In January 2011, a new and disturbing marketing study, the Bayer Veterinary Care Usage Study, was released. (The second phase was released this month. See story, page 1.) It confirmed a multi-year, nationwide decline in the number of companion-animal visits to veterinary practices. The study identified six factors that contributed to the decline:
4. Pet owners don't understand the need for veterinary care
5. Sticker shock
6. Feline decline
The factors the study identified are indicative of profound changes in the way pet owners view and use veterinary services. The good news is these changes also give veterinarians six targets they can use to turn around the decline and attract pet owners back to their practices. To understand the implications and the opportunities the study identified, it's important to look at how consumers' perceptions of veterinary medicine and spending patterns have changed in the six areas.
1. The recession
It did not cause the decline in visits, but it did accelerate it and painfully brought it to the attention of veterinarians. Statistics from the National Commission on Veterinary Economic Issues (NCVEI) leave no doubt that practitioners felt the slowdown in visits during the recession years, 2008-10. However, the pet economic sector overall performed well compared to the rest of the economy. In other words, pet owners continued to spend increasing amounts of money on their pets, but they were spending it in retail, not in veterinary practices.
The growth in pet expenditures proves that pet owners were willing and able to spend money on their pets—even in a recession—and that marketing works, even in a slow economy. Improve the marketing of your practice to attract new clients. Go beyond the traditional reliance on word-of-mouth marketing and find new ways to reach pet owners who aren't bringing their pets in for preventive veterinary care and who may not understand why they should.
This is another name for competition. But the competition the study describes isn't other veterinary practices—it describes competitors who make themselves appear as equal but less-expensive choices for pet care. Well-intentioned pet owners sometimes don't know the difference in the quality of medical care and advice that veterinarians provide, and they end up making poor choices. When they see a mobile van in a parking lot advertising vaccines for $15, they assume it's a good deal. They view services like this the same way they view cheap oil changes for their cars. It's an easy way to save a few dollars and from their perspective there's no difference except for the price.
Pet stores, online pharmacies and supermarkets want veterinary clients to spend money with them. They're the competition. Learn to compete by paying better attention to clients when they're in your office so you can offer customized solutions to their pet care problems. Let pet owners know you can solve their problems before they leave and seek solutions elsewhere. Being more attentive and listening are the first steps to understanding client problems, and these are skills that everyone in veterinary practice needs to get good at to compete.
While fragmentation is just another form of competition, there's nothing stopping veterinarians from making themselves more competitive. Offer convenient evening and weekend hours and online product options for clients. Tell them the reasons behind your recommendations so they see the value of choosing them. Give focused talks to business groups, schools and clubs in your community to engage local pet owners and create an advantage over the competition.
3. The Internet
Pet owners are going online to seek information on pet health care and to decide if they need to make veterinary appointments. A website is no longer enough to help you reach pet owners outside the walls of your veterinary practice. The real action today is happening on social media sites such as Facebook. Consider these facts:
> Seventy-nine percent of all adults are online. They use the Internet an average of 33 hours per week, and one-third of that time is spent on Facebook.
> Fifty-five percent of pet owners who infrequently visit veterinarians use the Internet to address pet health issues.
> Thirty-eight percent of all pet owners go online for pet-specific information.
Clearly, pet owners are online and using social media to educate themselves. Veterinarians need to be part of the online conversation to learn what pet owners are talking about and provide reliable, helpful information about their pets.
4. Clients don't understand the need for veterinary care
Pet owners appreciate the benefits of pet emergency care. The problem is they have a blind spot for pet preventive care. They don't believe their pets are at risk for preventable diseases, and many are skimping on wellness care with disastrous results.
A recent story in the South Bend Tribune reported on a parvovirus outbreak in Indianapolis, and there have been reports from other areas of the country of other outbreaks for easily preventable diseases like leptospirosis and heartworm disease. What a terrible way for pet owners to learn about the importance of preventive medicine.
On the other hand, outbreak stories like the one above give local veterinarians the opportunity to alert pet owners to disease risks in their communities. Help clients and other pet owners understand the need to protect their pets by posting online alerts and sending press releases to the local media.
5. Sticker shock
As early as 2007 when the economy was still roaring, the AVMA reported the results of a pet owner price-sensitivity study. Even then it showed that almost two-thirds of clients felt that veterinary care was expensive.
But clients didn't blame veterinarians for this. They simply felt the cost of care was a necessary part of pet ownership. In my opinion, they still feel that way, and sticker shock isn't as much about the cost of veterinary care as it is about making veterinary medicine affordable.
Reducing prices is usually not the answer to sticker shock, though if your fees have gotten wildly out of line, it might be the answer for some practices. In most cases, the antidote to sticker shock is to make the value proposition and explain the benefits of recommended veterinary services in relevant terms that make sense to clients. Start by making the value proposition every time clients are in the exam room with their pets. Tell clients what you're doing as you examine the pet, and tell clients what you're finding, including the normal findings.
Once clients see and understand the value, they appreciate it more and say yes to recommendations. If they say yes and have a money problem, help them solve the money problem so it doesn't stand in the way of their pets getting the treatments they need. Today, there are several options for making veterinary care more affordable without compromising care. You could offer:
> Frequent buyer club incentives. Use this for flea, tick and heartworm preventives to counter online sales. Most manufacturers would be happy to support something like this, because they'd rather see the sales go through veterinary practices where they can be confident the pet owners are getting the real thing.
> Twice-a-year visits. This breaks the cost of preventive care into two affordable bite-sized pieces rather than trying to do everything on one visit. This also gives you twice the chance to educate clients and examine their pets. And it gives clients twice the chance to say yes to necessary care.
> Staged care. Do this for expensive procedures and treatment plans when possible—the way human dentists do. This gives clients the option of paying as they go.
> Third-party financing. Give this option to clients who face expensive procedures or treatments for their pets as an affordable way to help their pets without giving services away.
> Annual wellness plans. Break them down and charge fees to clients' credit cards over a 12-month period. Clients will know they can bring their pets in and not worry because the exams and more are included in their annual plans.
6. Feline decline
According to the Veterinary Care Usage Study, cats represent less than 40 percent of the patients most veterinary practices see, in spite of the fact that cats represent 55 percent of the combined dog and cat pet population in homes today. We also know that cat owners face physical and psychological barriers that interfere with feline veterinary care, from getting their cats into the carriers to not believing their cats require veterinary care. Chip away at these barriers by making your hospital more cat-friendly, working cooperatively with shelters on responsible cat adoptions, giving talks in the community and providing helpful information online.
Since a large percentage of cat owners are not currently working with veterinarians, it's critical to find ways to reach them where they are. And they're online in numbers well above the national average. In fact, there are so many cat conversations happening online that it might be considered the feline "dog park" for cat owners.
Post helpful facts and information on the new health and behavior guidelines for cats (available from AAFP and AAHA). You can also share the signs of disease and pain that cats show when they're not feeling well (available from the Catalyst Council) to let cat owners know when and why they should bring their kitties to you for care.
Despite all this, the Bayer Veterinary Care Usage Study is actually good news, because it gives veterinarians a roadmap for reaching pet owners. It also shows the areas that need to be addressed to help clients see the importance of regular veterinary care.
Use the ideas the study identified to take action in your own practice. There are materials from manufacturers and associations to help you, and there will be more coming soon under the newly formed Partnership for Preventive Pet Health care, (PetHealthPartnership.org). There's no better time to get started than now on the changes that are coming to veterinary practice.
Karyn Gavzer, MBA, CVPM, is a veterinary business consultant and nationally known writer and speaker. She says her job is to help practices "go and grow" with training, marketing and new ideas. She is an adjunct instructor for AAHA and a founding member of VetPartners (formerly the Association of Veterinary Practice Management Consultants and Advisors).