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The mission of the HSAH Veterinary Solutions Workshops was to elicit expert advice and actionable business solutions to increase the practice success of the veterinary customers we serve while reinforcing the veterinarian to the pet owner as the best source of healthcare andproduct choices for longer healthier lives of the pet family member.

Each month we discuss the insightful viewpoints of four of the most respected and well-known financial experts in the veterinary business today. These insights were a result of a day-long workshop conducted by Henry Schein Animal Health, Elanco, Ceva, Merial and Zoetis.

Panelists:

  • Dr. Karen E. Felsted, CPA, MS, DVM, CVPM, CVA, PantheraT Veterinary Management Consulting
  • Gary I. Glassman, CPA, Burzenski & Company, P.C.
  • Dr. Marsha L. Heinke, DVM, EA, CPA, CVPM Marsha L. Heinke, CPA, Inc.
  • Fritz Wood, CPA, CFP, HF Wood Consulting

Pharmacy, Nutrition Messaging and Data Tracking - 5th in Series

September 6, 2016

Editor’s note: This is the 5th in a series of monthly articles that discusses the insightful viewpoints of four of the most respected and well-known financial experts in the veterinary business today, who came together in late 2014 and 2015 at the invitation of Henry Schein Animal Health, Ceva, Elanco, Merck, Merial, Purina, and Virbac to share their expertise and informed opinions in the areas of pharmacy, nutrition and data.

They are: Dr. Karen E. Felsted, CPA, MS, DVM, CVPM, CVA of PantheraT Veterinary Management Consulting; Gary I. Glassman, CPA of Burzenski & Company, P.C.; Dr. Marsha L. Heinke, DVM, EA, CPA, CVPM of Marsha L. Heinke, CPA, Inc.; and Fritz Wood, CPA, CFP, HF of Wood Consulting. The mission of the “Veterinary Pharmacy Diets and Data Solutions Workshop” is bringing expert advice and actionable business solutions to increase the practice success of the veterinary customers we serve while reinforcing the veterinarian to the pet owner as the best source of healthcare and product choices for longer healthier lives of the pet family member. Be sure to visit henryscheinvet.com/betterbusiness to watch live video clips excerpted from the workshop that accompany each monthly article.

Your pharmacy and the value of communication

In our previous four articles, we’ve discussed the importance of identifying and being guided by your practice’s value proposition and standard of care, and how to be price-sensitive and competitive with your pharmacy products and services.

While that all may make sense to you, does it translate as clearly and powerfully with your clients?

Practically everything your practice does – in words and actions – conveys some kind of message to your clients and potential clients. Whether it’s a reminder on an invoice or email, an e-newsletter, a receptionist’s greeting or smile, or a poster on the wall – they all serve as visual and verbal cues to your clients. That’s why it’s so important to never miss a single opportunity to communicate positive messages that will grow your business and keep your clients satisfied and loyal.

An oft-heard cliché in veterinary medicine holds that pet owners need to hear the same message at least 10 times before it finally sinks in. Follow up your reminder about an upcoming heartworm test with an article or video about heartworm disease in your weekly newsletter or on your client web portal. Post tweets or posts about heartworm disease trends on Twitter or Facebook. Write a blog conveying helpful tips for keeping your pet hearthealthy. In addition, your distributor partners likely have good quality materials you can make available in your exam room or reception area. And don’t overlook the abundance of free educational videos you can share from respected veterinary websites, as well as YouTube.

You want to send clear, unambiguous messages about the value of your pharmacy; that pricing for popular items such as heartworm and flea/tick preventative is competitive, that your stock is plentiful, and that the quality of your products are unsurpassed. But is that enough?

You also need your messages to convey the competence of your practice, and its core mission of keeping your patients healthy – whether it’s maintaining good health or restoring it after an injury or illness. Strong, consistent communication is the foundation of a trusting relationship your practice has with its clients.

One popular communication training method is scripting, which employs written message points that everyone on your staff needs to understand and follow. Nothing can damage your messaging more than conflicting signals. Scripting ensures everyone on your staff sends a consistent message in every client encounter – from the front desk to the exam room to email to the whole gamut of verbal and non-verbal communications that happen daily. Call on your practice consultant to inquire about media training, another technique that helps your staff refine their public written and verbal communication skills.

Clear communication also works to mitigate misconceptions the public or your clients may have about your practice. If your clients or potential new clients are saying things in public that are counter to the messages you and your staff are conveying, you may have a serious trust gap. Make it a point to monitor social media websites to see what people in the community are saying about veterinarians in general, or your practice. You can’t control those messages, but you can manage them. Use the client comments and reviews to make positive changes in your services and products offered.

Here are some additional tips:
  • Consider having customer service calls forwarded to a staff member in a separate, discrete room away from public areas in your practice. This not only allows unencumbered two-way conversations, but also keeps them private.
  • When interviewing office staff for open positions, don’t overlook the value of the candidate’s communication “soft skills.” How your employee maintains eye contact and listens with empathy and attentiveness are just as important as what they say or write.
  • Train your reception staff on how to turn phone shoppers into loyal clients. Show them how to transition a simple “hit and run” query about prices into a simple, direct yet powerful discussion about why they should consider getting their meds from you. In the end, your reception staff could be adding to the growth of your practice in a very important way.
  • Finally, enlist the help of your distributor representative for guidance on messaging, communication, and educating clients about specific products.

Fueling a consistent and positive conversation about diets - Nutrition

Much of what we’ve just discussed about pharmacy communications can easily apply to your nutrition business.

According to the World Small Animal Veterinary Association guidelines, a nutritional assessment and a specific nutritional recommendation be made on every pet every visit. This is the 5th vital assessment following temperature, pulse, respiration and pain. Remember every pet every time!

Consistent and clear communications about therapeutic and wellness diets can take many forms – from client reminders about upcoming preventive care exams or therapeutic refills to positive blogs or website articles espousing the benefits of healthy diets in dogs and cats.

As in pharmacy, your communications will go far in conveying messages about your practice’s dedication to maintaining your patient’s health, your competence in recommending diets comprised of the highest quality ingredients, and your sensitivity to competitive pricing.

Your message should reinforce your practice philosophy about the important role of nutrition in extending their pets’ lives.

And again, scripting ensures that everyone on your staff continues to use the same or similar messaging about nutrition, pricing and quality.

One very powerful non-verbal communication technique with nutrition is product placement. Having a healthy stock of your nutritional products on display in your reception area with posters in your exam rooms sends visual cues to your clients that your practice has plenty of product on hand.

Some additional tips about nutrition messaging:
  • Follow-up communications are critical with diets. Many clients may hesitate to ask for a second bag because of “sticker shock.” Reinforce the message that your products are competitively priced and affordable by comparing the cost-per-serving or costper- day when compared with popular brands from big box retailers.
  • Call the client about 7 days after they go home with the first bag to make sure the pet is doing well with the transition to a new diet. And remind them when they are ready for a refill. Pets usually eat about half their body weight per month so it is easy to calculate when they need a refill. A 20 pound dog eats about 10 pounds monthly and a 10 pound cat will eat about 5.
  • Make use of an exam room patient report to make written nutritional recommendations – whether you are recommending a therapeutic diet for a disease like obesity or if you are recommending a high quality wellness diet. You may also want to include a distributor partner’s promotional or educational materials as well.
  • Seize opportunities to query your clients about their pets’ eating habits during routine exams or after weighing in. Include a body condition score in the exam. Conversations can spring from that about wellness and therapeutic diets. Invite them to bring in a photo of everything their pet eats.
  • Enlist your reception staff to call clients just before an office visit and offer to have refills of their therapeutic or wellness diets ready when they come. Offer home delivery with automatic refills. Convenience is a powerful sales tool.
  • Enlist the help of your distributor and manufacturer representative for messaging and product placement advice. They may have coupons, merchandising and training available. Take advantage of the free, self-paced nutrition courses.
  • Promote good nutrition on your website and social media.
  • And consider loyalty programs for your clients. Remember – everyone in your practice plays an important role in educating clients on how to provide the best care for their pet. Every opportunity you miss to engage clients, ask how their pets are doing, suggest products and communicate your messages is a lost opportunity to provide the very best care for your patient.

DATA - Tracking and trending your data: A look at revenues and liquidity

(First of two parts) In previous articles we’ve discussed some of the key performance indicators and other kinds of data that are critical to running a successful veterinary practice. Once you’ve identified important data, you need to develop a plan for tracking and monitoring it to ensure revenue growth, stay within your budget, plan for improvements, and keep tabs on key changes in your client base, employees, inventory, etc.

Tracking and trending data can be as simple as keeping a spreadsheet showing revenues and expenses – by category, date, or numerous other parameters. But few businesses could survive without the ability to see where they’ve been, where they are now, and where they are headed. Tracking and trending data often involves comparing one key piece of information with another, such as revenue per doctor or practice expenses as a percentage of gross revenue. This allows you to see the effect of one aspect of activity on another, and makes forecasting much more meaningful.

It’s also important to keep in mind that your practice trends could be different than other practice trends. For example, if non-DVM labor costs run between 18% and 22% in a typical veterinary practice and yours have been consistently 28% for years, it may not be cause for alarm if your practice is in a robust job market compared to the rest of the country and other well-controlled costs of operations support a healthy profit margin. And yet, that knowledge may still lead you to question, and probe further for answers.

Following is a look at some of the tracking and trending possibilities with revenues and cash.

Revenues
  • Sales – There are hundreds of ways to slice and dice sales data. Some yield more meaningful results than others. Accountants typically like to give their veterinary clients a daily breakeven point to help them to understand how much sales they need to generate each day just to break even. Going further, it’s often useful to track monthly sales and monthly break-even points. When you create an average daily or monthly break-even point, you can then compare periods to better understand why some months were slower when others were robust. This kind of exercise is a quick and easy way to get a snapshot of gross revenues and identify weak spots.
  • Transactions – Another way to evaluate revenue is how it’s produced. Breaking down revenue production by practice doctors, for example, can yield some revealing and powerful information. You may find one doctor produces more revenue than another doctor. One doctor may be promoting additional services or products that produce more revenue while still meeting the practice standard of care. Often such tracking and trending can give you a strong picture of each doctor’s production and level of care. For example, if your practice just raised its preventive care exam fees by $5 and the average transaction charge for a particular doctor stays the same, you may want to look into the reason for that.
  • Receivables – You may also want to track and trend accounts receivable balances. Is the team letting client credit extension spin out of control? Is that receivables balance increasing because your credit standards have changed and all of a sudden someone at the front desk isn’t promoting payment options? And where’s that going to show up? It’s going to show up in the tracking and trending of your accounts receivable activity.
Liquidity
Most veterinarians today can quickly tell you how much cash they have in the bank, but fewer and fewer are keeping much of it for rainy days. Many practices today are running closer to the edge than they used to, and few could tell you what impact a 5% drop in revenues would have on their business. This is not unique to our profession; it’s symptomatic of many industries in the midst of an economic recovery.

When your practice doesn’t make a concerted effort to reinvest its profits, your debts are paid slower and you run the risk of being unable to weather a downturn. Reinvestment helps your practice build equity and financial strength. Many practice owners think reinvestment only applies to big capital expenditures for equipment or remodeling or renovation projects. But reinvestment also applies to building healthy cash balances and emergency funds.

Veterinary medicine is a seasonal business. Many months are strong. Some are weak. All the more reason to track and trend your financial data to maximize every opportunity to build liquidity. Make a commitment today to reinvest cash on a quarterly or annual basis. Establish an emergency fund.

Note: Part 2 next month will explore key tracking and trending issues with expenses, and client and employee data.

About the Author
Dawn Burdette, Executive Director, Sales Leadership and Development has served HSAH for over 25 years. Dawn has served in a variety of positions in sales and management. This includes training our sales force on the business of veterinary medicine and bringing business solutions to our customers that increase financial success for veterinary practices. Dawn currently serves on the AVMA’s Veterinary Economic Strategy Committee.
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