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Pet owners push back on prices


National survey gauges DVM, pet owner attitudes on economy, pricing, wellness.

NATIONAL REPORT — Nearly 40 percent of appointments are unfilled at most veterinary practices, according to a recent survey.

Just as concerning, 51 percent of veterinarians say caseload is down over a two-year period. Consumers are pushing back, even harder, on price.

The survey results, according to Brakke Consulting's John Volk, signal long-term economic problems for the market that need to be addressed—soon.

Table 1: Revenue by the numbers

The second phase of the Bayer Veterinary Care Usage Survey, a collaborative project from the National Commission of Veterinary Economic Issues (NCVEI), Brakke Consulting and Bayer Animal Health, probed veterinarians' mindsets about veterinary care and trends affecting it. Results were compared with consumer responses gathered during the first phase of this project.

The groups worked with Ipsos-Forward Research, Kansas State University, Southern Methodist University and Texas Christian University to analyze and compare data points.

Table 2: Percentage of available appointments filled each week

The findings, Volk says, show multiple disconnects as it relates to veterinarian and consumer perceptions about prices, wellness and client education on veterinary care.

Just as interesting, Volk says, most veterinarians are operating in extremely competitive environments. The latest survey of 401 veterinarians taken during May 2011 (± 4.9 percent) shows an average of 15 other services offering points of care and 9.6 independents in the same practice vicinity. (See Table 3.)

Table 3: Services competing to provide veterinary care

"That is stiff competition," says Volk. "Another way of looking at this is that it is not competition but proliferation."

There's more bad news. About 66 percent of the respondents say they are seeing patients two to three days sicker. Another 88 percent of veterinarians admit the economy has negatively impacted practice.

Despite it, fees went up in both 2010 and 2011 for many veterinary practices.

Pet owners are pushing back on price, and veterinarians recognize it, explains Dr. Karen Felsted, executive director of NCVEI. In this survey, more than half of pet owners say costs were much higher than expected.

While the results are sobering, Felsted says, getting an accurate snapshot of what is happening in the market can help veterinarians strategize on ways to reverse it. To build your client-base you need to retain your existing clients, build frequency of visits or attract new clients. FYI: 80 percent of the opportunity is in building routine cat care, the survey says.

Table 4: Monitoring fee increases

The first phase of the survey unearthed six root causes for this decline in veterinary visits, including the recession, fragmentation of veterinary services, use of the Internet vs. office visits when it comes to seeking veterinary advice, feline resistance to care, perception that regular medical check-ups are unnecessary and costs of care.

The survey offers some recommendations to rebuff the trend and build client visits.

A closer look at marketing

It's called marketing, and many veterinarians have associated it with gimmickry that works to erode a veterinarian's credibility. It doesn't have to be, Felsted says. And in this economy, word-of-mouth advertising (a well-accepted practice of marketing) probably won't fill the 40 percent of empty appointment slots.

Table 5: Wellness examination trends

Markets are just too competitive, Felsted says.

Instead, practices need to be proactive about getting out in the community and promoting the necessity of veterinary visits and wellness care. Education is marketing. So is talking about pet health and the quality of your services to clients, civic organizations, television stations, etc.

Her point? Marketing extends beyond simply buying an ad in the Yellow Pages and/or building a website.

Most practices, according to the survey, are doing this form of marketing, but fewer are using free social media services like Facebook (about 40 percent) or Twitter (4 percent) as a way to bulk up a practice's client base. Fewer practices are advertising locally or working with shelters by offering a free first wellness examination to those do-gooders who adopt a pet.

Look for ways to reinforce your role as animal expert, educator, healer and guardian of pet and public health. Guess what? That is marketing too.

"There is a huge opportunity here on how we are reaching out to new clients," she says.

Selective discounting to attract new clients can be a very effective way to market your services too, she adds. Felsted is not suggesting a sale or discount on all services, but she advocates discounting as a tool to open the clinic's doors to a select, new client demographic.

"Get them in the door, and then bond them to your practice," Felsted says.

Client-focused practice

Pet owners want to see the same veterinarian each time they visit, the survey says. Only one-third of practitioners have a hospital policy in place addressing the issue. This simple change, Volk says, can help the practice retain clients.

Table 6: Client attitudes about veterinary costs

In addition, Felsted advises veterinarians to start tracking client visits and make it easier to schedule and keep appointments. According to the survey, one-quarter of pet owners expressed an interest in online scheduling or online access to pet health records. Are you texting reminder messages? Felsted's advice? Try to make it simple for clients, and they will reward the effort.

Sticker shock

The business landscape has changed dramatically in the last three years. Prior to the most recent economic recession, which officially started in December 2007, many market watchers believed companion-animal veterinary practices were nearly recession proof.

Table 7: Recession’s impact on practices

In 2011, just 15 percent of veterinarians responding to this survey said the recession had little or no impact on their practices. Most veterinarians felt it, Volk says, and so have their clients.

Up until the recession, the prevalent recommendation from management consultants and groups was to raise fees. Veterinarians responded, and, in some cases, are still doing so, according to the survey.

And for the first time in many years, pet owners are collectively pushing back. "Sticker shock is something that we haven't had to deal with before," Felsted says. The game has clearly shifted in the last few years—from calls to raise fees, manage pricing and now to considering annual wellness care. It's a concept that Banfield Pet Hospital embraced, and it has flourished.

Veterinary care can be expensive, Felsted says, so it's incumbent upon veterinarians to explore options to help pet owners finance care through pet insurance policies, credit options or even wellness plans.

Tough love, education and preventive care

If it's viewed as a test of wills, cats are winning.

Pet owners are so frustrated by the trip to the veterinarian that some are just throwing in the towel on the entire experience. Other pet owners are just delaying it.

"The biggest single obstacle for cat owners is the inability to get the cat to the vet," Volk says. "That's where the fight begins, and it seems, that is where it ends."

Helping cat owners with this basic problem could go a long way to improve visitation numbers each year. (Go to catalystcouncil.org for some useful suggestions on this topic.)

But there is an even deeper issue: Pet owners don't understand the benefits of an annual veterinary exam. And if you peel away the issue, it really is about education, Volk says.

Are you communicating during routine exams by describing health risks? Do you talk through the physical examination? Do you describe the reason for blood work and why you are recommending it?

Almost all (95 percent) of veterinarians agree dogs and cats require at least one visit to a veterinarian each year. Another 72 percent believe wellness examinations are "the most important services they can provide." Sixty-five percent of veterinarians believe their clientele do not value annual wellness exams.

The takeaway? Pet owners favor individualized annual wellness programs and monthly billing for routine wellness services, the survey says.

Communication breakdown

Interestingly enough, about half of pet owners surveyed don't understand the concepts their veterinarian is talking about. "There is a huge opportunity here on how we are reaching out to clients," Felsted says.

"We are asking pet owners to make decisions about services that are complicated; they are scary, and they are expensive. And we are not explaining to them what we want them to do and why it is important. This is a critical point," Felsted says.

The majority of veterinarians, 57 percent, strongly agreed with the statement that they talk through an exam with clients.

"There is a disconnect with what pet owners are saying and what veterinarians are doing."

The message is to look at your communication style and technique. Are you using too many medical terms? Can you describe a complicated medical process and still make it easy for pet owners to understand?

The project's goal, explains Christiano von Simpson, DVM, MBA, director of veterinary services for Bayer HealthCare LLC, was to not only find out what was causing the decline in patient visits but also offer suggestions on ways veterinarians could use the data to reverse trends.

While it's been well-documented that veterinarians remain one of the most respected professions, these data present an opportunity to advance veterinary care and improve the health status of pets, von Simpson says. Client education is still the key.

Reversing a decline

  • Develop industry-wide and clinically supported guidance on annual veterinary visits and promote that standard among pet owners.
  • Communicate to pet owners the health and economic value of regular treatment and exams.
  • Make veterinary practice more "cat friendly" with separate entrances and quiet rooms for cats and their owners.
  • Make it as easy as possible for pet owners to schedule and keep appointments by adopting electronic scheduling software, reminder notifications, email and text messages.
  • Consider alternative pricing strategies and offer financing options for pet owners.
  • Develop an individualized full-year wellness program.
  • Integrate new marketing strategies and tools, including using Facebook and Twitter to connect with pet owners.
  • Offer options for monthly payments.
  • Help cat owners address transportation problems.

Source: NCVEI, Brakke Consulting, Bayer HealthCare LLC

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