Today's Veterinary Business

AUG 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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47 August/September 2018 • TODAYSVETERINARYBUSINESS.COM How often are discounts given? The federation came up with these numbers: • Pharmacists: 0 percent. • Accountants: 0 percent. • Lawyers: Less than 5 percent. • Dentists: 7 percent. • Orthodontists: 8 percent. • Car mechanics: Less than 10 percent: • Physiotherapists: 10 percent. • Chiropractors: 14 percent. • Veterinarians: 41 percent. It's Time to Stop Personally, I find it offensive. Dis- counting demeans our profession and tells your clients that what you do is all about money instead of about the professional service and quality of care. Some would argue that dis- counting is a marketing tool that brings in new clients or increases their number of visits. I remember attending a session at a national conference where two manage- ment speakers were advocating using discounts to increase "door swings." I sat there in disbelief. If a pet owner comes to you just because you are giving them a 10 or 20 percent discount, is that the type of client you really want? Even if you answered "yes," you know you will lose that client as soon as someone else offers a 15 or 25 percent discount. For the most part, clients who show up due to a discount are con- tinually shopping for a better deal. They rarely become bonded clients. Many of the practices I have consulted with simply stopped dis- counting. Amazingly, they have not lost clients. In fact, they enhanced their profitability. These practices had been giving away their profits. It is an accepted fact that for every dollar you give away, you need to generate $4 to make up for it. How is that possible? Think about this: When you discount a service, you still have to pay your staff and doctors, you still have the overhead costs and, of course, you still have the cost of the inventory items used. If you look at practice valua- tion, this holds more significance. Every lost revenue dollar can lop $4 to $5 off a practice's valuation. If you discount your services to senior citizens, military members or firefighters, I suggest that you just stop. Instead, grandfather these cli- ents by continuing their discount, but do not offer one to new clients. The discounts will go away over time. Your team can simply say, "Rather than increasing our fees to cover the cost of providing dis- counts, we decided to discontinue discounts so we can keep our fee schedule fair for all our clients." Go the Charitable Route I know our profession needs to give back to the community and help animals in need, but unless you operate a non-profit charitable organization, you need to limit how charitable you and your practice are. To this end, I have two ideas I often use with my consulting practices. Decide as a practice which charity organizations you wish to work with in your area. It might be a rehab organization or a I don't understand why the veterinary profession discounts its services. To my way of thinking, a business that discounts services is basically saying that customers are being overcharged the rest of the time, so now the services are being charged appropriately. When was the last time you got a discount from your physician, dentist, surgeon or chiropractor? According to a study done by the Canadian Federation of Small Business, veterinarians discount more than any other business. By Mark Opperman, CVPM Leadership PRACTICE SMARTER Discounts? No! Marking down prices on veterinary services is the bane of our profession, so consider an alternative approach. rescue group, or maybe you wish to help several groups. Establish a budget for these charity services and then sit down with the organizations and say you have allocated "X dol- lars" worth of professional services that you will provide. Also say that once the amount has been reached, further services will be charged at normal client fees. If you wish to pro- vide inventory at your cost plus 10 or 20 percent, you can do that as well. Create a charity account in each doctor's name within the practice computer system. Then fund each account with a $2,000 credit. For example, I will set up an account for Dr. Jones and label it "Dr. Jones — Charity Account." I will inform Dr. Jones that she can use the account in whatever manner she wishes. If she wants to help a client who can't pay the bill, she can deduct the payment from her charity account. If the client can pay half and if Dr. Jones wants to help by taking the other half out of her account, she can do that as well. Dr. Jones doesn't need to ask the practice manager or practice owner for permission; she can do this on her own. Once the charity account is depleted, she no longer can provide charity services. The account may be 1 2 Continued on Page 49

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