Traditional veterinary practices could go the same way as Blockbuster Video and Virgin Megastores if they don’t respond to the threat posed by predatory digital corporations, SPVS members were warned at their annual congress.
Veterinarian and entrepreneur Thom Jenkins has established veterinary businesses in the UK, US and the Far East and more recently set up the online communications and marketing tool PetsApp. He told colleagues at SPVS Congress in Birmingham on Thursday 26 January that companies like Amazon and Disney view the veterinary sector as a potential source of new business and will be ruthless in their efforts to displace the current providers.
Veterinary practices are already facing a difficult economic climate, and new competition will impose further pressure on their profitability. Optimists may say the veterinary industry has weathered previous downturns, but the current situation could prove more damaging, said Thom. Over recent months, practices have been maintaining their profitability by raising prices above the level of inflation – their freedom to continue that strategy will be limited by clients’ unwillingness to pay more.
Veterinary practices are already facing a difficult economic climate, and new competition will impose further pressure on their profitability
This means it’s time for practices to reassess their business model. “We have been content to take a shrinking slice of the pie because the pie has been growing in size,” he said. “Now the pie is shrinking, and potential rivals like Amazon are circling – they want to eat your lunch.”
Veterinary practices can never become purely digital businesses because they must maintain a physical presence in the practices where they manage their patients. But there is a false dichotomy in discussions about digital and traditional businesses – most companies need to maintain a presence in both domains. “It isn’t a choice between clicks and bricks; in the real world, you need both,” he said.
‘It isn’t a choice between clicks and bricks; in the real world, you need both’
Moreover, veterinary practices have an advantage over their rivals in supplying these services. “Only veterinary practices have an established presence in the market and an existing relationship with their customers,” observed Thom. “What they need to do is to create more ‘digital touch points’ in the process through which pet owners identify and access animal care services. But they need to start doing this now.”
When many practices are understaffed and under pressure, it is surprising to learn that only 8 percent of potential pet health problems result in animals coming into veterinary clinics for assessment and treatment. The other 92 percent are either ignored or left to resolve themselves, or are cases where owners seek help from non-veterinary sources.
Only 8 percent of potential pet health problems result in animals coming into veterinary clinics […] If practices are to achieve their commercial and animal welfare goals, they must tap into this pool of untreated animals
If practices are to achieve their commercial and animal welfare goals, they must tap into this pool of untreated animals. But they must find a way of filtering out cases that don’t have to be seen immediately or at all. Vets cannot rely on their clients to decide if an animal needs urgent veterinary attention – they don’t have the training or necessary knowledge. Thom recalled a case when a client insisted he examine a lump on a cat’s abdomen: a cursory inspection was enough to conclude that the object was a nipple, he noted.
But cases that pass through an online triage process and arrive in the consulting room won’t necessarily contribute to the economic success of the practice, warned Thom. If a patient doesn’t require further examination or treatment, the consultation will represent a loss leader – “it won’t help to keep the lights on,” he said. So practices should look more closely at how they operate and concentrate on activities that help keep them in business.
Practices should look more closely at how they operate and concentrate on activities that help keep them in business
Standard business theory models three factors that are important in attracting and retaining customers: quality, cost and convenience. Conventional veterinary practices will generally perform worse than their potential rivals in two of these areas. They cannot match the retail giants on the price of products such as pet food and parasiticides, nor is it convenient for pet owners to load their car with three small restless children and a sick dog to drive to their usual veterinary clinic. But vets do win on the quality of their services, so the solution for practices is to find ways to provide their services in ways that clients find more convenient.
Practices should explore how companies like PetsApp can help them to use telemedicine to provide an effective triage service. Digital technologies can also help practices better communicate with clients over issues such as post-operative care.
Vets do win on the quality of their services, so the solution for practices is to find ways to provide their services in ways that clients find more convenient
One of the significant sources of inefficiencies in small animal practice will be attempts to communicate with pet owners by telephone. When clients call for news on their animal following surgery, it will invariably be when the staff involved are busy with another patient. Subsequent attempts to call the owner will often descend into a frustrating and wasteful game of “telephone tag”. So a messaging service that allows staff to respond using standard message templates will save time and effort, he observed.
The ultimate goal is to use technology to transform the basis of the interactions between veterinary practices and their clients. Instead of a traditional transactional relationship, vets need to develop a membership model in which clients pay a regular fee to ensure that all the health and welfare needs of their animals are being met. “There is no business better placed to offer a joined-up, online/offline, curated customer experience than the local veterinary practice,” concluded Thom.