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Issue: 72 - Dec 15, 2014
The Dark Side of Discounting: You Get What You Pay For
By: Jan Miller, Veterinary Best Practice
Veterinary Best Practice

I do not know how this discounting culture got started in Veterinary medicine.  Having worked for over 25 years in human medicine where discounts would never enter a conversation, I constantly wonder why veterinarians continue to devalue themselves in this manner.

Consider this:

  • If you are the type of person who only buys something when it’s on sale, would you want you as a customer of your practice?
  • I am of the belief, as are many people, that if something is offered at a discount it must not be worth the “full” price.
  • What do all of your good, long term A and B clients think when they see you advertise (sometimes perennially) “free first exam” or “half off first exam”?  What a slap in the face to those loyal customers!  It is so much less expensive to retain your good customers than it is to get new ones. So why aren’t you courting your A and B clients instead?  You will probably get more referrals from them than you do from those bargain shoppers who take advantage of your freebies.
  • People believe they get what they pay for: a half price exam, or worse, a free exam has little to no value.  Study after study shows that buyers believe discounted products or services are less effective, less valuable, or of lessor quality than full price ones.  Even if they are exactly the same. 
  • If you are discounting your services, why do you ever offer them at a higher cost?  If you can afford to discount, are you simply ripping people off when you charge your standard fee?

Discounts destroy the integrity of your entire pricing strategy.  At the same time discounts can bring in some new customers, most of whom are there just for the discount and who never come back.  Again, is that the kind of client you are trying to attract?  Have you ever evaluated your return on investment for your discounts, especially those free exams?  This is your investment:  the cost of the exam, doctor time and staff time. 

Try going back 18-24 months and find all those visits that were discounted, determine how many times those clients returned during that period and what their average transaction charge was.  It is the lifetime value of a client that’s important to your practice, not the one off’s.

If you believe your only value is your price, perhaps you should consider re-branding your practice.  Why?  Because you get what you price for.

Clients do not know if you are a good doctor.  They base their opinions about the quality of care on two things:

  1. How you treat them
  2. Your fees

How does that play out?  If you treat clients kindly and respectfully, you are probably a good doctor.  If you charge less than all of your competitors, you probably aren’t.

Ironically, if you charge the same or more than your competitors, you are probably a good doctor.  You may not even be the greatest personality around but people believe they get what they pay for.

Doesn’t seem fair does it?  What do all of us lay people know about the quality of medicine?  Very little.  So we evaluate the quality of care in very arbitrary and subjective terms.  It doesn’t mean we’re stupid.  It just means we have to have some criteria that we understand so we can evaluate you and decide if we can trust you.

Clients will go to low cost veterinarians for the “simple stuff” like vaccinations and (oddly) spays and neuters.  But they will go to the higher priced practice (you know, the one that doesn’t discount) for anything important.

I work with many veterinary practice owners who feel it is their moral duty to discount. That somehow if they don’t they will not be able to attract clients.  Discounting will certainly attract clients, but mostly the ones you don’t want.  The more you rely on a strategy that includes discounting, the more likely it is you will become the veterinarian that people go to for the “simple stuff”.

You are not your customers.  You can’t get inside their heads or predetermine what they can tolerate financially.  What you can do is be the best doctor you can be, value yourself, and price your services in a way that:

  • respects your training
  • pays your bills
  • pays your staff a fair wage
  • provides you an appropriate salary and your business a profit

Discounting undermines everything.