Financial experts used to say veterinary medicine was “recession proof.” They offered that veterinary care was an essential service and clients would forgo other family expenses before they cut back on their pets’ care. Then the financial crisis hit, and the experts were proved wrong. In the aftermath of the financial crisis, many pet owners were struggling to make ends meet and, in an effort to save money, they stopped going to their veterinarian. Canadian veterinarians saw revenues fall for 1 year and it took 2 years for veterinary net incomes to recover (Source: 2015 CVMA Economic Report).
The threat of a trade war with the US, tariffs, and rising prices could lead to a repeat 10 years ago, with pet owners pulling back on family expenses and cancelling their veterinary appointments. Lessons learned from veterinary hospitals that were able to minimize the financial damage to their practices during the financial crisis can help veterinarians today protect their practice from a potential decrease in clients and falling revenues.
GET BACK ON THE PHONE
Client scheduling apps are able to message a thousand clients in the blink of an eye, but they are designed to make 3 attempts and then quit. If the client does not respond within 3 tries, the software assumes they don’t want to come in and no further action is taken. During the financial crisis, forward-thinking practices saw their clients dropping and started running reports on clients who did not respond to the scheduling app and started calling them on the phone; this was more effective than one-way electronic messaging in controlling communication, managing objections, and letting the client know that they were not forgotten. If a client said they could not afford to come in, veterinary staff would empathize and ask if they could call back in 3 months, hoping their situation would change. Phoning clients helped limit the number of lapsed appointments.
WORK HARDER AT SHOWING CLIENTS THE VALUE IN THE APPOINTMENT
Research by Dr. Jason Coe on the value of veterinary care indicates that perspectives are different for veterinarians and pet owners. According to Dr. Coe, most veterinarians will talk about the value of a veterinary procedure in clinic terms and focus on what they did, how they did it, and how much the equipment and staff cost. In contrast, pet owners want to know how the veterinary procedure will improve the future health and well-being of their pet.
Veterinarians tend to focus on what they did, whereas clients want to know what will happen in the future. Telling a client their cat needs a dental cleaning because their cat may be experiencing pain and will be more comfortable after the procedure, means more to clients than a breakdown of the cost of procedures.
FILL GAPS IN THE APPOINTMENT BOOK WITH LONGER VISITS
Before the financial crisis, the average appointment time for Canadian veterinarians was 22 minutes (Source: 2012 CVMA Economic Report). During the financial crisis, clients were putting off their veterinary visits and veterinarians started seeing gaps in their appointment schedule. They started filling the gaps in their appointment schedule by expanding the appointment time to spend more time with each client. Revenue per client went up because extra time in the appointment provided an opportunity for the veterinarian to extend discussions with the client. More discussion led to more dentistry, higher nutrition sales, and better care for pets. Longer appointments were so successful, many practices made longer appointments “the norm.” The average appointment time grew and today, the average appointment time for veterinarians in Canada is 28 minutes in 2024 (Source: 2024 CVMA Economic Survey).
CONTINUING TO RAISE FEES
Raising fees during troubling economic times seems counterintuitive but during the financial crisis, veterinarians who raised their fees to cover inflationary costs fared better than veterinarians who held fees constant or even lowered fees. One lesson learned from the financial crisis was that clients who stopped going to their veterinarian were not stopping because veterinary fees were too high; rather, they were not going to the veterinarian because of their personal economic situation. Veterinarians who lowered their fees during the financial crisis found this out the hard way. An Ontario veterinarian who purchased a companion animal practice during the financial crisis lowered her fees when she bought the practice to support her clients. “All it did was lower revenue from existing clients. The clients who were not coming in didn’t care about lower fees — they were not coming back until their financial situation improved.”
Clients who continue to go to their veterinarian during a time of economic uncertainty are less affected by the economy and can withstand a moderate, inflationary fee increase. Holding off raising fees to cover increasing costs makes the eventual fee increase a lot higher and a lot more uncomfortable for clients.
Veterinary medicine may not be recession-proof, but you can take steps to minimize the drop in revenue by utilizing existing resources to increase communication with clients, better communicate the perception of value, and keep up with inflationary costs.
Footnotes
This article is provided as part of the CVMA Business Management Program, which is co-sponsored by Merck Animal Health, NVA Canada, Scotiabank, and VetCPA.
Copyright is held by the Canadian Veterinary Medical Association. Individuals interested in obtaining reproductions of this article or permission to use this material elsewhere should contact permissions@cvma-acmv.org.