Innovative ways to increase profit in your practice

Explosive growth in the pet sector, drastic shifts in client demographics and desires, and a quickly changing landscape of corporate consolidation have led to increasingly intense strain among veterinary practices throughout the country. In the face of escalating pressure to deliver against the rising expectations of clients and staff alike, practices must look beyond traditional business solutions to drive measurable results. Practices that can’t compete on volume—and often lose out in the hiring wars—must find other ways to generate enough revenue to grow their business while also providing a “white-glove” healthcare experience for their patients and clients.

There are two avenues through which clinics can increase profit: by cutting costs or by growing revenue. Although the traditional approach of cost cutting does drive profitability in the short term, for a variety of reasons it is unlikely to lead to long-term, resilient profitability that will give the practice a true competitive advantage. At the end of the day, it’s revenue growth that allows businesses to achieve higher levels of profitability, and revenue growth today is best achieved through the concept of Value Innovation.

Conventional logic vs value innovation

Although many veterinary practice owners believe that revenue growth is best achieved by adding new services or raising prices, these may not always be the best routes to take. In fact, the conventional approach of continually increasing costs without adding value for your customers may price your practice right out of the competition. Likewise, adding new services such as boarding, grooming or acupuncture can be helpful, but they require training, workflow changes, capital expen- ditures and/or additional employees, all of which diminish the likelihood of success of the new service.

Veterinary practices that employ conventional logic—a reactive approach— are only able to compete for an incremental share of profits. Value innovators, on the other hand, are proactive, planning from the outset to dominate the market by focusing their efforts on what customers truly value. In the case of veterinary medicine, that’s convenience, efficiency, and excellent care.

The key is to create a product offering that does not simply increase pricing but instead benefits clients through Value Innovation—providing cutting-edge services that create a better client experience and capitalize on the human–animal bond without having to decrease prices to match the competition.

To add value to the client experience without compromising the core activities of the clinic, an innovative solution must:

• Be easy to set up with minimal changes to workflow
• Add value for the current customer base
• Aim for revenue growth rather than merely cost reduction
• Provide a point of differentiation for the practice

Not surprisingly, app- and cloud-based technologies that connect pet owners with veterinarians online and afford easier access to pet health information are among the smartest investments a veterinary practice can make. By partnering with an established company that can help you provide convenient, always-on services that are easy to implement, a practice can grow revenue without the need for additional capital expenditures associated with other services.

Investing in technology to grow your business

Practices that are considering adding a Value Innovation service would do well to consider PetDesk. This industry-leading platform streamlines communication between veterinary practices and their clients while maintaining a personal touch, thus improving engagement, increasing visits and bolstering satisfaction among both patrons and employees.

Simply put, PetDesk helps pet owners stay current and pet care providers stay connected through a combination of tools, including appointment requests, reminders and confirmations; a mobile app; two-way messaging; loyalty programs; and online reviews. With PetDesk, team members spend less time on the phone and more time helping the people and pets coming into your facility.

To determine the value of PetDesk software innovation, Aaron D. Wallace MS, MBA, DVM, Julia Labadie, MSPH, PhD, DVM, and Aaron Massecar, MA, PhD, conducted a comparative analysis of revenue generated 12 months before and 12 months after implementing PetDesk software in 40 practices across the country. Practices ranged in size and location, with an average of 3.45 full-time veterinarians in each clinic.

The results? Practices that implemented PetDesk software demonstrated an average incremental revenue growth of nearly 5%, not counting organic revenue increases. Furthermore, PetDesk practices boasted a 557% return on their investment.

In a white paper analyzing this study, Drs. Wallace, Labadie, and Massecar concluded that “...based on the data provided on the hospitals in this study, there is a correlation to revenue growth, and a positive ROI should be expected with a PetDesk implementation.”

For more information about the details of this study—and what PetDesk can offer your business—check out the full results at PetDesk.com/growth-study.

Reference

1. Blue Ocean strategy & shift tools. Blue Ocean website. blueoceanstrategy.com/tools/value-innovation/. Accessed December 19, 2019.