Feb
6
2008

Veterinarians who want to compete with low-cost clinics are best served by emphasizing high-value services instead of cutting costs, said Ernie Ward, DVM, at the North American Veterinary Conference (NAVC) in Orlando, FL, last month. Those who try to do both — provide high quality service at low prices — usually fail, he added.

Christine Merle, DVM, MBA, a consultant with Brakke Veterinary Practice Management Group agreed with Ward’s message. “Quality is linked with cost and value,” she said during an interview. “If I shop at Wal-Mart, I do expect a basic level of quality — but not as high as I expect [when I shop] at a Nordstrom.”

Merle, who is also president of the Association of Veterinary Practice Management Consultants, emphasized that “it is impossible for any business to be successful in the long run by offering high quality at a low price. In the short run you might be able to do it, but eventually your lack of profits and [in]ability to reinvest in your business catches up with you and something gives.”

To provide an example, Ward pointed to the hospitality industry, which has not tried to offer high quality at low prices. 

“There’s a difference,” he said. “You don’t get Marriott service at the Motel 6. The problem is most small businesses try to do everything, which is why they’re not profitable,” Ward explained.

If doctors focus on services — instead of commodity items that can be price-picked on the Internet — they will get a better return on investment, he said. At Seaside Animal Care in Calabash, NC, Ward ensures that prices on products are competitive. “Every product we sell [in the clinic] is the same price as PetMed Express,” he said. “But we charge 70 percent more [than some competitors] for physical exams.” 

To compete effectively, Merle advises clinics to identify how their practices are unique and identify a target base of clients. She noted that prices for veterinary care have increased and that the Internet provides pet owners with a point for price comparison. If the only aspect of care that clients compare is price, veterinarians may be vulnerable, she said. The key to attracting and retaining clients who are willing to pay for high-quality care is to convey quality, she added. 

“Low-cost provider does not mean bad medicine, just like high-cost doesnt guarantee good medicine,” Merle explained. “If a practice followed all of AAHAs standards, there is a minimum cost, and fee, that should be charged. In many cases, these practices will not and do not serve the same market as the low-cost providers that they fear. Consumers are savvy. If they can get vaccines cheaper somewhere else why shouldnt they? However, they probably think that all vaccines are alike – which we as doctors know they arent. It would behoove us to educate our clients [about] these differences and why they benefit the pet and owner.”

The Veterinary Fee Reference provides geographic price points and resources.

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