Old Dogs, New Tricks: Loyalty Visits the Veterinarian
Faced with daunting economics and waning client compliance, veterinary practices are beginning to embrace loyalty programs.
Loyalty at a veterinary practice? Seems reasonable, what with man’s best friend being the standard-bearer for that particular quality. But formal loyalty programs? Those seem to be just getting their legs.
Proponents, however, think the concept will continue to grow among veterinary practices and animal hospitals. They say the programs benefit pets, keeping them healthier by making it more likely they’ll be seen more often; benefit veterinarians, by returning better profits than traditional marketing; and benefit pet owners, by rewarding the best customers rather than shop-hoppers who often redeem coupons.
When Brian Macrae launched Rethink Veterinary Solutions in November 2012, he already had a business called Rethink Loyalty Solutions, a proprietary rewards operator with clients in a variety of industries. But he sensed that the veterinary industry could use a focused approach – based on conversations with those in the field, along with cautionary economic details illuminated in the Bayer HealthCare’s 2011 Veterinary Care Usage Study.
Today, Rethink Veterinary Solutions counts 130 member practices in 22 states, with about 100 of those coming aboard in 2014 as the insular industry warms to the idea of loyalty programs.
The Bayer study was a wakeup call for the industry, Macrae said, citing a litany of the findings on the economics of running a veterinary operation – “practices were losing business, not getting recommendations, customers were less compliant, average visits for the year were down, client perception of veterinary cost was that it was too high.”
Veterinarian M. Lucinda Craig, owner of Baker House Animal Hospital, also cited the shaky economics of veterinary medicine and the “huge compliance issue in our industry” as motivators for starting a loyalty program in 2014 at the Morrow, Ohio-based practice. Pets that are seen regularly have the best chance of being healthy, she said.
“The idea was to have a visual reminder – when people open their wallets, they’ll remember they need to bring Fluffy to the vet,” Craig said.
Baker House had been considering a loyalty program for a while, but Craig didn’t know how to implement it and refused to get into anything that required a lot of work for the staff. “We hadn’t really heard of other vet practices doing it. You think of them for groceries and Subway.”
When the animal hospital switched credit card merchants, it found its new provider, US Bank, offered and administered customer-loyalty programs, and signed on. Hundreds of Baker House clients have enrolled in the free program in its first year, earning 3% back (10% for senior citizens) on purchases of services, products, food and medication. Clients also earn 3% on their loyalty cards when buying gift cards and earn $10 credits for client referrals. The reward money must be spent on future visits, which Craig said gives the loyalty program a distinct advantage over coupons and other immediate discounts the practice has considered or used.
“It’s a way to make sure you see them again – as opposed to Groupon, where you’ll never see the person again,” she said.
While the loyalty program at Baker House is free, Rethink Veterinary Solutions creates paid membership programs, which Macrae thinks move people away from a discount mentality and into relationships. Member practices pay a subscription, monthly or annually, for Rethink Veterinary Solutions to administrate a program that it customizes to the practice’s specifications. The veterinary practices then sell memberships, branded for their practices, to customers.
The paid membership does not seem to be prohibitive. Macrae said the typical conversion rate – pet owners aren’t required to join – is 40% to 60% of a practice’s clientele. Some practices have seen big sign-ups in short periods of time: Animal Hospital Huntington Beach, for example, enrolled nearly 1,200 members in its first 10 months.
Membership typically runs from $60 to $120 per year and includes two visits, nail trimming and 5% cash back toward future visits. In addition, 2% of what members spend is rerouted to treat homeless local animals.
The program has helped get pets through the doors more often: Rethink member practices were seeing pets an average of one to two times per year before joining but now average four times (the goal is to get them in six to 10 times a year).
More frequent visits are the goal for Connecticut-based My Vet Perks, as well. Founder Stacey Humphrey plans a formal launch this spring after beta-testing the rewards program since December with several animal hospitals. The program uses online software, but the goal is to eventually integrate with the main veterinary practice manager software programs.
In addition to the IT rollout and program administration, member practices will also receive a regular newsletter and marketing advice from My Vet Perks. More foot – and paw – traffic should translate to better health for the animals and increased revenue for the veterinarians, Humphrey said.
“They also get more exposure to the veterinarian, which will ensure they are receiving the best medical advice and recommendations, as opposed to Dr. Google or the teenager at the pet store,” she said.
The customizable My Vet Perks rewards program can be points-based or a discount system, depending on the preference of the client animal hospital, which can also choose to roll special deals or promotions into the program. The fee structure is still being finalized: Membership cost for pet owners, if any, is still being discussed. The goal is to make the out-of-pocket cost to the veterinarian as minimal as possible, although Humphrey did not have a figure.
Baker House Animal Hospital, meanwhile, pays US Bank a small percentage of the amount it rewards each month, plus a per-card activation fee. Craig didn’t share the precise figures, only that the cost is enough that the practice notices it, but not so much to dilute the program’s value.
“There’s not really much to administrate on our end,” Craig said. “Once we set it up, we do nothing except hand out the card and run it through the credit card machine. It’s no extra work for us; if it were, we wouldn’t do it.”
Indeed, simplicity is key for adoption of loyalty programs by more veterinarians. If they wanted complicated and painful, they’d stick with forcing cats to take their medicine.
Keeping food, medicine competition on a leash
Another way loyalty programs can help veterinary practices combat challenging economics is by encouraging pet owners to buy medicine – particularly monthly products for heartworm and fleas – as well as specialty foods from their offices. Those products are easy and popular to buy online, but the allure of loyalty cash-back rewards can keep those sales in-office and help even the playing field.
The loyalty program at Baker House Animal Hospital in Ohio has only been around for a year, but veterinarian M. Lucinda Craig said she’s already noticed the practice is selling more heartworm medicine. Stacey Humphrey of My Vet Perks said veterinarians have told her the ability to win back some of the medicine-and-pet-food business would give them “a way to fight the online and big-box store battle.” It also provides a measure of control against purchasing counterfeit and potentially unsafe products from suspect online retailers, she said.