Great big thanks to all those that attended my lecture at Valley Central. You were an enthusiastic and attentive audience and it was a great pleasure to meet the many of you that I did.
As promised, I’ve summarized some of the things we talked about. Please feel free to give me a call if you have additional questions.
Working Solutions to Pricing and to
other Challenges in Veterinary
Medicine
www.halowconsulting.com
www.halowconsulting.blogspot.com
And don’t forget Halow Consulting on Facebook!
September 15th, 2011
Bash Halow
§ BA, CVPM and LVT
§ Contributor to DVM360
§ Over 10 years experience as a practice
manager, regional manager and administrator
§ Currently work with practices in NJ, PA, NY,
MD helping them achieve more productive,
happier teams and increased revenue.
§ Founder of the NJVHMA and the BAVMA.
§ Member of VHMA, AAHA, NJVTA, NJVHMA
Overview of what we
will cover today
§Discussion of current challenges within
the industry
§Additional challenges within our
practices
§A look at our pricing
§Alternatives to increased prices
§No successful practice can be without…
Current Challenges within the
Companion Animal Health
Industry
§Study by Brakke, Bayer and Karen
Felsted with the NCVEI showed a
decrease in visits to veterinary
hospitals:
§Prohibitive pricing
§Internet
§Client Ignorance
§Increase competition
§Recession
§And Cats, but we’ll save this for another
talk ;)
Additional Challenges
§Poor charge capture and giveaways
§Inconsistent SOC and uneven use of
our staff to promote it.
§No marketing training for our team
members.
§Our pricing tends not to have a logical
or systematic through line
§Our prices tend not to be embraced by
our entire staff and by some of our
clients
6 What to do?
§I know you want something immediate
so I’ll give it to you, HOWEVER…
§The true success of your practice
demands that you implement solid
managerial practices like a Mission
Statement, Goals, Budgets, Job
Descriptions, Consistent Training,
Regular Reviews, and an Empowered,
Respected Team.
§In the meantime…
Let’s Talk about Pricing
§We have hit a wall with increased prices
§When pricing, make sure your prices
cover your costs plus a healthy mark up
§Consider pricing some services as loss
leaders
§Allow your entire team to participate in
your pricing
Pricing Cont’d
§KNOW YOUR EXPENSES
§Build yourself a pricing calculator
§Buy yourself a calculator
Build yourself a calculator
§Basic formula for a pricing calculator is:
Cost of fixed /semi fixed expenses per
minute x # of minutes for service +
material costs+ desired markup= price
Build yourself a calculator
§Group your services together
§Add in discounts and giveaways
§Mark up services to at least 15% net
profit
§As an aside Pharm should be marked
up 140-160%. Shopped pharm 100%.
Mark up of pharm does NOT include
label or dispensing fees
§Be careful with added fees that you
cannot readily justify or explain.
Believe in your prices!
§Make sure your entire team is onboard
with them.
§Have systems in place to make sure
that your clients perceive value for the
price that they pay.
Create and Monitor Revenue
Centers
§Classify (categorize) products and
services together using the following
guidelines:
• Services and products where client
education has a direct impact on sales.
• Services and products that are included in
doctor production and those that are not.
• Services and products where you are able
to control ROI directly.
Examples of Categories
To Raise or Not To Raise Prices
§I only know of one practice that raised
its prices too high.
§A pricing calculator will reveal your
prices are too low
§Prices are not as heavily shopped as
you think they are.
§If your team understands your
expenses and understands the value of
the service you provide, you can
successfully raise prices
Part II
Alternatives to price increases
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www.halowconsulting.com
And facebook!
Alternatives to Increasing
Prices Create an Inventory
Budget
§Use the profit loss statement
§Pick a reasonable goal
§Break it down into months
§Encourage your inventory person to
field offers or work exclusively with one
vendor.
Alternatives to Increasing
Prices Create a Payroll Budget
§I have yet to see a practice that could
not save money on it’s payroll.
§Assign someone to do it.
§Set a reasonable goal, then break it
down by days. Schedule the changes,
don’t just hope people will leave early.
Alternatives to Increasing
Prices Create a Standard of
Care
§ Agree on hospital wide standards for the way
you approach patients and disease
§ Refer to State or National Medical
Associations for recommendations or look to
AAHA. CATalyst is another great resource.
§ Ask all the members of your team how they
can help.
§ Start small
§ Regularly measure your progress (chart
audits, software reportage, external reportage)
§ Standards of Care bond your staff members to
your clients.
Regularly track success
Compliance Tracking
Alternatives to Increasing
Prices Fight online pharmacies
§Don’t default to the idea that people are
against buying from you.
§Know how your services are superior
§ We provide one- on -one personalized education about
our products
§ We serve the companion animal community
§ We’re there if anything should go wrong
§ We guarantee our products
§ We price competitively
§ We’re convenient
§ We’re supported by manufacturers
§ We’re transparent
§ We’re safe
§ Create your OWN online pharmacy
Fight online pharms (cont’d)
§ Develop your own online pharmacy to combat
internet sales.
Alternatives to Increasing
Prices
Improved Marketing
§ Direct Mailers
§ Improved reminder systems and compliance tracking.
§ Social Media
§ An attractive, well-functioning website
§ Increase the chances that those with veterinary medical
questions will come to you.
Alternatives to Increasing
Prices
Educate your clients
§Practice discussions with your clients
§Use the internet (NCVEI recent study)
§Email blasts
§Use videos!
Alternatives to Increasing
Prices Train your team to
market
§ Hire all your staff members for communication skills.
§ Record phone calls and ask your team members to
review them as a way of giving them objective
feedback.
§ Ensure they understand the medicine and value of the
services you provide
1. Cross train
2. Have staff members try products or share
stories about services.
§ Regularly discuss staff member’s communication
success stories
1. Acknowledge them in front of the group
2. Reinforce positive behavior, ignore, as best
you can, less than stellar performance.
3. Identify empathy, understanding of client
need, targeted education and catalyzed
appointments when staff members
discuss their success.
• Ask how the communication served the mission or your
practice goals.
Alternatives to Increasing
Prices Train your staff how to
discuss financial matters
§ Provide your clients with financial options that
the staff believe in.
§ Citi Health Care as an alternative to Care
Credit.
§ Rehearse ways that we should discuss money
with our clients
1. Out of earshot and sight of other
clients
2. With a clear understanding of the
many options clients have to pay their bill
3. With respect and understanding
4. With a very clear explanation of the
consequences of default.
Review your discounts and
giveaways
§Run a Standard Fee Exemption Report
§Run a report on regular discounts
§Audit charts
§Evaluate your team members’
commitment and feelings regarding the
service they provide.
Don’t do it alone
§Develop and Use and Empowered Staff
§Consultants
§Vendors
§Associations
§Online training
Use solid Management tools
§ Mission Statement, Core Values
§ Short and Long Term Goals
§ Annual Plans
§ Budgets
§ Job Descriptions
§ Regular Reviews
§ TEAM meetings and staff empowerment
Know how you impact your
practice
§ Know who you are and how you tick.
§ Flaws in your ability to interact well with others
are magnified in your leadership role.
§ Take the time now to identify shortcomings in
your interpersonal communication skills and
make improvements.
§ In my experience, owners and managers who
belittle or degrade, play unfairly, or have little
respect for their team are the ones with the
most problems.
Thank You!!!
Bash Halow, CVPM, LVT
917 825 1630
www.halowconsulting.com
www.halowconsulting.blogspot.com
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