You've never measured your marketing efforts?
Introducing our new theoretical practice owners, Drs. Bob and Francine Bird. These two love birds met in veterinary school, got married and opened Cat Tails Animal Hospital in 2001. The feline practice has been extremely successful, thanks to a busy urban area, with young professionals living in condos and apartments where dogs are rarely allowed.
In order to allow for some quality family time, the Birds hired Dr. Knead, a full-time associate, six months ago and she has turned out to be a great addition to the team. The only issue is that there aren't enough new clients coming in the door for her to establish a significant client base of her own. Basically, she has yet to be as productive as she needs to be to support her base salary.You see, the Birds have an excellent website, but otherwise have never invested in marketing. The success of their practice has been almost entirely a result of client referrals and the visibility of their location.
In reviewing 2011 Benchmarks: A Study of Well-Managed Practices (see it at http://industrymatter.com/benchmarks2012.aspx), the Birds discover that a typical practice attracts roughly 17 to 21 new clients per full-time-equivalent veterinarian every month. They consistently met this goal when it was just the two of them, but that number hasn't increased by more than a few clients per month with the addition of Dr. Knead. As a result, they realize it's time for them to invest some money in new client marketing initiatives. They have several ideas, but aren't sure which to pursue or how to determine whether they are successful.
Rather than put all their eggs in one basket, the Birds decide to try several initiatives to attract new clients and then track whether they're successful. (See http://dvm360.com/marketingQs/ for questions to consider when evaluating a potential new marketing initiative.)
First, the practice owners must come up with an acceptable cost for a new client. Because the lifetime value of this client far exceeds this initial investment, they decide to budget $50 to $75 per new client. For a tool on how to track and calculate the cost per client for a marketing initiative, visit http://dvm360.com/clientcalc.
Ultimately, their goal is to attract at least 25 more new clients to their practice every month, which will enable them to keep Dr. Knead on a full-time basis—and then they can enjoy some time away from work.
Next month, we'll help a new practice owner implement third-party payment plans.
Dr. Karen Felsted, CPA, MS, CVPM, is the president of Felsted Veterinary Consulting. Jessica Goodman Lee, CVPM, joined Brakke Consulting in 2011.