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Your veterinary clients aren't coming back?
If your patient list is shrinking, then it's time for some serious bonding-and more client retention tools.
In this new monthly column, Dr. Karen Felsted, CPA, MS, CVPM, and Brakke Consulting's Jessica Goodman Lee, CVPM, will explore real problems facing veterinary practices today and offer online tools and from-the-trenches advice to keep your clients happy and your business booming.
Now get familiar with the case study below—we'll focus on different aspects of this hospital for a few issues of Veterinary Economics and then move on to the next practice in need.
The story so far
In the good old days before the recession, Dr. Jane Felgo didn't pay a lot of attention to her financial and operating metrics and she still did well. However, the past few years have been a challenge; running a successful practice isn't as easy as it used to be. That's why one of Dr. Felgo's New Year's resolutions is to use metrics in 2013 to improve the financial success of the practice. She knows she needs to calculate her operating profit but is waiting for her 2012 tax returns to do so. Regardless of how profitable she was in 2012, however, increasing revenue can only help her practice in 2013 and so she plans to start her metrics review there.
The Felgo Veterinary Hospital team practices high-quality medicine, and while their fees aren't the highest in the community, they are well above average. Revenue in 2012 was a little more than $1 million, and the practice grew 3 percent during 2011. Most of this increase came from a 2.5 percent fee hike in 2012.
There are several key revenue metrics Dr. Felgo could look at, but she wants to focus on her active clients first. Active clients have generated at least one transaction at the practice within the last 12 months. The number of active clients is most influenced by the number of new clients at the practice and the client retention rate.
The number of active clients is easily accessible with most veterinary practice software, and Dr. Felgo discovers that as of Dec. 31, 2012, the practice had 1,345 active clients per full-time-equivalent (FTE) veterinarian. She runs another report and discovers that one year ago she had 1,458 active clients per FTE doctor—113 more than she has now.
Dr. Felgo compares her figures to 2011 Benchmarks: A Study of Well-Managed Practices (http://dvm360.com/benchmarks) and is pleased to learn that her number of active clients per FTE veterinarian is much higher than the average from the 100 hospitals in the study.
However, she quickly realizes those practices generate much more revenue per transaction than her practice, so she can't assume she's doing better than they are. In a study of more typical practices, the average number of active clients per FTE is 1,572—quite a bit more than hers. Dr. Felgo knows her practice isn't as busy as it's been in the past, and this matches up with her lower active client numbers.
Dr. Felgo knows she should look at her number of new clients as well (we'll cover this next month), but she decides to first focus on better retention of her current clients.
One way to keep current clients coming back is to strengthen your relationship with them. The Bayer Veterinary Care Usage Study showed that one attribute of growing practices was that clients generally saw the same veterinarian every time they visited. Why is this important? Clients who develop a relationship and a bond with their veterinarian are more likely to return to the practice and comply with that veterinarian's recommendations. Study the following tips to encourage the bond with your clients:
> Carry individual business cards with you at all times. At the end of an appointment, offer one to the client and say, "Here's my card. Feel free to contact me directly by phone or email with any questions or concerns."
> Be sure to handwrite your schedule on the back of the business card. This way the client knows when you're available to schedule their pet's next appointment.
> If you work part-time, or anticipate not being available, take the time to recommend another veterinarian at the practice and include his or her name on the back of the business card. If your alternate is in the building, make a personal introduction. (See the example at left and download more tools for keeping pet owners happy as well as exclusive client-bonding tips for each member of your team at http://dvm360.com/retention.)
Be here next month to learn how Dr. Felgo plans to attract new veterinary clients.