INDEPENDENT small animal
practices should stop worrying about
the growing power of corporate
practices and work with them to deal
with the challenges facing the whole
profession, the audience was told
during a “debate” at the SPVS-
VPMA congress.
Four representatives of different
business models for
practices in the companion
animal market were discussing the issues raised
by the 20:20 Vision analysis
of the current state and
future direction of the small
animal sector. That project involved a
working group of leading veterinary
practitioners, practice owners and major
suppliers whose views were published in
a supplement to the Veterinary Record in
January.
20:20 Vision identified a number of
different threats to the financial health
of small animal practices, such as the
increased bargaining power of clients in
using the internet and social media to
influence the way practices provide their
services.
The “debate” quartet comprised
John Goulding, managing director of
the eight-centre St Georges Veterinary
Group in the West Midlands; Erwin
Hohn, head of marketing with Medivet;
Simon Innes, chief executive of CVS;
and Murray Jones, co-founder of
Ashman Jones, a newly-established
independent practice in Bath. They all
agreed that diminishing client loyalty
would change the face of veterinary
practice.
John Goulding, however, doubted
that veterinary practices would
experience the same pressures from
price comparison sites that have affected profitability in other service industries.
Veterinary clinics provide a broader range of services which don’t lend
themselves to such simple calculations.
In contrast, social media outlets could
have a considerable impact on practice
income as a result of disgruntled clients
posting bad reviews, he said.
“It is scary the damage that can be done by the internet without you even
knowing about it,” said Simon Innes.
On hearing that only about half of the
practitioners attending the debate had
any methods in place for monitoring
their on-line reputation, he urged the
rest “to shake off their reticence” in
using advanced communications
technologies.
Perhaps inevitably, given the
backgrounds of the four panel
members, discussions were dominated
by the issue of competition between
different practices, and the growth in the
numbers of corporate clinics. Ned
Flaxman of Zoetis Animal Health
chaired the session and his company was
both a sponsor and provider of data
analysis for the original study.
Performance stagnating
He noted that independent practices
were still providing 85% of small animal
services, but their performance has been
stagnating while the corporates continue
to expand, so that by 2021 the balance is
likely to be about 50:50.
As a practitioner who can claim to
have worked in 213 different practices as a locum, assistant or
principal, Murray Jones felt
he had a good perspective
on the relative merits of
different types of practice.
He was convinced that the
relative decline in
traditional small animal
practice would not
continue indefinitely and
that well-run independent
practices could compete
with the economic muscle
of much larger businesses.
Yet having worked for
many years in his native
Australia, he argued that
there was fairly low-intensity
competition between practices in the
UK. In future practices may have to
work a lot harder to attract and retain
clients, he said.
Should practices be competing ever
more fiercely or banding together to
encourage more pet owners to bring
their animals under the care of a
veterinary clinic?
Erwin Hohn was
convinced that the
latter made more
sense when only
about half of the 8
million dogs in the
UK are regularly
seen in a veterinary
practice. The rest
are not
“medicalised”
because the animals
are apparently
healthy and their
owners see no
reason to take them
to the vet.
“We need to
show that we are not just there for
disease prevention – our job is also
health promotion. Instead of fighting
for our own market share we should be
collaborating to grow this new market,”
he said.
Mr Hohn argued that the best way
to communicate with these stay-away
“clients” was to use the power of
television. As the costs of mass market
advertising are considerable, only the major corporate businesses are likely to
be able to afford it but all practices
could benefit from greater awareness of
what the veterinary profession can do.
As a former executive with a
national chain of opticians, Mr Innes
had been responsible for a multi-million
pound advertising budget. But he feared
that broadcast campaigns can be a double-edged
sword which could
damage the
veterinary
profession by
fostering price wars
between practices
in supplying
routine services,
like flea or
worming
treatments.
On the other
hand, Mr Innes did
recognise the value
of different
practices working
together to tackle
some of the other challenges facing practices. He recalled
the threat posed to the optical industry
by government proposals to levy VAT
on all its services. Those plans were
shelved after independent and corporate
opticians joined together to explain how
damaging they would be for the public.
With the veterinary industry facing
similar deregulatory pressures on
medicines prescription, vets need to
adopt the same approach, he said.
