Category: Human Resources

Pricing Strategies for Veterinary Services and Products

by easyDVM

When you open your veterinary practice, you may struggle to set appropriate prices for your products and services. Unfortunately, the problem doesn’t go away. Even when you’ve been a veterinary practice owner for years, you will still need to decide how to raise prices to keep pace with inflation while staying competitive in your local area. If you struggle to find a pricing strategy that works for your business, use these tips to set your prices appropriately.

Know Which Prices Are Shopped

Customers are very sensitive to the prices of some services and may switch to a competing veterinary practice if you raise these prices too high. However, some prices are less likely to be the targets of customers’ shopping around, so you can raise them higher to boost income for your business. In general, the most price-sensitive services are vaccinations and elective surgeries. Urgent pet care is less price-sensitive, as customers are often not prepared to spend time shopping around when their pet needs help quickly.

Price Based on Time

If you pay your veterinarians and technicians an hourly or yearly salary, it makes sense to price your services based on how much time it takes staff members to complete them. First, work out how much revenue you need each employee to generate during each shift they work to give you an acceptable amount of profit. You can then work out a price per hour or per minute for your vets and technicians, which you can use to set prices for the services you offer.

Mark Up Medications, but Not Too Much

There are two ways to make money on veterinary medications: one is to mark up the cost of the medications, while the other is to apply a prescription or handling fee. Most veterinary practices use some combination of these two methods to ensure they make a profit. Traditionally, most veterinary practices mark up traditional prescription medications to between two and two-and-a-half times the cost price and apply a small prescription fee. In most cases, customers are happy to pay for a medication that their pet needs to recover from an acute illness. However, they are more likely to shop around to get the best prices on medications that their animals need to take regularly for chronic conditions, so you may want to reduce your markup on these products to ensure your customers keep coming back.

Offer Payment Plans

Customers are often more willing to pay higher prices for veterinary services if they can spread the payment over several months. Consider offering payment plans that allow customers to pay their veterinary bills in installments to reduce price shock. Of course, you should remember that offering a payment plan means you are effectively giving credit to your customers, so you should check that they are able to meet the repayments. In addition, you need to budget for a small subset of customers defaulting on their payment plans.

Market Your Practice as a Premium Provider

Having the cheapest prices in town isn’t always the best way to attract customers to your veterinary business. Among customers, there is often a perception that veterinary businesses that charge more offer a higher level of service. If you are confident that you can offer a better service than your competitors, don’t be afraid to raise your prices to match.

EasyDVM Practice Software is a cloud-based veterinary practice management software system. We pride ourselves in offering a system that is user-friendly, easy to learn for new team members, full-featured and elegant in its simplicity. Best of all, all devices, multiple users, all your clients and patients, always affordable.

Mentorship in the Veterinary Practice

by Sam D Meisler DVM

Guidance from a senior veterinary associate.

In a study of career path choices in the early post-graduate, “more than a third (38.0%) of respondents reported leaving a position solely because of inadequate mentorship and support.” Canadian Veterinary Journal, 2009 Sep; 50(9): 943–948.   As a practice owner for almost 20 years, I have learned that the true problem lies more in an expectation mismatch on the part of both the practice employer and the new veterinarian graduate.

New graduate veterinarians enter the work force with the expectation that their new employers will complete the incomplete education that they received at veterinary school.  On the other hand, practice owners are looking for competent associate veterinarians willing to adapt to their practice environment and culture. And both – after a few months into the relationship – can get increasingly frustrated with each other.  The fundamental issue is that even though most veterinarians enter the work force in pursuit of general veterinary practice, our veterinary schools and colleges are graduating veterinarians who are not prepared for it on day one. As a result, the idea of mentorship to solve this problem has been introduced to the new veterinary graduate.

Unfortunately, mentorship in the world of business and mentorship to a new graduate have two completely different meanings. As a veterinary business owner, I define mentorship as the assimilating and guiding of a new graduate into the practice culture by a mentor. Many new graduates, however, see the mentor as their new professor responsible for teaching them the needed skills to become a more confident and competent veterinarian. Yes, all of our more experienced associates are happy and willing to assist the new graduate with acquiring new skills. The expectation at our practice, however, is that the mentee is ultimately responsible to make sure this happens, and the mentor is there to guide and assist in how best to navigate that training within the confines of our company culture. As Chris Myers, CEO and co-founder of BodeTree, says in Forbes Magazine, “Too many young professionals fail to realize that mentorship is a two-way street. You have to deliver tremendous value to your mentor as well, and that often means working longer and harder than those around you.”

We solve this expectation mismatch by asking the new graduate in the interview process what their expectations are and what they define mentorship as.  We then clarify what our definition is.  And we explain that we will help guide their assimilation into our practice culture.  We also expect them to identify areas where they need skill development and to take our advice on how to develop those skills. We do not say we will be responsible for teaching those new skills.  We will guide them in their education and teach them how to use the resources available to learn new skills. Ultimately our goal is to develop an associate veterinarian who learns throughout his or her career.

Editorial: Don’t Lose the Forest (Veterinary Vision) for the Trees (Veterinary Headaches)

by Hunter Little

I want to change gears for a moment and step back from the business of veterinary medicine, whether it be large or small, tech-based or what-have-you. Generally speaking, I’m a big picture person, I enjoy stepping back to see the greater vision that comes together from all those small details and little intricacies. It is very easy, particularly when it comes to small businesses and veterinary medicine (either together or separately), to get caught up in the day-to-day demands. So, for today, I want to be the little voice in your head that tells you to close your eyes, take a deep breath, and think back to the bigger picture (whatever it may be for you, personally).

I ask you to do this because of a conversation I had yesterday with a friend of mine regarding the job-searching process.  She told me how, in her interview, she had expressed interest in taking the position, but wasn’t willing to commit fully because she was waiting for other offers to come in. She spoke about the possibility of a “more exciting offer” coming in at the last minute and not wanting to miss that opportunity, hinting at her underlying indecision regarding her potential career path. I didn’t think too much of her comments at the time, but, for whatever reason, I returned to them later in my mind. I thought about how I might react were I a small business owner, or a practice owner trying to hire a newly graduated vet. I considered how confusing and vexing such comments might be, how that kind of hesitation and noncommittal approach must feel to someone trying to expand their business.

Granted, this is just one example, and, in all fairness, it may seem like I am being a little harsh on my friend. But there is an underlying reality here. These kinds of tasks are the little things that we can get caught up in; the hiring and firing, the daily management and oversight, the training of new staff, etc. Even more importantly, it can be very discouraging to hear that someone you’ve taken the time to interview one-on-one and extend a job offer to hasn’t bought in to your practice and its ideals, or isn’t willing to commit.

I heard a similar story not too long ago from a vet and practice owner, who came away from the experience confused and uncertain about the nature of his practice. In hindsight, all I can say is this: don’t miss the forest for the trees. Do your best to recognize when you have zeroed in too far and have lost sight of big picture; YOUR big picture. Remember, you’re the small business owner. This product that you have put forth is crafted from your vision of how veterinary medicine should be. Take stock of that vision, and if its blocked by a mountain, make sure it isn’t just a mole hill without perspective. I don’t mean this as a preachy, sports-movie-coach’s-speech moment. Rather, I’m simply trying to maintain some sense of perspective in spite of the myriad issues that plague a small business owner. If anything, take this as a friendly reminder to step back, take a deep breath, and don’t lose the forest for the trees.

Millennials and Veterinary Care: Learn to Grow as Generations Shift

by Hunter Little

It may seem easy to brush off Millennials as the ‘selfish’ generation, occupying a universe in which they are at its social center and where everyone gets a trophy just for participating. Yet, millennials are now the largest living generation- totaling 84.3 million according to the US Census Bureau- and are coming into their marketplace prime, both in terms of earning and spending. They are also entering the civilian workforce in greater numbers, too. So, given their growing demographic presence, is it really smart to continue brushing off millennials? While it is very natural for different generations- i.e. baby boomers, Gen X’ers, etc. – to have difficulties when it comes to productive socialization and interaction, especially in the workplace, bridging the generational gap can be vital to a healthy and productive environment.

Perhaps more important than any particular generational trait, millennials are not to be confused with younger versions of baby boomers or Gen Xers. It is a losing battle to assume that millennials will grow up to fit within the mold you, as a member of a different generation,  have constructed for yourself. With each generation comes new and unique external influences and environments that shape the way we develop and interact with the world. Millennials, in particular, are growing up in much more prosperous and affluent era than previous generations. Due to this rise in affluence, people are transitioning to adulthood later than previous generations. According to Generational Insights, a business firm that studies and consults on generational traits and trends, as well as recent statistics on marriage and birth rates*, the mean age of first marriage and the mean age of first-time mothers are all increasing. This means that while millennials do experience the same life stages and milestones as, let’s say, baby boomers,  they are experiencing these stages later in life.

There is, however, more to it than simply delayed maturity. How does one, particularly within veterinary medicine, go about meaningfully interacting and engaging with millennials both in the workplace and as customers? The key is to understand the generational traits millennials identify with.1 While past generations may measure the value of work by the number of hours put in, millennials base their work ethic on the completion of tasks. As research from firms like Generational Insights indicates, millennials don’t enjoy being in the office longer than they have to. The number of hours spent on the job is not the focus, but rather how efficiently one has spent their time and how many tasks or assignments one has completed.

Millennials also like to connect socially with people and seek input from everyone around them. This is a kind of misnomer, however, as many misconstrue this desire for socialization and input as a need for constant positive reinforcement and hand-holding. On the contrary, millennials want to feel needed and be impactful, thus they enjoy learning and developing relevant skills that are valuable to their job. Because of their desire to learn and develop, millennials seek constant communication and feedback that is not only positive but constructive. The importance of communication can also be a two-way street. As much as millennials want to be taught, you can also take the time to learn from them, making the focus on building knowledge collectively rather than viewing the effort of communication and training as a chore.

These generational traits also apply to engaging with millennials as customers. Millennials care about how things will impact their lives on an individual level, both now and in the future. They are also concerned with how you and your services might make them stand out and be more distinct within the world. Thus, your marketing tools, online platforms, etc., must function as educational tools, making them feel like a more educated participant and consumer. This also means that two-way communication and transparency are important. The less automated and more human you appear, the more authentic and distinctive your product becomes in eyes of a millennial. This, of course, has ties back to millennials’ need for social platforms and communication. It’s not just having the ability to stand out and be authentic, but how something stands out and why it becomes distinctive.

So what, then, can be gained from this? Perhaps the most important lesson from all of this is the ever-present value of communication. Take the time to have discussions with your employees and co-workers about these generational differences and learn from these discussions. Such communication can flesh out differences between generations and construct a more cohesive environment for both employees and customers. More often than not, it is the company that is willing to learn and adapt to change that ultimately survives and thrives as time progresses.

1Generational Insights

References and Additional Resources:

http://atwork.avma.org/2016/01/15/free-webinar-the-impact-of-millennials-on-the-veterinary-workforce/

https://www.avma.org/News/JAVMANews/Pages/141101a.aspx

http://www.edelman.com/insights/intellectual-property/8095-exchange/

https://generationalinsights.com

What kind of people are you looking for when you hire a veterinary assistant?

by Sam D Meisler DVM

Warren Buffet – CEO of Berkshire-Hathaway and investor who avoided the internet bubble bursting – stated in a lecture to MBA students that the three characteristics that he looked for in people were energy, intellect and integrity. When you look at your top team members, you will probably find that they possess these attributes and it is these attributes that set them off from the others. Energetic people have initiative and find things to do; they are motivated about their job and energize others. Obviously, one has to have the appropriate intellect for the job or success just will not happen. Integrity, however, is the toughest to determine. And what is integrity anyway?

Stephen Covey of The 7 Habits of Highly Effective People fame defines integrity as having that unique combination of character and competency. He illustrates this point by asking would you rather have a competent but greedy surgeon perform a knee surgery on you that you did not need or an honest but incompetent surgeon perform a knee surgery that you did need – or neither.

Integrity implies competency; it implies that one gets the job done and finish tasks, and that one does it well. Someone can ask a person of integrity to do something and not worry about checking up on that person later. But that’s just half the picture. Possessing good character is essential as well. Persons with good character do the “right thing” and are honest, trustworthy and make good choices.

So how does one screen for people with energy, intellect and integrity? Generally, people with energy show it during the interview process. They are interested in what you have to say, excited about the chance to work for you, and have questions. People who are slightly introverted, however, may not show their enthusiasm until they have been on the job for a few weeks. So be careful you don’t exclude a person from your roster just because they were a little shy.

Intellect is easy to screen for. If you are not testing applicants for basic skills like reading, writing and arithmetic, then you should be. You can devise your own screening tests or use an IQ testing company like the Wonderlic Corporation . For reading and writing skills, have them read a passage from literature and then ask them to answer a few short answer essay questions on the passage.

Integrity, on the other hand, is the hardest to screen for. Here you can also “outsource” integrity screening to third parties or try to develop some questions of your own to ask an applicant during an interview. Here are some relevant questions:

Tell me about your last boss?

I would strongly urge you to consider another candidate if the person disparages a former employer. This has more to do with how they will act in your hospital and whether they will disrupt the work place by complaining about you without your knowledge. See Stephen Covey’s article on Be Loyal to those Absent. Warning: don’t expect your prospective applicants to behave better than you.

If a client comes in with a very ill pet and can not afford the medication to treat it, do you think that you should give it to them anyway if it means saving the pets life?

There isn’t necessarily a correct answer on this one. You are the owner or manager of the hospital. How do you want them to act? Should they act on their own and give the medications away or should they ask you about it? Consider how many of your employees fit in the same profile where they can’t always afford the medications either. It’s about trade-offs and about moral trade-offs in particular. How the candidate presents the trade-off to you says a lot about how they would behave in the future.

If you saw a fellow employee smoking marijuana outside of work and it was a long enough time from their next shift as to not interfere with work, what would you do?

This gets at the heart of attitudes towards illegal drugs period. Again, the answer depends on you and how you feel. Be careful, if you don’t mind your employees having relaxed attitudes against drugs for recreational use then expect them to have some relaxed attitudes against stealing if they have a good reason to do so (ie like “I couldn’t afford the Heartgard”).

Describe a product you were able to sell in a previous job position that you didn’t believe in yourself. What techniques did you use to overcome this?

This is sort of a trick question. I would be looking for the “deer in the headlights” look. If they can’t come up with anything then that’s good. If they do come up with something, then examine it carefully. Obviously, in order to sell something that they didn’t believe in, they had to make some sort of trade-off (ie dishonesty vs a paycheck, or dishonesty vs feeding my family). This question is from personal experience. I had a receptionist who was my best “seller” of pre-anesthetic bloodwork and pain medications (before we made them both mandatory). When I asked whether she believed in them, she replied, “Heck no. But I can sell anything.” She later became a very disruptive force in the clinic as soon as she no longer believed in me.

These are just some thoughts on the hiring process. Indeed, it can be very tough. Also, please be mindful of staying well within the law with your interview questions.

Is Veterinary Staff Turnover Really a Bad Thing?

by Sam D Meisler DVM

“How much employee turnover do you have at your veterinary hospital?” I squirmed down into my seat as I reflected on the high turnover that we had last year. It was late January and I had just finished printing out W2 forms the week before. For those of you outside the United States, W2s are a tax form that you have to send to each employee – current or former – that worked for you that year at the end of the year . The number of forms that were to be sent to former employees was quite significant. And now the veterinary associate candidate posing the question was expecting an answer.

I dug in my heels and vowing not to sound too defensive, I replied to her question with the following analysis. First of all, I divide turnover into two categories: “good” turnover and “bad” turnover – sort of like “good” cholesterol and “bad” cholesterol. Good turnover counts those employees who did not fit in with the hospital and have now left – either voluntarily or involuntarily. Bad turnover, of course, counts those employees who you really wished would have stayed.

Every year after printing my W2s, I sort through them and divide them into the following piles: current employees, fired employees, those who left and we were happy about it, and those who left and we were sad about it. I then take the number in the first pile (current employees) and divide it by the total number of employees minus the number in the two middle piles. That is my true “retention rate”. In other words, I am most interested in what percentage of employees who succeeded at the hospital did I actually keep.

This brings one to an important statistic; how many employees were actually encouraged to leave or were terminated? A competent practice manager will not be afraid to make tough decisions where necessary. There are many practices where no one is ever terminated; either the hiring process is so fine-tuned that only great employees are hired or someone at the top cannot terminate anyone. Usually, the latter is true. And in these practices, great employees tend to stagnate as they see co-workers get away with subpar performance.

When I do lose a great staff member, I usually have to hire up to 7 employees before I find a suitable replacement. You can imagine what that does to your turnover rate if you only looked at it in the traditional sense.

So the next time someone asks you about your employee turnover, be proud if you have made tough decisions that year in order to cultivate a great staff.

Unfortunately no matter how you classify it, turnover has costs. With each new hire, you incur the cost of time and money spent looking for him or her, the cost of training, and the cost of incompetency. Your time is valuable and time spent placing advertisements, going through applications and interviewing must be factored in. The cost of training includes the hours paid for training the new hire before they are even exposed to their work environment, the cost of slowing down your other employees as they mentor the new hire, and the cost of the new hire as you double them up with one of your current employees shifts until they are ready to handle the shift on their own. The cost of incompetency includes the charges a new hire will potentially miss, the services the new hire will potentially not sell, and the potential clients the new hire will turn away. As you may note, these costs can convert to quite a significant monetary amount. As such, preventing “bad” turnover – losing valued employees – and limiting the cost of “good” turnover – replacing incompetent employees – becomes imperative.

To avoid losing valued employees, many factors come into play. Employees leave for a variety of reasons which include but are not limited to the following: poor work atmosphere and inadequate compensation. These reasons are not mutually exclusive. For example, employees will work at a hospital with a poor work environment if the compensation is high enough and vice versa.

Enhancing the work environment is a whole topic onto itself. One should start with an assessment of your hospital’s work environment by surveying your employees. At SurveyMonkey.com, a free basic membership allows you to conduct an online survey with up to 10 questions for up to 100 employees.  The survey should be done anonymously. To make sure that an employee does not submit more than one survey, have everyone pick fictitious names or numbers out of a hat which they can use to identify themselves on their surveys. Include questions about their feelings on their current compensation, the amount of recognition they receive, whether or not they are currently seeking employment elsewhere, how they feel about their co-workers in a general way, whether or not they enjoy coming to work every day, etc. Include a suggestion area at the end. Be prepared for some interesting answers. Revealing these answers to your employees may be helpful (make sure that you edit out anything that might reveal an individual’s identity). You now have a good foundation to start from to enhance your employee’s work environment.

Enhancing compensation may not be that simple. Generally, twenty percent of hospital revenues are budgeted for overall non-veterinarian employee compensation. The only way to increase this budgeted amount relative to the amount of employees is to increase prices. The immediate effect of increasing prices is either to increase revenues allowing you to pay your employees more or to decrease the relative amount of services performed freeing up your employees time or a little of both.  As an aside, the best way to immediately improve the quality of care in any hospital is to raise prices to the point that clients begin to opt for fewer services per patient; your employees now have more time available to deliver these chosen services. Many veterinarians would then argue that you are compromising your patient’s care by doing this. On the contrary, you have made an ethical decision that you will not undervalue your services to the extent that your employees can not spend the needed amount of time on them. Curiously, as your employees are paid more and have more time to communicate the value of needed services to your clients, revenues now increase due to more services being sold.

Obviously once prices are set, the budget limits overall compensation. Individual compensation, however, is only limited by an individual’s productivity. Three very talented employees may produce as much as four or more not so talented employees and as a group deserve the same overall compensation. Being willing to terminate incompetent employees – “good” turnover – allows one the opportunity to find these very talented employees. Cultivating these talented employees depends on having both an excellent training program and an encouraging work environment.

EasyDVM Practice Software is a cloud-based veterinary practice management software system. We pride ourselves in offering a system that is user-friendly, easy to learn for new team members, full-featured and elegant in its simplicity. Best of all, all devices, multiple users, all your clients and patients, always affordable.