One of the side-effects of this recession is that a number of vets are discounting their prices in hopes of attracting and retaining business. The recent recession has had a greater impact in some areas of North America when compared to others. We cannot ignore how price conscious our clientele has become in these regions. Our concern for the welfare of our patients makes us more sensitive to this effect than many other professions. No veterinarian likes to see a patient suffer because the client cannot afford a service. Our practice feels the same pressure but there are so many reasons why price wars are a bad idea.
Lets examine these reasons and see if there are ways to rise above the fray.
When we become price-oriented, we join the ranks of Walmart and Target. Our services become a commodity that is no different from any other vet. When this happens, the lowest price vet becomes the most popular one. Of course many of the goods we sell and some of the services we offer are price sensitive. Many clients do shop around looking for the best price on vaccines and call fees. When price becomes the sole reason for people to choose us, there is little or no value placed upon our skill and knowledge. The key word here is value. Are we running the risk of losing our value to our clients when we engage in a price war?
This is the best time to be a single person ambulatory practice because they have such low overhead. As soon as you have staff, infrastructure, and expensive equipment you become squeezed with tighter margins when prices are lowered. Prices for our supplies, insurance, and staffing are not going down. In fact, many are going up. Now we have to work longer and harder to make the same amount of money as we did even at the same fee schedule, and even more so if we reduce our prices.
Who is going to want to join a practice that is high volume with low prices? New graduates have huge debt loads that are going to require realistic wages if they have any hope of paying them off. Also, lifestyle is a major priority for newer generations of practitioners, who have the attitude “work to live”. If new grads can’t get the job they want they will either go back to school or reclaim their old bedrooms at home. There is a significant threat to our profession if we cannot attract future equine veterinarians. Where will this leave horse owners when there are fewer vets to treat their horses?
The Future of The Equine Vet
I have been ruminating on this subject for months now. It drives me crazy when I hear a client complain about the price of our products or services. I know that the low prices charged by competitors are not sustainable and that eventually they will have to adjust their fees, die in harness, or go out of business. In the meantime our clients increasingly view the profession as purely price competitive with no other means of differentiation between practices. Does it have to be this way?
Last week I was walking in our local shopping mall. My wife and I noticed that every clothing store was selling the same stuff. I couldn’t tell if we were in store A or store B. Every one greeted the client with “Hi. If you buy 2 shirts you get a 3rd free” or some variation thereof. There wasn’t the “check this shirt out it is made with …… that wears much better than …..”. Of course the customers that were entering the stores just wanted a deal and whoever had the best deal in the mall was going to get the business. It struck me that our profession was running the risk of becoming like this. Later, I noticed a long lineup outside the door at Lululemon, sellers of high-end yoga clothing. Nothing was on sale and the cash registers were ringing. I notice this frequently at the stores that offer unique high-quality products. That isn’t the only difference. These stores become destinations, they have excellent personalized customer service, and they do not compete on price. They have a story to tell of why customers prefer them over the competition. Ultimately they will have competition but in the meantime they are solidifying their reputation with the marketplace- just ask Apple. Whatever new product they introduce sells off the shelves at a premium price because of their reputation for quality and innovation.
Are there lessons here that we can apply to equine veterinary practice? First of all we need to look at vet medicine with a fresh perspective. Our new standard has to depend on “above and beyond” customer service. We need to educate our clients about the value of the information and experience we possess. We need to solidify the value of our skills and knowledge with associates, co-owners and staff. We need to find new niches and profit centers that our competitors lack. We need to discover our story. When we have this story, excellent customer service, and confidence in our skills and abilities, we must shout it out to our equine communities. Let them know what we are all about. We’re not shy about trumpeting our cheap prices so it should be easy to turn that business model over and talk about the things that make us proud. Of course we need to price competitively but that does not mean we cannot create value for our clients. Find or create those services where price is less of a factor. Finally, we have to realize that equine practice management is an active process. Our businesses don’t hum along like they used to.
What are you doing to combat the price wars in your area?
Mike Pownall, DVM