Take advantage of everyday opportunities (Proceedings)
Even in high-performing veterinary practices, hundreds of thousands of dollars "walk out the door" each year in terms of services and products that never got recommended or delivered, or if they where provided, were never charged for.
The Bottom Line
• Your existing clients represent a huge, untapped resource.
• The greatest opportunity in your practice is with existing clients.
• Extraordinary revenue potential walks through your front door each day – and those clients already know your name, address, phone number, and have even given you money before.
The Opportunity
Even in high-performing veterinary practices, hundreds of thousands of dollars "walk out the door" each year in terms of services and products that never got recommended or delivered, or if they where provided, were never charged for. These are existing clients, with existing pets. Doing more with existing clients is easier – and more productive and cost-effective than attracting new clients.
Consider the Following Untapped Profit Centers
• Laboratory (including pre-anesthetic testing, offering screens as part of the annual wellness examination, and following-up with chronically dispensed, long-term medications)
• Oral care
• Senior care
• Behavioral care
• Strategic deworming
• Nutrition
• Flea/tick control
• Heartworm preventive
Closing the Gaps
Let's consider a simple profit center management example. Assume your laboratory produces about 10% of your gross revenue. I'd prefer to see the laboratory producing closer to 15% of gross income. In this case, profit center management has identified a costly gap. Focusing on and closing this gap adds tens of thousands of dollars to your bottom line – not to mention better diagnoses, healthier pets, and happier clients. This is an example of focusing on something that really matters.
Let's further assume that after checking multiple industry sources, you're convinced that your laboratory fees are fair and reasonable. In other words, your underperformance in the lab cannot be explained by low fees. Instead, your gap is best explained by your medical protocols – or lack thereof.
What are they doing better or differently in practices where the laboratory generates 15%, 20% or more of the total gross income? Based on observation, here's my top tips for closing your lab gap:
1. Require presurgical laboratory screens. Let's face it, if pet owners rejected presurgical screens, Banfield wouldn't require them in its more than 500 locations. That evidence very clearly establishes the pet owner's ability and willingness to pay for that level of care.
2. Offer annual wellness screens. If the client says "No thanks," you're no worse off than had you not made the offer. If the client says "Yes, let's go ahead and do it," you'll have baseline values. Studies suggest you'll also identify subclinical disease in approximately 10% of the apparently healthy pets – leading to further diagnostics and treatment. Again, using Banfield as a barometer of pet owner preferences, the following is included in their Basic Wellness Plan:
• Blood cell count
• Microscopic exam of blood cells
• Liver screen
• Kidney screen
• Pancreatic screen
• Cholesterol screen
• Diabetes screen
Help your client visualize the power of tracking these values over time with a simple grid in your medical record, as follows:
1. Require screens for senior patients. Fewer than one in ten practices change the reminder frequency and content for senior pets. If you want to see senior pets more often, you have to invite their owners via a reminder. Consult the AAHA Senior Care Guidelines.
2. Require screens for pets on long-term medications. Your standard of care should at least equal the lab work recommended by the drug manufacturer. Sending reminders for follow-up lab work encourages "White Coat" compliance – pet owners know you'll be looking at these values periodically, so they are more likely to give the medication as directed. Sending reminders for periodic lab work also mitigates your professional liability. It's not enough to intend to catch the client when she stops in for a refill – without her pet!
While this session focused on laboratory, I could've performed the same profit center analysis on surgery, dentistry, pharmacy, imaging/radiology, boarding, grooming, etc. Profit center management is a quick, easy, simple, and effective tool that helps you diagnose – and ultimately treat – the health of your business. I prescribe profit center management for the wellness of your practice!
References/Suggested Reading
The Path to High-Quality Care – AAHA Press
Veterinary Clinics of North America – Wayner/Heinke
Influence – Robert Cialdini, PhD
