How to Increase Revenue in a Veterinary Practice
Doctor of Veterinary Medicine
Running a successful veterinary practice involves more than just providing excellent care to pets. To ensure financial sustainability and growth, it's crucial to implement strategic measures that focus on increasing revenue.
In this guide, we will explore four key strategies to enhance your veterinary practice's profitability.
1. Stop Discounting Services
One common pitfall in veterinary practices is the frequent use of service discounts. While occasional promotions may attract new clients, excessive discounting can significantly impact a practice's bottom line.
To understand how discounting affects your bottom line, take the revenue from service during a specific time period and divide it by the number of times that service was performed during the same time period.
If the price is lower than what is supposed to be charged, you know that the staff sometimes discounts this service.
Here are some steps to take to break the discounting cycle:
- Assess the perceived value of your services.
- Instead of lowering service prices, consider implementing bundled services or loyalty programs to encourage repeat business.
- Highlight the unique aspects that set your practice apart, such as specialized expertise, state-of-the-art equipment, or personalized care.
For example, the most common time that practices have discounted services is for Dental Month in February, often leading to a backlog of dental procedures waiting until then to come in for service.
Veterinary practices, in essence, are telling pet owners that they overcharge them throughout the year but now are charging appropriately for the service. Consider adding a dental product to each dental procedure, such as dental chews or water additives.
Additionally, evaluate your pricing structure to ensure it aligns with industry standards and adequately reflects the value of your services. Regularly review and adjust prices based on the cost of operation, ensuring a fair balance between profitability and client satisfaction.
2. Uncover Missed Charges
Revenue leakage often occurs due to overlooked charges or missed opportunities to bill for additional services. To address this issue, implement robust systems for documenting and billing all services provided.
-
Train your staff to be vigilant in recording every detail of a patient's
visit, from diagnostic tests to preventive care measures. One system that we implemented in our practice is an RTG ("Ready to Go") code
in our practice management software.
The provider veterinarian will put this code in when and only when all charges have been put in. The client service representative will not check out clients without the code being put in at the end of the appointment.
This prevents early checkouts and “while I’m here” nail trims from being added on and accidentally being missed. -
Utilize modern practice management software that can streamline billing
workflows, reducing the likelihood of errors, and ensuring thorough
documentation.
This proactive approach not only helps maximize revenue but also enhances the accuracy and transparency of your billing practices. - Encourage open communication with your team, emphasizing the importance of meticulous record-keeping.
- Implement training programs to enhance staff awareness of the financial aspects of the practice, empowering them to contribute to revenue optimization through precise documentation.
- Regularly conduct internal audits of your billing processes to identify any missed charges or inconsistencies.
3. Educate Clients about Pet Insurance
The demand for pet insurance has risen significantly in recent years due to an increasing desire for reliable access to top-notch veterinary services without the worry of unexpected costs. According to data from the North American Pet Health Insurance Association, the number of insured pets in North America reached approximately 5.36 million in 2022, marking a 23.5% increase from the previous year.
Pet insurance is an often overlooked but valuable resource that can significantly contribute to your practice's revenue. Many pet owners are unaware of the financial protection and peace of mind that pet insurance can offer in times of unexpected veterinary expenses. Take proactive steps to educate your clients about the benefits of pet insurance during routine check-ups or through targeted marketing campaigns.
Practices that offer information about pet insurance and thus increase their clients who have pet insurance will benefit in a number of ways. Increased treatment compliance, improved client retention and reduced financial strain on owners are all reasons to educate your clients about pet insurance.
Develop informational materials, such as brochures or digital content, explaining the advantages of pet insurance and how it can ease the financial burden of veterinary care. Train your staff to initiate conversations about insurance options with clients, providing personalized recommendations based on the specific needs of each pet.
Consider partnering with Pawlicy Advisor to be a source of education and a valuable resource regarding pet insurance for your clients. This collaboration can create a win-win situation, as clients receive added value and your practice benefits from increased insurance-driven revenue.
4. Double Down on Email Marketing
Effective communication is key to maintaining a strong connection with your client base and driving revenue growth. Email marketing is a powerful tool that allows you to engage with clients, share valuable information, and promote your services. Develop a targeted email marketing strategy to inform clients about upcoming promotions, preventive care reminders, and educational content.
Segment your email lists based on client preferences, pet demographics, or visit history to tailor your communication to specific audiences. Consider a newsletter about Senior Bloodwork information targeted to the owners of all your senior pets.
Target patients who haven’t been spayed or neutered with information about the benefits of such. Creating compelling content that not only promotes your services but also adds value to the recipient, such as educational articles, pet care tips, or exclusive offers, will give you the most bang for your buck when it comes to email marketing.
Implement a regular email schedule to stay top-of-mind with clients but be mindful of frequency to avoid becoming an unwelcome presence in their inbox. Leverage analytics to track the performance of your email campaigns, adjusting your strategy based on client engagement and conversion rates.
Final Thoughts
By implementing these strategies – ceasing service discounts, uncovering missed charges, educating clients about pet insurance, and harnessing the power of email marketing – your veterinary practice can experience sustainable revenue growth.
Prioritize the delivery of exceptional care, coupled with effective communication and strategic business practices, to ensure the long-term success and financial health of your practice.
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Doctor of Veterinary Medicine
Adam Thompson, DVM, is a small animal veterinarian at a private practice in north Alabama. He enjoys educating pet owners and providing them with the best care possible for their pets. He has a passionate interest in nutrition, dentistry, dermatology, and preventative medicine. Dr. Thompson is married to his wife (also a veterinarian), and they have two children. They also have a Boston Terrier mix named Newman.
