Why one expert thinks your average transaction needs to go down
Brendan Howard oversees veterinary business, practice management and life-balance content for dvm360.com, dvm360 magazine, Firstline and Vetted, and plans the Practice Management track at all three Fetch dvm360 conferences.Brendan has proudly served under the Veterinary Economics and dvm360 banners for more than 10 years. Before that, he worked as a journalist, writer and editor at Entrepreneur magazine and a top filmed entertainment magazine in Southern California. Brendan received a Masters in English Literature from University of California, Riverside, in 1999.
The metric you should be measuring is client spend per year, says veterinary analyst John Volkand it's likely to be higher if you ease the sticker shock.
Stop worrying pets won't come in more than once a year, and instead find ways to get them in the door more often. Owners could spend less each time but more over the year and lifetime of the pet, improving patient health. (Shutterstock.com)Every awesome practice owner or manager has a favorite business metric that he or she loves-loves-to watch daily, to tweak regularly and to passionately proselytize about with any colleague who'll listen. (You can nerd out right now and email me your favorite and why. We're into this stuff too.)
And one of the perennial favorites has always been average client transaction (ACT). How much money clients spend each time they visit can show how well doctors and team members explain the need for preventive care or higher-quality diagnostics and services. If you use the number to compare doctor to doctor (especially together with average doctor transaction), you can identify high performers and see how their medical communication or protocol choices are improving the bottom line and patient health. Constructively share best practices with all doctors and, boom, better results.
However, veterinary analyst John Volk with Brakke Consulting (soon to be Stonehaven) told an audience at the most recent VMX in Orlando, in no uncertain terms, that he thinks it's a lousy one for practice managers to focus on. The session was sponsored by wellness-plan provider Premier Pet Care Plan.
“I hate average transaction. If you focus on average transaction, you're trying to get as much money out of that client as you can.”
“I hate average transaction,” Volk told the crowd. “If you focus on average transaction, you're trying to get as much money out of that client as you can.”
In a way, living by the ACT is living in fear as doctors and managers. You're scared that clients won't come in once every year or two, and you need to get everything done right then or the pet will suffer. The more important metric, Volk says, is average spend per pet per year. It's not what happens that day, but what care happens over a year. With wellness plans-where practices charge monthly for an annual bundle of preventive-care products and services and often offer one, a few or unlimited office visits-ACT drops, Volk says. But client spend per year increases significantly.
It's true: Too-frequent visits by clients can be a waste of time, money or both, but there's a good balance when clients don't feel sticker shock every time they visit. Push too hard on ACT, and you're likely to see a lot of sticker shock.
Think average client transaction still rules? Talk back to us in an email or comment below.