when the world is now delivered to them?
- Relationship with the vet. We work in a service industry after all.
Interestingly clinical skills, competence and price aren’t usually in the top 5 reasons and critically; the consumer is not vet loyal. Consumers may frequent several local vets, for different reasons or with different animals. They almost certainly buy a chunk of the animal care products, food and medicines online.
So how do you become a successful veterinary business when the density of clinics is getting greater, access to veterinary care is simpler and communication is getting easier?
There are three routes any business can take to win consumers; you just need to decide which works best for you.
1. Be a low-cost provider
In a highly charged financial environment, post recession, pre-BREXIT and with the internet now creating open book pricing comparisons, a low price offering will always win a group of consumers. It can be done well; just have look at the success of the not-for-profit practice Animal Trust.
However it’s a challenging financial model for clinics to adhere to and remain profitable. If your service to product sales ratio is worse than 80:20, then you have a big risk. You’ll be too reliant on margin generated from sales and it opens you to risks of pricing fluctuations and on-line competition. If you have the time to manage your pricing daily, the supplier relationships to ensure negotiated pricing wins and a relentless focus on cost management for the service elements, then great; crack on.
2. Have a differentiated proposition
This is the holy grail for most retailers and product manufacturers. Invent a new widget, gadget or service. In the supply of veterinary services as we know it, having a differentiated proposition can be very difficult though. The public has preconceptions of what going to the vet means and it can be difficult to surprise and delight a consumer. The proposition could change with telemedicine and as yet unknown services, so if you are an innovator, go for it!
It’s possible to offer a unique service to the consumer, but not at the level that most vets think. The thinking goes something like this: Wouldn’t it be great if we had ultrasound or CT or a new dental machine? That means we could offer service X, Y or Z and we’d be the only clinic around here with those facilities.
That’s flawed thinking though, because owners don’t think in terms of the medical facilities you have. Remember the reasons consumers choose a practice? Clinical skills and competence aren’t high up the list. Consumers are much more oriented to the way you care for them and their animals. Don’t forget, most of the time we’re talking about family members not animals.
You could offer a differentiated proposition in terms of how consumers pay for veterinary services, for example, a pet club direct debit scheme, payment plans or credit terms. That’s great for your cash flow and in theory great for the consumer too because you can bundle services and products very economically. But again, it’s flawed thinking because price isn’t in the top factors defining the choice of vet.
3. Deliver exceptional service
So if price and differentiation are difficult or not high in the vet consumer’s mindset, then the only way to be successful has to be in the delivery of exceptional service.
That makes sense doesn’t it? If we think as consumers and all else were equal, we shop where we get the best service, we eat in the restaurants with the most engaging waiting staff and we buy from those online stores with the best user experience and delivery services.
And so it must be for vets as well. All the clinical skills and medical facilities count for nothing unless we recognise the special relationship between people and their pets and we can create a special relationship between that consumer and ourselves. How can you surprise and delight a consumer? If you can achieve this, then word of mouth will become your biggest driver of new consumers, in person or online.
To steal a phrase from a colleague’s practice, they won’t care how much you know, until they know how much you care.
Here at the VBC we can help you review your current offering. We’ll be challenging but at the same time nurturing, because you’ll need to make some big decisions. Working as partners in marketing, social media and business development, we’ll help you build, develop and implement your business plan. Any of the three routes to success can work and at the end of the day, it’s your plan.