How many times while making an online purchase were you alerted that if you spent, say, just $10 more, you would qualify for free shipping? So, you did the logical thing and bought something for $50 that you didn’t really need, and you felt great about it! Or how often did you pass up a less expensive product because you were collecting loyalty points? That is the magic of customer loyalty programs: They drive strategic purchases by incentivizing people to change their behavior.
Thinking about loyalty programs in veterinary practice might strike you as odd, but as it turns out, they are the perfect solution to improve two things we care deeply about as veterinary professionals: patient visits and client compliance. They also elevate and enhance pet owner satisfaction and happiness.
Why Do They Work?
Understanding loyalty programs is a matter of science. When a person has a positive experience, the reward center in the limbic center of the brain releases dopamine, which increases serotonin levels and produces oxytocin. These “happy hormones” cause a person to feel a surge of positive emotion. When we associate a positive reward with spending money at a veterinary practice — arguably a negative experience in some cases — we can change the emotional response by harnessing those neurotransmitters.
Shortly after I launched a loyalty program at my veterinary practice, one of my best clients practically screamed at me across the lobby: “Hey, Dr. Stacee! Guess what? I just got eight stamps on my loyalty card. I’m so excited!” She was under the influence of her hormones, which caused her to focus more on the reward than the $800 invoice.
Choose One
What is the best type of loyalty program for your practice? Here are three examples:
- Membership: Clients pay a fee to become a program member and then unlock discounted services, like a wellness exam, or a percentage off of pharmacy purchases.
- Points: Clients earn one point for every dollar spent. When the required number of points is collected, the client immediately earns something for free.
- Levels: Clients who reach a predetermined level through purchases earn a reward that can be used at a future visit.
I recommend a levels-based loyalty program for veterinary practices because it will:
- Emphasize additional purchases of compliance items at checkout. These could include a box of parasite protection, a bag of therapeutic food, a bottle of nutritional supplements or a previously declined lab test.
- Eliminate the discounting of services, which most practices can’t sustain given their profit margins. In a levels program, there is no service discount. In the mind of clients, they are “unlocking” prizes for being loyal. They are winning.
- Encourage another visit. For example, Sports Authority rewards me with a small credit on my account as I make purchases. I suddenly give serious thought to buying a $75 North Face jacket because I have $5.62 on my store account.
Be Strategic
When designing your loyalty program, what’s important is to be strategic about the behavior you want to drive to grow your business. I find many practices not giving enough thought to the desired results, so they step into obvious traps.
Let’s look at three examples of loyalty incentives that don’t make sense for a veterinary practice.
1. Buy 7 Bags of Dog Food and Get 1 Free
The margin on pet food is lower than on services. Pet supply stores in your area probably offer a similar free-food promotion, and you will have a hard time doing it better. Consider this instead: Buy seven bags of dog food and receive a complimentary wellness exam. By doing this, you rely on your core business offering (veterinary medicine) to examine a patient and perhaps identify something that requires your expertise, like a new lump or a fractured tooth. Pet stores and online retailers can’t offer this type of high-value reward.
2. Buy 7 Anal Gland Expressions and Get 1 Free
Is your goal to do more anal gland expressions? I doubt it! Perhaps the better reward in this situation would be a free consultation with a surgeon.
3. Board 10 Nights and Get the 11th Free
Such a deal will drive longer stays, which isn’t necessarily bad, but when we think of the major benefit of having a boarding facility attached to a practice, it’s to attract more veterinary visits. Boarding is a huge opportunity to identify pet health problems and offer solutions. Consider this instead: Board 15 nights and get a $100 credit toward the cost of a veterinary visit. This will allow you to fuel your primary business and wow new clients who might be using your competitor for veterinary services.
What Drives Pet Owners?
What motivates clients most isn’t the dollar value of the reward but the opportunity the reward delivers. The best rewards elevate the client experience. For example, if one of your goals is to increase your dentistry business, a loyalty program can fuel it. If we require eight stamps to unlock $50 off a dental procedure, a client might be motivated to spend more and access the reward early. It’s a trifecta win for all involved — the patient, client and practice.
I love dental procedures because:
- Clients can do something to positively influence their pets’ health.
- It’s a high-value procedure.
- The pet feels a million times better because most of them have hidden oral disease.
A side note: If you’d like to get out of the “February Is Dental Month” routine where we cram all our procedures into one month and discount them, a loyalty program with a dental reward will allow you to escape.
Don’t Be Exclusionary
Make sure your loyalty program isn’t just for dogs or cats, but for both. It needs to benefit healthy pets and sick ones, too. For example, if your loyalty program rewards nail trims, you alienate almost every cat owner. If you reward therapeutic diet purchases, you alienate healthy pets.
Be sure to design your program to deliver the most bang for the buck by serving the masses, not the small groups. The more clients who can participate, the better your return on investment. In an ideal program, everyone wins.
Dedicate Time and Effort
Your first inclination will be to figure out how to automate the entire loyalty program so that no additional work is needed, but heed my advice: Be careful of automation. The “set it and forget it” approach means you will leave lots of money on the table.
Let me explain.
I worked at Olive Garden while attending veterinary school in Fort Collins, Colorado. I quickly learned that if I could persuade customers to try the stuffed mushroom caps and top off dinner with the tiramisu, I would get a larger tip. This required me to talk with my customers and better explain the offerings. “Have you ever tried the stuffed mushroom caps? They are delicious!”
While I am the No. 1 fan of technology and automation, the biggest opportunity a veterinary practice can harness is the power of the receptionist checking out the client. This is a golden ticket that serves to reinforce what the doctor spent 15 minutes trying to educate the client about. People generally need to hear a message three times before they make a purchase. In a veterinary practice, the entire team needs to be involved with driving compliance.
When your loyalty program is fully automated, meaning no one in the practice has to do anything, you are relying on the client to figure out how to use the program to its full potential. This creates big missed opportunities for you. It would be like a football team working hard to get to the 1 yard line and then walking away and hoping the ball crosses the goal line.
My favorite loyalty program involves the receptionist saying, “Oh, Ms. Smith, I see you are only $5 away from your next loyalty stamp. Do you need anything else today for Fluffy? I see you are getting only one box of heartworm prevention. I’d suggest you get two because you are going to need it anyway and you will get bumped to the next loyalty level.” By doing this, the receptionist is guiding the client to the final step and closing the deal.
The Proof Is in the Data
Regardless of which loyalty program you implement, you must analyze client engagement and the impact on your practice’s financials. The best way to analyze the effectiveness of a loyalty program is:
- Identify clients engaged in your loyalty program.
- Determine per-client annual spending over the 12 months before the program’s start date.
- Determine per-client annual spending over the 12 months after the start date.
- Apply this formula: Revenue gain or loss equals the total amount spent in the post 12-month period minus the total amount spent in the previous 12 months.
- Repeat for all clients who don’t participate in the loyalty program. This is the control group, which will give you an even better comparison.
Last fall, my company, Vet2Pet, collaborated with VetSuccess to release the second, and largest, report analyzing the impact of loyalty programs on 201 veterinary practices. (The first report was published in 2017.) The results, available at http://bit.ly/2ZUb2LX, showed that clients rewarded in the first 12 months of a loyalty program visited the practice five more times than in the previous year and spent $729 more. The average revenue gain for each practice was $100,011.
Some veterinarians think that their best clients accept all recommendations, leaving no room for additional revenue growth and compliance. However, your top client tier has the highest level of engagement and the biggest financial impact on your business.
The bottom line is this: Your best clients have the potential to be much better, and the key to driving business is to focus even more on them. Plus, it’s just plain nice to reward clients who deliver Christmas cookies and send thank-you cards. As it turns out, they will reward you back.