Are you a premium practice?

I recently participated in a discussion, sponsored by a veterinary pharmaceutical company, that focused on a consumer behavior called "trading up." The idea, as it's articulated by the authors of Trading Up: Why Consumers Want New Luxury Goods... and How Companies Create Them (Portfolio Hardcover, 2004), goes like this, "Consumers are now willing to pay a significant premium for goods and services that are emotionally important to them and that deliver the perceived values of quality, performance, and engagement. But in other categories that aren't emotionally important, they become bargain hunters."

In other words, most of us generally work hard and endure a lot of daily stress. So we reward ourselves with premium products from Starbucks, Ben & Jerry's, Samuel Adams, Victoria's Secret, BMW, and more.

As veterinarians, we're in a "trading up" profession. This is supported by the fact that the pet population has only grown 1 percent to 2 percent a year over the past decade, but spending on pets has increased about 8 percent per year. The take-home lesson: Pet owners will spend top dollar on their pets' health care—but they need to feel they're getting a good value. Provide memorable care to your clients and they'll feel that the value matches the price.

Dr. Jeff Rothstein

Veterinary Economics Editorial Advisory Board member Jeff Rothstein, DVM, MBA, is the president of The Progressive Pet Animal Hospitals and Management Group, which owns and operates hospitals in Michigan and Ohio.