HOW often do you analyse your key performance indicators (KPIs) and what score would you give your clinic based on figures from your practice management system? The answers, according to Greg Robinson of Rx Works, are probably “not enough” and “could be better”.
Speaking at the BSAVA congress about improving process based on PMS data, he was scathing about industry averages.
On many KPIs the profession is failing to brush up its protocols to convert and retain customers, or even to charge them correctly, and the result is underperforming businesses. Typically, on preventive health measures, many practices inadequately bond clients.
Nearly everyone the same
“If you think this isn’t you, it is, because I’ve analysed hundreds of practices and nearly everyone is the same,” says Greg.
“If you are in preventive health then you expect your clients to come back every year. If you bond your customers, then every year they will come back and buy a vaccine, a wormer or some other type of preventive healthcare.”
How do you improve ratios such as new client to lost client, or customer retention? One crucial way is to send a reminder yet, on average, practices only send reminders to 70% of clients.
Greg recounts his personal experience of having two dogs neutered at a local practice. “I did not buy a vaccine and because of that no one put a reminder on the system.
They still aren’t vaccinated after three years. What happens next? I’m gone, that vet does not care about my animals. It is about service. It costs so much to get a client that you do not want to give them away with laziness.”
If the average lifetime revenue per client is £6,000, then two e-mails, SMS messages or mailshots, followed up by a 12p phone call to keep them is great business, says Greg. Response rates to reminders are static around the 50- 60% mark, so contacting an extra 200 clients will net you 100. That converts to extra annual revenue and lifetime revenue for each client. It also tips retained versus lost clients into positive figures.
“You can take these numbers to the bank,” he says. “I’ve done 600 of these analyses. Thirty per cent of animals seen in a practice have no reminder sent. For example, this practice has 73% of customers being sent reminders. When you get to the new customer process it drops to 52%. Every exam you do should have a reminder on it.”
Drive client loyalty
Put reminders on the PMS: “It is not just for invoices and receipts, it drives your marketing, retention and client loyalty,” says Greg.
“Your reminder can simply be about a health plan. Part of marketing is to actually get something there. If you are not then that is why retention rates are low. You don’t want to be turning over your customer base every year, you want to bond clients and keep them there forever.”
Another area where practices miss out is charging incorrectly. How many charge for all aspects of hospitalisation, including fluids, blood or hospital exams? “When you miss charges you miss profit,” says Greg. “You pay for your staff, amenities and drugs but you did not get paid.
Inconsistent message
“It might only be five minutes but you should charge for morning and evening wards, or that extra bag of fluids. The amount of times I see where this is not charged is incredible. It sends an inconsistent message.
“If you are charging different amounts to different clients it is inconsistent. People think what I do increases charges. It doesn’t. What it does is to get people charging consistently.”
Setting up your PMS to charge for each process removes human error, because we tend to forget things as the number of steps in a process increases.
“That is what happens in your charging process, someone asks you a question and you miss an anaesthesia fee. When you have a 10-step process, you only have a 20% chance of getting it right. You don’t use these tools in your software and you lose money.
“As an animal walks through the door from the consult room, the estimate is you lose between five and 10% of revenue in missed charges. “In the US they say that every vet gives away one free consult per day. If you have a 10-vet practice, that is 10 free exams per day.”
Greg highlights a London practice that fixed its theatre and hospitalisation process to increase average revenue per surgery from £350 to £529, making an extra £70,000 in one year despite conducting 130 fewer surgeries.
Charge correctly every time
“This is what happens when you fix process, fix your software and get it running properly,” he says. “You stop missed charges and make sure you charge correctly every time.”
How many practices charge for expertise? An average oral haematoma surgery may take 30 minutes; you can do them in 10 but some take 45 minutes. Charge for 30 minutes every time.
Shortened surgery times are down to clinical expertise: charge for expertise. Then estimate correctly.
“One way is to look at all surgeries and the time they take, then nail an estimate for each one,” says Greg.
“If you can tell me what the price of a surgery is then you will get it every time, if you can’t and you then want more, you will lose a client because you could not be bothered to get your estimate right.”
If you fix processes and automate them using your PMS, then more profit is ploughed back into the business, concludes Greg.
“Then you can pay staff better, get students coming out and earning decent money for being a veterinarian.
“If you are leaving 5% or 10% of revenues in your business, then you need to get at it.”
