Ask Shawn: Price matching pains
Shawn McVey counsels a practice manager who's fed up with the staff time it takes to price match veterinary drugs to stay competitive with online pharmacies.
Q: I'm happy to report that our practice hasn't seen the drop in pharmacy gross sales or margins that so many practices have seen. Not yet, anyway. But we also offer price matching for clients who ask for it. Basically we match the price of online pharmacies-even though we all know they aren't getting the same total package from online pharmacies that we offer. From us, they benefit from convenience, it's manufacturer backed and known to be a good product, we offer direct service if they have questions and so on.
Though this has helped us retain some sales, more clients are requesting price matching. Taking the time to match these prices-and to assure they aren't below our 30 percent minimum price match mark up we established this year-not only costs us more money in staff time but it's starting to really irritate the reception team. My lead receptionist says it can take up to 20 minutes to price match everything for a three- to four-pet appointment. Yikes!
We launched an online store this year, and I think it's time to move away from price matching. Clients need to understand that there's a fee for getting their pets' medications right from us at checkout. Those who want the best pricing need to embrace our online store as a true comparable service to the other online pharmacies-again, not that it is, because they're still receiving all the benefits of buying from our lobby from our online store too, short of getting product immediately.
So, how can we gently transition to this approach without making too many clients angry? We are in a relatively rural area with a lot of veterinary practices-a town with a population of 50,000 and five practices in town alone-so client satisfaction is huge for us to continue to thrive.
-Matched out
Dear Matched,
Great question, and I love how you have clearly thought it all through. I think your movement to the online store is the right thing to do. To soften the blow, roll it out over a six-month time period and allow some grace time for clients to get used to the transition. Train your team with a scripted response about the reasons for the change so everyone sends the same message.
You might also consider conducting an internal study on loss leaders. Does offering this price-matching service encourage clients to come to the hospital more often, and do they spend money when they visit? If the answer is yes you might be profiting from the extra service in unexpected ways. Good luck!
-Shawn
Ask Shawn.
Maybe you're tired of babysitting your team members. Perhaps you're looking for strategies to beat a bully. Shawn can help. Shawn McVey, MA, MSW,is a member of the Firstline and Veterinary Economics Editorial Advisory boards and CEO of McVey Management Solutions in Austin, Texas. Email your questions for him to firstline@advanstar.com, then visit dvm360.com/mcvey to read McVey's advice on other hot topics.
