Most veterinary practice leaders want to grow their practices and strive to implement marketing initiatives that will result in increased revenues for the practice. Unfortunately, the efforts by many veterinarians and managers fall short due to a lack of proper planning.
Most veterinary practice leaders want to grow their practices and strive to implement marketing initiatives that will result in increased revenues for the practice. Unfortunately, the efforts by many veterinarians and managers fall short due to a lack of proper planning. Without appropriate marketing planning, the execution of marketing plans tends to be less effective and the desired results of increased revenues or enhanced profitability may not be achieved. Proper planning includes making assessments about the current status of the practice and analyzing hospital data in order to develop marketing goals that are tied to improving the financial health of the practice.
Organization and planning is the foundation for successful marketing plans. Before writing a marketing plan, engage in strategic planning on an annual basis. Strategic planning starts with developing a clear vision and/or mission for the practice if you have not already developed these statements. The mission statement usually defines the core purpose of the organization while the vision is generally a loftier statement that creates a picture for where the practice wants to be- it is more long-term in focus. Marketing initiatives should be aligned with the mission and vision of the business. Likewise, the entire healthcare team needs to know and understand the mission and vision of the practice so they can fulfill their critical roles in achieving the practice goals.
Strategic planning also includes performing a situational analysis or SWOT analysis which refers to strengths, weaknesses, opportunities and threats of the business. Strengths and weaknesses involve an internal assessment of the business while opportunities and threats involve an external focus on the competitive environment. It is beneficial to involve staff in the SWOT analysis since team members often have knowledge, creative ideas for marketing and excellent feedback that can augment the assessments of the leadership team.
A thorough SWOT analysis helps practices focus on developing appropriate and effective marketing objectives. Carefully consider the information gathered from the SWOT analysis. For example, what did you discover about your client service? Is it mediocre or exceptional? If the SWOT revealed that client service is a weakness due to some communication problems, then marketing efforts should center on improving service. Likewise, if a potential threat to the business is reduction in caseload due to competition, then marketing efforts should center on how to minimize or overcome this threat. Perhaps the practice needs to consider offering new services to be competitive. Maybe the staff needs further training in client communication.
Analyzing financial data and hospital data as well as trends in the data helps to guide marketing decisions. For example, are revenues increasing, decreasing or stagnant? Which profit centers are stagnant or decreasing? Are new client numbers per month stagnant or declining? How does the practice measure up based on industry benchmarks? Answering these questions and many more will help you know which marketing goals make the most sense for your practice. Let's take a look at some of the key performance indicators or KPIs that every practice should routinely monitor.
Revenues need to be tracked on a monthly basis and compared to the same month from the prior year. Don't forget to look at trends. A slight dip in revenues for one month may not be a concern but a steady downward trend is a problem. The sooner you notice a decline in revenues or a downward trend, the sooner you can take action to improve revenues. Regardless of whether revenues are up, down or stagnant, further analysis needs to occur to see what is driving the numbers. For example, revenues might be up to a price increase that was instituted the prior month or quarter. But maybe the number of client transactions is down. Don't be complacent and miss the fact that the number of clients or pets being seen is declining.
The amount of revenue being generated by each doctor in the practice should be tracked on a monthly basis as well as their average client transaction (ACT). Sometimes, changes in these figures can explain changes in the total revenue for the hospital. Sometimes practices that pay their doctors a salary without any bonus based on production are remiss in reviewing doctor production data. Don't make this mistake. Doctors must have adequate production of revenues for the hospital to be financially successful. The average client transaction can be an indicator of how effective doctors are at performing excellent case work-ups and communicating the value of services to pet owners. If you notice a substantial decrease in doctor production or ACT, it is time to investigate the underlying cause for the change. If you notice considerable variations in the data for different veterinarians in the practice, see if you can determine why one doctor is able to produce more than his or her colleague.
When reviewing total revenues, analyze the revenue by service category or profit center to gain valuable information about which services are more or less utilized at your practice. Service categories include exams/consultations, vaccines, laboratory testing, imaging, surgery, hospitalization, anesthesia, dentistry, and product sales. By looking at the revenues for different services, you can begin to see areas of opportunity for establishing marketing goals. You can then compare the amount of revenue for each service category as a percentage of your total revenue to published industry benchmarks. This will give you an idea of how your hospital is performing compared to other hospitals.
Be sure to track the number of new clients who visit your hospital each month. The number of new clients per month helps tell you how well the practice is doing at attracting new pet owners. The industry benchmark for the average number of new clients per doctor is 25-30 new clients per month. New practices and younger practices will have higher numbers while older, more established practices in communities with minimal growth may have lower numbers.
All expenses need to be closely monitored and controlled to ensure the financial health and profitability for the business. With respect to marketing, tracking expenses is important because if expenses are out of control, sufficient funds are not likely going to be available for marketing initiatives. Specific marketing expenses such as the amount of money spent on advertising and community events needs to be tracked so that you can calculate a return on investment for these expenditures. Another expense that can relate to marketing is the staff expense. If this expense is low compared to industry standards, it may indicate an area of opportunity with respect to marketing. For example, the practice may be able to hire more staff that can then offer and perform more services for the practice.
Once you have run all your practice management reports and analyzed your data, you should be able to start identifying which marketing goals make the most sense for your hospital. For example, if new client numbers are low or decreasing, you will want to establish marketing goals specifically aimed at attracting new clients. On the other hand, if you have excellent new client numbers then it is probably best to look at marketing goals that will drive service utilization by your clients. Perhaps you identify areas of opportunity to increase dentistry service revenue or diagnostic testing revenues. Maybe you realize that your client compliance with wellness care recommendations is low. In this instance, it makes sense to establish specific marketing goals to increase compliance.
When establishing marketing goals, decide on a reasonable number of goals for each quarter or for the upcoming year. Practices that focus on two or three goals tend to do a better job of executing marketing tactics to reach these goals than practices that try to do too much. Team members become overwhelmed and frustrated trying to achieve an unreasonable number of marketing goals