Why new customers are vital for practice success
Our recent research reveals that client acquisition is described by many veterinary practice owners as ‘challenging’. Gaining new clients isn’t easy – it’s an endeavor that requires planning, research, time, effort and financial investment.
However, new clients are vital to your practice’s health; they replace natural attrition caused by death, relocation or lack of motivation. New patients often also require more veterinary attention than those who attend regularly and who are already on an annual checkup schedule. However, new customers with patients who require little immediate treatment also have a role to play, as contributors to a steady and reliable client base.
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.
Our research shows there is a significant discrepancy between what veterinarians think is happening within their practice and the reality. Practices who fail to monitor and respond to changes in their business and their operating environment run a high risk of being left behind or going out of business in an increasingly competitive environment.
Attracting new clients is not just about promoting services. Instead, it is also about identifying available capacity and understanding which types of clients grow the practice – all while maintaining the delicate balance between new and existing clients.
Why are new customers essential for long-term success?
There are several key reasons why new customers are vital to the growth and success of your practice. The first is that new customers lead to long-term success. If you’re buried in day-to-day practice operations, it can be difficult to make decisions that focus on your long-term growth and success. By investing time and energy in attracting new clients, however, you create future breathing space.
Knowing you have a client base large enough to survive an economic downturn allows you to invest strategically, plan for the future and capitalise on any new opportunities that arise. This means that when developments in your industry occur, or updates in technology are released, you can keep up with the pace of change and use them to expand your practice while those who have failed to plan strategically struggle.
Attracting new customers to your veterinary practice also means that they will require your services again in the future. Caring for pets isn’t a one-off occurrence; it’s a regular and ongoing commitment for your clients. Gaining a new client and retaining them results in a regular and long-term return on investment.
A clear correlation exists between practices that invest in client acquisition and the number of new clients attracted to their clinics. Recent research found that 66% of clinics that spent more than $20,000 a year on marketing attracted more than 50 new clients each month. This calculates to at least 600 new clients each year.
Assume that the lifetime value of an animal that comes in twice a year for thirteen years is $3,900 (2 visits per year x $150 Australian Average Transaction Value x 13 years average age of a dog). The 600 new patients described above could generate $180,000 in the first year ($150 ATV x 2 visits x 600 new patients). If a practice retained these patients over a 13-year lifespan, this is $2,340,000 – just from new patients acquired in the first year.
Online channels build strong customer relationships
There are a growing number of channels through which to target new clients. The online world has given targeted advertising new meaning, providing veterinary practices with an effective way of reaching their target market.
Setting up Facebook and Instagram accounts can give you an effective communication channel with clients and the broader community. Social media can provide an excellent route to capture anyone searching for a new practice and allow you to bond with existing customers. It’s important to appreciate the immediacy of social media and allocate adequate resources to keep your pages regularly updated.
Facebook advertising also allows practices to target content and advertising by location, interests or even age. For example, you can boost posts or run Facebook Lead Ads to all people with listed interests in dogs or cats within 10km of the practice location. This is an excellent way to find and market to your ideal target audience.
And, despite increasing rates, digital marketing is also more cost-effective than traditional forms of advertising, so it’s worth making use of the opportunities available to gain new clients.
Don’t become complacent about customer churn
New customers are essential for any practice; it goes without saying that a veterinary clinic’s client base will churn as existing clients leave and are replaced by new ones. Yet it can be easy to fall into the trap of assuming that demand for your services will always exist and that your lost clients will be replaced as a matter of course.
With changes to technology and communication, however, this client cycle can no longer be assumed. Before selecting a clinic, today’s prospective customers are highly likely to perform an online search and compare veterinary clinic websites, look up online reviews or actively seek out a practice with particular services. According to web.com, 50% of consumers are more likely to choose a business based on its web presence.
This signals a clear priority for clinics to be proactive about seeking out new customers. In today’s marketplace, clinics that have inbuilt, active strategies for client acquisition and maintaining their public persona have a significant advantage.
The impact on business during the global financial crisis 10 years ago should be worth learning from: markets are unpredictable, and you should never become complacent. As the Bayer veterinary care usage study highlighted at the time it was released, a decline in the number of vet clinic visits ran counter to a trend towards greater pet ownership. Until the GFC hit, there was good reason to expect an upturn in clients, rather than the resulting downturn that occurred.
While there is growing optimism in the markets and business, this is a perfect time to consolidate and build on the increasing demand for veterinary services. Having a strong client base and sound acquisition strategies in place allows you to be prepared for market changes and capitalise on them, rather than scrambling to gain clients if the economy stagnates or declines.