8 mistakes to avoid in your veterinary wellness plans - Veterinary Economics
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8 mistakes to avoid in your veterinary wellness plans
Who says you have to learn the hard way? Dodge these common annual plan faux pas and keep your goal of providing affordable bundled healthcare services alive.


VETERINARY ECONOMICS


MISTAKE NO. 3: SKIP THE WRITTEN WELLNESS PLAN CONTRACT

When a client enrolls in one of your wellness plans, you agree to provide certain veterinary services or products and the client agrees to pay for them. Create clarity and mutual understanding with a contract that details what's included in the plan and the responsibilities of each party. Create your own contract with a lawyer, or check out the legal checklist in Benchmarks 2012: A Study of Well-Managed Practices to get you started. (Visit http://dvm360.com/benchmarks to learn more.)

MISTAKE NO. 4: DITCH THE MEMBERSHIP FEE

Membership in a wellness plan creates a community. Your softball team is a community, your book club is a community, and your veterinary practice is a community. Membership in communities makes people feel special. The more special clients feel, the more bonded they are to your practice. Offer perks that only members receive (exclusivity) as well as services available to all (inclusivity) at your clinic. Add value to enrolling in your wellness plan with special member pricing. The membership fee will also help cover the costs the practice incurs when enrolling a client in the plan.

MISTAKE NO. 5: OFFER TOO STEEP OF A DISCOUNT ON SERVICES

Some practice owners get a little too excited and offer clients discounts of 40 percent to 50 percent off with their wellness plans. Whoa, slow down, Nelly—that's way too much!

Veterinarians believe this large discount is justifiable because many clients only use 75 percent or so of the services they've paid for in a plan. Those clients figure they still come out ahead because of the significant package savings. When it comes to patient wellness, we wish this wasn't the case. But practices routinely end up not providing all of the discounted care clients purchased, and the true discount ends up being less.

However, you must keep in mind your desired profit margin when determining your prices. To maintain a reasonable rate of return, your discount needs to be less than 20 percent. For more on the feasibility of the wellness plan discount, see "Wellness plans and breed-specific care: One size doesn't fit all" in September 2012 Veterinary Economics or online at http://dvm360.com/onesize

Some additional food for thought: According to a study conducted by four marketing professors at the University of Minnesota, Texas A&M University, and the University of Miami, consumers would prefer to get an extra product for free than to buy a product at a cheaper price. Remember these study results when creating wellness plans at your veterinary practice.

MISTAKE NO. 6: PAY THE DOCTORS FULL PRICE

Basing doctor compensation on regular rates versus the package rates will put your practice in the hole. The discount on your package price just became insurmountable. Be sure that the doctor who provides the care gets production credit at the discounted package price.

MISTAKE NO. 7: OFFER REFUNDS ON UNUSED SERVICES

A client who enrolls in a wellness package is purchasing a finite number of services for a finite period of time. The practice is responsible for clearly defining what's included in the plan and terms of the offer and proactively taking steps to make sure the pet receives all of the purchased care. The client is responsible for coming in for the purchased care. Don't let one year's contract blend into the next by allowing unused services to carry over—this will defeat the purpose of the wellness plan and probably send your veterinary practice into debt.

MISTAKE NO. 8: DON'T PROMOTE THE WELLNESS PLAN

Getting the message out about your package is key to successful implementation. If clients don't know about it, how can they participate? Decide the formats and frequency of the promotions to expand the awareness about your plan.

The sooner you know what strategies to avoid, the sooner you can confidently launch wellness plans that help your practice—and more importantly patients—thrive.

Denise Tumblin, CPA, is a Veterinary Economics Editorial Advisory Board member and owner of Wutchiett Tumblin and Associates in Columbus, Ohio. Please send comments to
.


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Source: VETERINARY ECONOMICS,
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