Explore the controversy: Low-cost vs. high-end veterinary business models

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Sep 21, 2012

Shawn McVey, MS MSW, Veterinary Economics Editorial Advisory Board member, sees the controversy surrounding low-cost alternative care from two different angles. One is operational, the other is psychological, and both are about focus.

"I think veterinarians still struggle with trying to be everything to everybody," he says. "Successful practices today are really learning how to focus on their niche. If your wheelhouse is low-cost affordable care, delivered excellently and expeditiously, and that's something you can do very well, then you should get in there and do it."

The operational confusion arises, he says, when a practice also wants to achieve the high-end, high-technology, high-touch model. "They are two different models and they don't work well together," he says. "The resources they need are very different."

McVey offers two examples. When he visits the veterinarian, he doesn't want quick and impersonal. But that’s exactly what he wants when he goes for coffee. And when he visits a new car showroom he doesn’t want somebody hovering over him from the minute he walks in the door. But when he goes to the veterinarian, hovering is what he wants.

"I am in no way suggesting low cost clinics don’t practice good medicine," he says. "But you don’t get all the bells and whistles there. It’s not that you value one model over the other. There are successful business models for both."

McVey says successful businesses today focus on market segmentation based on price and perceived value, and veterinarians will benefit from doing the same. If you want to build a high end practice, he suggests you not worry about the low-cost alternatives in your community. Define yourself first before you worry about others.

Which brings him to the psychological aspect of the controversy. In tough times, he says, veterinarians often default to the fear they will lose clients to somebody who is charging less.

"I always ask them, 'Have you ever heard of a veterinary practice going out of business because they charged too much?'" he says. "And, they never have."

"The truth is, charging more brings you a more select clientele," he explains. "It allows you to train your staff more adequately. It allows you to provide career paths for your employees. And it allows you to justify what you do and to be aware of the value of your products and services. There’s a direct correlation between what you charge and what level of service you have to give."

McVey's advice for the practitioner who feels challenged by the low-cost alternatives:

"First, don't focus on what you can’t control. Shore up your operations so you are dependable and reliable 95 to 100 percent of the time, so it is predictable the client is always going to have a good experience in your practice," McVey says. "Concurrently, look at the socioeconomics of your market and understand your primary demographic. Build your business around that model. Focus only on that and let the chips fall where they may."