Market research: How to find your edge

News
Article
dvm360dvm360 March 2023
Volume 54
Issue 3
Pages: 44

How to stand out from your competition and run a striving practice

Chaosamran_Studio / stock.adobe.com

Chaosamran_Studio / stock.adobe.com

Whether you’re starting a new practice, expanding your current practice, or finding yourself somewhere in between, it pays to understand the local market for veterinary services and how you rate against competitors. Market research helps inform this understanding, and it’s an important diagnostic or prognostic tool to achieve or maintain a thriving, resilient practice—one that stands out from the others.

Most importantly, using market research findings can lead to greater revenues or incomes and increase your financial capacity to hire additional staff, raise wages, and provide other benefits to your veterinary team. Although the notion of research might seem daunting, it doesn’t have to be. Resources are available to help you quickly gauge where your practice stands in relation to competitors or clients and where to find opportunities for growth. All you need to begin is a business idea and relevant research questions.

What is market research?

Market research involves gathering information about market needs and preferences and is used to improve or confirm your business idea and help with decision-making.1 Drawing on client behavior and economic trends, market research can cover a variety of topics.2 You can examine business trends in your area or the overall industry and determine what you hope to change or adapt.

Here are somevitalparameters—or types of research questions—to consider2:

  • Demand:
    • Is there a need or desire for the products and services my practice
      offers/might offer?
    • How manyclientswould be interested in what my practice
      offers/might offer?How many businesses in my area offer similar products or services?
  • Market characteristics:
    • Who are my clients in terms of demographics, preferences, and other variables?
  • Segmentation:
    • What are my practice’s major market groups (segments)?
    • What are their needs and interests?
  • Market share:
    • How much of the local market does my practice capture compared with my competitors?
  • Performance:
    • How are veterinary practices and/or my specific competitors performing on average, and where does my practice fall on this spectrum?
  • Strategy:
    • What marketing strategies work best for my situation and area?
  • Reach:
    • Is my practice meeting my clients’ needs?
    • How well are my marketing efforts working
  • Image:
    • How is my practice perceived by clients?
  • Pricing:
    • What would clients be willing to pay for my services?
  • Forecasting:
    • What services or products would do best in my practice’s area or the area I’m targeting?
    • What future trends are projected?

What are my options?

There are many ways to collect market research, and it is important to find an approach that works best for your practice in terms of available time and money. You can draw on existing data, collect the data yourself, work with a market research professional, or perform any combination of these options. If you choose a self-reliant approach, you can obtain assistance at little or no cost through the US Small Business Development Centers website.

What are some quick wins?

The fastest (and usually least expensive) way to answer your research question is to use existing data. Although the available information may not directly answer your question, existing data can help you obtain a diagnosis for the patient—your practice—and develop a treatment plan for gaining a competitive edge. Following are examples of free or inexpensive resources to get you started.

Demand and market characteristics

Published industry reports, such as the American Veterinary Medical Association (AVMA)’s Pet Ownership and Demographics Sourcebook (free to AVMA members), provide information that can help you understand the overall demand for veterinary care and general pet care services and products as well as the size of the market. You can use this information to gauge how your practice is faring compared with the average practice (eg, appointment wait times, hours of operation, or types of services offered) and identify opportunities for expansion or scaling back. What’s more, you can learn about who pet owners are, how they behave (eg, what makes them likely to switch practices), and what their preferences are (eg, what drives their loyalty). This is good information to have when developing strategies to attract and retain clients.

On a more granular level, the QuickFacts application of the US Census Bureau allows anyone to easily produce tables, maps, and charts of the bureau’s most frequently requested statistics at the national, state, or city/municipality level. You can use this free application to determine general demographics, computer and internet use (important when considering telehealth services or an online pharmacy), and business and economic characteristics. Esri, a geographic information systems provider, offers location data including demographics, common behaviors, spending habits, and disposable income by zip code.

Segmentation

The AVMA’s Pet Ownership and Demographics Sourcebook has already identified and characterized various market segments. It describes certain types of pet owners, including their demographics, preferences, values, and needs when it comes to pet care. This information is a golden ticket for developing effective marketing campaigns or tailoring practice operations to meet clients’ needs.

Market share

If you’re an AVMA member, you can use the organization’s online Market Share Estimator worksheet to discover whether you are attracting all the business in your area and monitor this status over time. This free, step-by-step guide allows you to quickly calculate the potential size of your local market, identify your current market share, and set realistic goals for growth. Over time, an increase in market share could mean your business idea is working. On the flip side, a decrease could mean a problem such as losing business to competitors.

Performance

If you are interested in how the veterinary industry or your practice is faring, the AVMA has several helpful resources to satisfy your market research needs and monitor the pulse of your practice and profession. These include the following:

  • The Practice Pulse newsletter (avma.org/PracticePulse) is a free monthly digest of key practice data, trends, and expert economic insights.
  • The Veterinary Industry Tracker (avma.org/IndustryTracker) is a free, interactive dashboard that leverages data from thousands of veterinary practices, showing revenue and visits per practice, product sales, and much more.
  • The AVMA’s annual report on the economic state of the veterinary profession (free to AVMA members) and annual Veterinary Business and Economic Forum explore some of the biggest trends and concerns of the profession. Of relevance to market research is the report’s section on the market for veterinary services.

Another helpful source of information, the US Census Bureau, provides statistics on the veterinary industry. The data can be accessed online in table, map, or webpage form and filtered by geography, year, survey of origin, or topic. The most recent information is from 2021.

Strategy

If your research question is how to convince animal owners that routine veterinary care is important, then the AVMA has already done the research for you. The findings have been translated into a suite of clinically useful tools you can find at avma.org/LanguageOfCare, including the following:

  • The e-book Language That Works (free to AVMA members) includes words and phrases that resonate—or fall flat—with pet owners.
  • A pair of “Words in Action: Language of Veterinary Care” instructional videos demonstrate specific words and phrases to use.
  • A web-based training module on AVMA Axon called “Talking With Clients: Language Dos and Don’ts” covers the right language for productive conversations with pet owners, how pet owners think about veterinary care and the role and value of veterinarians, and how to discuss and address client concerns about the cost of care.

The bottom line

Market conditions and client preferences frequently change. Market research is necessary to understand your local market and the overall industry, and it’s important when developing your annual business plan and for gaining
an edge over your competitors. Existing data sources can help you begin, with minimal financial or time investment. If you wish to dig further, several companies offer market research services, and free or low-cost consultation or training is available from the US Small Business Administration on a wide range of topics.

References

  1. The ultimate guide to market research and how to conduct it like a pro. Qualtrics. Accessed January 26, 2023. https:// www.qualtrics.com/experience-management/research/market-research-guide
  2. Market research and competitive analysis. US Small Business Administration. Accessed January 26, 2023. https:// www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
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