Increasing new client acquisition with practice marketing

THE ART OF ATTRACTION

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Every business needs to attract new customers to grow. Historically, in the veterinary industry, some practices have been reluctant or unsure of how to achieve this. Attitudes are changing, but it unfortunately took the global financial crisis 10 years ago and the subsequent downturn to bring the importance of acquiring new clients into sharp focus. As a result, the majority of practices now undertake some form of action to increase client numbers.

New clients are vital to a practice’s health; they replace natural attrition caused by death, relocation or lack of motivation and in so doing help to breathe new life into a practice.

Despite the importance of new clients, few veterinarians have in-depth knowledge of how to improve results in this area. The cause is a significant gap in knowledge, which, if not corrected results in ill-informed decision-making, misallocation of resources, lost revenue and low patient numbers.

We understand the importance of gathering data to determine the strategy of a business. Without robust systems to collect and monitor data it is impossible for veterinary professionals to obtain insight into their practice performance.

Our research shows there is a significant discrepancy between what veterinarians think is happening within their practice and the reality. Practices who fail to log and track results run the severe risk of being left behind or going out of business in an increasingly competitive environment.

We regularly and systematically collect and analyse data from the industry and gather anecdotal feedback from frontline staff and practice owners. This data helps to identify the aspects of practice operation that affect profitability and efficiency as well as providing insight into why and how the best performing practices outperform the rest.

Our 2017 UK Veterinary Industry Research Survey canvassed 79 practices
with questions designed to provide insight into practice operations. Specifically, they were designed to get a gauge on practice marketing. This information was supplemented by our Global Veterinary Research Annual Survey, which questioned 336 practices in 2016 and 254 in 2017.

This white paper outlines the results of our research and the conclusions as to what ‘Best Practice’ processes might look like.

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Table of Content

 

SECTION 1 – SEIZE THE MOMENT

Confidence is vital to encourage business investment and consumer spending. Following the global financial crisis and subsequent downturn, we are now seeing the return of confidence across various business sectors, including the veterinary industry. The rise of ‘Pet Parents’ or ‘Fur Babies’, combined with increased consumer confidence, is helping to fuel an upturn in practice visits in the veterinary sector.

A 2018 Statista report estimates there are 54 million pets in the UK. The survey and statistics experts say that “the United Kingdom is a nation of pet lovers, with 44 percent of the population owning some sort of animal”.1 Statista also reports that total consumer spending on pet products and services in the UK in 2016 was £4.58 billion. This reflects an 80% increase since 2005.2

Despite the rising challenges of corporates and online stores, optimism about the future is gradually increasing and practice priorities are changing with this. The previous focus on reducing costs, business consolidation and maintenance is fading, and there is now both a willingness and a need to embrace new
opportunities and employ expansion strategies that attract new clients and help strengthen practices.

Attracting new clients is not only about promoting services, although this is an important aspect of the marketing mix. It is also about identifying available capacity, understanding which types of clients grow the practice while maintaining the delicate balance between new and existing clients.

A significant factor in acquiring new clients is removing any obstacles; a key way to do this is to allow them to book appointments at a time and place that’s convenient for them. The current pace of technology means that customers expect to have access to information and services at a time that fits around their busy lives.

This includes being able to make a booking at any time and receive immediate confirmation – a practice now widely adopted throughout service industries, with customers now expecting it. Veterinary professionals should be aware that if they do not provide such a facility, their potential and current clients may look elsewhere for a practice that does.

SECTION 2 – NEW CLIENTS – THE LIFEBLOOD OF EVERY PRACTICE

Anecdotally, practices should work off the assumption that to grow every full-time equivalent veterinarian in a practice needs 18-22 new patients a month. It is suggested that this number would account for organic attrition and allow for modest growth. The number does vary from practice to practice depending on their specific customer attrition, which in turn is influenced by their practice type, client demographics, and reminder/recall strategy.

To gain insight into how practices were performing vs the recommended amount, our research canvassed the industry to investigate how and to what success new clients were acquired. While word-of-mouth referrals remained the most popular source, concerningly, more than 7% of those surveyed said they ‘don’t know’ the source of their new clients.

Around 19% of those surveyed said they attracted no more than 10 new clients per month per site, with a further 15% saying they obtained only 11 to 15 new clients. The average UK practice has two full-time equivalent veterinarians and, using the statistics in the first paragraph above, each practice needs 36-44 new clients a month. The results of our survey show then that 34% of practices could be falling significantly short of this target.

While almost every practice surveyed (96%) indicated they want to grow their practice, there is a gap in measuring how they are tracking towards this goal. Just 56% measure how many new clients visit monthly and only 23% track the number of lapsed clients. (A lapsed client is a customer who has visited the practice in the last four years, but not in the last two).

These figures demonstrate a lack of appreciation of the importance of essential business data and a lack of awareness of the potential for new business from within a veterinary practice’s client database.

SECTION 3 – STRATEGIES TO ATTRACT NEW CLIENTS

The difficulty in attracting new customers becomes more evident when considering that 29% of respondents indicated they found the task ‘challenging’. Although with 8% unaware of the source of their new clients, it is easy to understand why some of this group finds it difficult to identify which marketing tools are working or not.

The most popular method to attract new clients was identified, with data revealing 68% of practices received the majority of their new customers from referrals from existing clients. Practice websites, social media marketing and online reviews were the next most ranked sources of new clients.

Sixty-nine percent of all respondents currently use social media, but only 7% list it as their most successful method of attracting new clients. Market experience suggests this is a significant opportunity for further growth. Of the practices which attract a higher than the average number of new clients per month, most consider it a critical part of their marketing mix.

Our survey revealed that other than referrals, practices use three main channels of communication to attract new clients – each of which demonstrates the growing popularity of online (digital) marketing. Ten percent suggest the majority of their new customers come from their practice websites, another 7% suggest social media marketing and a further 5% suggest online reviews provide the best results for attracting new clients.

Although practices increasingly rely on digital channels to attract new customers, print advertising still tops the list for marketing spend overall with nearly 38% suggesting this is their most substantial marketing cost. Interestingly, this is despite the fact that no respondents said it provided the best results. Seven percent of the group did not know or measure what their highest spend marketing channel was.

An increasing focus on digital marketing is visible in the online communication tools and platforms which practices use to reach out and interact with clients. 96% percent of those surveyed indicated they had a website and 84% use social media, although only 33% accept fully integrated online bookings (not just an online form). Only 18% have a customer online portal.

Spend on marketing activity was spread significantly across those surveyed. At the top end of the scale, 2.5% spent more than £15,000 per annum, through to 26%, who spent less than £1,000. The latter figure represents a minuscule investment in marketing and promoting practices by a full quarter of veterinary professionals. In another telling statistic, 25% were unable to quantify their marketing spend.

An incredibly compelling statistic from the sample of practices that spend more than £15,000 a year on marketing was that 50% attract more than 50 new clients monthly. Moreover, of those that spend more than £7,000, 40% attract more than 50 new clients monthly – calculating to at least 600 new clients a year.

Assuming the lifetime value of an animal that comes in twice a year for thirteen years is £1,300 (2 visits per year x £50 UK Average Transaction Value x 13 years average age of a dog). The 600 new patients described above could generate £60,000 in the first year (£50 ATV x 2 visits x 600 new patients). If a practice retained these patients over a 13-year lifespan, this is £780,000 – just from new patients acquired in the first year!

On the other end of the spectrum, of the 26% of practices that spend £1,000 or less on marketing each year, 33% attract less than 10 new clients monthly, and only 4.7% attract more than 50. This shows a correlation between increased marketing spend and new client acquisition.

Section 4 – adopting best practice

Our latest survey research, combining marketing trends and the anecdotal knowledge of how our most successful customers tackle the problem, has identified several key activities that we believe will help drive new clients into a practice.

Our findings have determined that directing a little more time and investment in the right areas can make a significant difference.