How to calculate the cost of a new veterinary client
Want to ramp up your veterinary practice marketing efforts? First, you must come up with an acceptable cost for a new client, according to Dr. Karen Felsted, CPA, MS, CVPM, and Jessica Goodman Lee, CVPM. Because the lifetime value of this client far exceeds this initial investment, the hypothetical practice owners they're going to use (Drs. Bob and Francine Bird of Cat Tails Animal Hospital) decide to budget $50 to $75 per new client. Study the examples below, courtesy of Dr. Felsted and Goodman Lee, CVPM, to find out which route is the best deal for their practice and budget.
Marketing example No. 1
Cat Tails Animal Hospital decides to work with a new condominium development in their area that caters to young professionals. The condominium organization agrees to allow Cat Tails to be the only veterinarian allowed to market their services on the property, which includes having an advertisement and an Ask the Vet column in their monthly online newsletter. They will also be allowed to have a brochure display in the community center and by the mailboxes.
Cost per month: $450.00 (or $375.00 per month with a three-month contract)
The owners, Drs. Bob and Francine Bird decide to sign a three-month contract because they realize it may take this long for enough people to not only see their promotions but to have an opportunity or need to bring their cat to the veterinarian.
The first thing they do is enter a referral code in their PIMS for Lakeshore Condominiums and train their receptionists to use this code when asking new clients how they heard about the practice. This ensures that they will be able to track how many referrals they receive.
The first month two new clients say they heard about the practice in the Lakeshore newsletter. The second month there are six new clients; and the third month there are seven new clients.
Total investment: $1125.00
Total new clients: 15
$1125.00 / 15 = $75.00
Based on this information—and that they agreed $50 to $75 was an acceptable cost for a new client—the Birds decide to continue marketing with Lakeshore Condominiums for another three months and continue monitoring the success of the program.
Marketing example No. 2
Next Cat Tails decides to run a quarter page advertisement in an upscale coupon mailer called Starlite that is distributed in the neighborhood around their practice. While they are not guaranteed to be the only animal hospital, they are told they will be the only cat practice.
Initially the publisher wanted a six month commitment, but the Birds refused and they eventually agreed on a two-month commitment. They call two other small businesses, a dry cleaner and a health spa, and both said they have had great success with the program, although both of these companies offered an additional incentive of 10 percent off. The Birds choose not to do this, but instead offer a complimentary nail trim if the coupon is brought in on the first visit.
Cost: $1150.00 for two months
They add another referral code to their PIMS titled Starlite Mailer and instruct their team members on when and how to use it. They also enter a code for Starlite Complimentary Nail Trim so they can track this as well.
Over a two-month period three new clients bring in the Starlite coupon.
Total investment: $1150.00
Total new clients: 3
$1150.00 / 3 = $383.35
Based on this information the Birds immediately inform Starlite that they are no longer interested in advertising in the mailer. The representative tries to convince them that it takes longer to see results, but based on the current cost of $383.35 per new client the risk is too great and the Birds choose not to continue the campaign.