Bring up the word ‘discounting’ to veterinarians and practice managers and you will get a variety of reactions, some of them very strong indeed. Recently Veterinary Economics and our very own Jessica Lee, CVPM (our wellness plan guru) conducted a survey to try to get a better sense of the types of discounts practices offer and how they feel about them. Click here to read Dissecting the Discount in the October edition of Veterinary Economics.
So how do these findings relate to wellness plans? Working with our clients as they design and set up their plans we have emphasized the importance of creating plans that work for your practice. Some are dead set against offering any type of discount or incentive and feel that the ability to make monthly payments is enough of an incentive for their clients to purchase a plan. Others have chosen to discount their plans heavily and count on a large volume of plan sales and the purchase of ancillary services to provide improved care and generate increased revenue. So what is the right approach?
As Jessica says in her article, “Base your decisions on data, not emotions or guesswork.” The data shows that pet owners that purchase a wellness plan spend an average of an additional 150% of the cost of their plan per year on ancillary services when additional exams are offered at no cost. Research has also found that while offering no financial incentive leads to minimal plan sales, over-discounting (more than 20% on plan services) does not increase sales. In other words, moderation is the best approach – rewarding desired behavior (providing improved care for pets) without unnecessarily discounting too steeply.
Ultimately how you choose to package and price your plans “…should always reflect attention paid to clients, capabilities, industry evolution and competition. When done right, a sound incentive strategy can benefit all parties – the pet owner, the pet and the practice.”