Targeted discounts may help you build your practice, but a culture that permits uncontrolled discounting will have a negative impact on your “bottom line”. Targeted discounts are designed to drive more business into your practice and often are associated with internal and external marketing strategies. For example, if your practice is a “start-up” and you want to build your client base quickly, you might offer a free exam to new clients in your first six months of operation to get folks in your community to try out your practice. If these new clients bond to your practice you will see a revenue stream from this external marketing strategy going forward. Discounts also can be offered through well-conceived internal marketing strategies such as puppy and kitten preventive care packages or through more complex health care plans, including those for adult and senior pets. These bundles of services typically are designed to increase client compliance with recommended wellness services and to provide opportunities to offer additional services for the pet throughout the year. Again, this discounting strategy should bond clients to your practice and build your business.
However, discounting randomly and on a routine basis really can run you into trouble. Veterinarians are caring and compassionate and wish to do what is best for their clients and their pets. Often we may fear a client will walk away from recommended services if the estimate is high or we assume (often incorrectly!) that the client will not accept recommended services because he or she does not have the means to pay for them. If your practice effectively discounts by removing charges from the estimate and/or the final invoice and, accordingly, gives away products and services, overhead expenses and profits are walking right out your door. Similarly, routinely deciding not to charge for seemingly minor services such as nail trims really can add up. If you carefully consider the amount of discounting going on in your practice, you may be losing 5% or more in gross revenue annually–$50,000 a year in a $1.0 million dollar practice. This type of discounting is not targeted to bring in business but instead suggests the practice does not believe in the value of the services it provides. Please do not apologize for offering quality care and consider that discounting your services in this manner even could have the unintended consequence of leading your clients to conclude your services are over-priced.
Carefully plan discounts designed to grow your business and eliminate those that diminish the value of your skills and knowledge and detract from your “bottom line”.
Carol Hart, DVM