Using KPIs to create revenue-generating opportunities for your practice
Strategic thinking and smart manoeuvres are essential. To ensure success, we need to set S.M.A.R.T. goals. Additionally, we should consider the industry standard.
Consider how you affect the financial outcome. Set a benchmark to stay on track. Otherwise, you’re like someone driving without a destination – going nowhere.
Review our KPI blog here.
Use your Practice Management System (PMS) to extract any benchmarks you need
These will be your starting point. Mainly you’ll want to review things like:
- Current total revenue
- Number of total clients
- Number of new clients over a given period
- Average transaction value (amount of money spent per visit)
- Cost of Goods Sold (CoGS)/Expenses
Practice Management System (PMS) reporting functionality often includes client activity data, such as:
- Client footfall
- Active clients over a period of time
- Total number of clients (both active and inactive)
- Recently registered inactive clients
- Client growth
- Clients with vaccinated animals
A practice insights dashboard can include various data points. These include key revenue data, care plan performance, staff performance, products and services, and debit. It can also include general KPI’s such as the vet-to-patient ratio. The clinical performance dashboard includes key compliance and consultation data.
Create a budget and forecast
This will help you to estimate your profits and earnings. These include:
Interest, taxes, depreciation and amortisation (EBITDA).
Analysis of reports and financial statements is an established practice. It is used to create a solid performance plan. Data-driven insights are used to create revenue-generating opportunities for your practice.
If you are a new practice or just starting out, you’ll need to consider industry standard benchmarks. Additionally, you should seek advice from your accountant or business advisor. Your main focus should be on acquiring new businesses or attracting new clients.
Have goals in place
Identifying the right tactics is the next step. These tactics will help increase your revenue for your veterinary clinic.
From there smart budgeting/forecasting will enable you to estimate your profits and earnings before interest, taxes, depreciation and amortisation (EBITDA).
An established practice analyses these reports and financial statements to create a solid performance plan, using data-driven insights in order to create revenue-generating opportunities for your practice.
Now that you have your goals in place, that’s where you can identify the right tactics that will help increase your revenue for your veterinary clinic. Here are four easy ways you can increase the potential for more revenue:
1. Plug the gaps and reduce the number of missed charges
Missed charges represent a huge opportunity for hospitals and clinics. Studies show that up to 20% of diagnostic charges can go uninvoiced. These charges include fecal exams, injection fees, recheck exams, ultrasounds, and blood draws.
In our blog, we outlined this opportunity for missed charges. If you have a mobile practice or treat animals outside, it can be easy to forget to charge. This is especially true if you cannot charge on-site.
This means you might be losing up to $100,000 per vet per annum! That’s a lot of revenue.
Use your PMS and the key performance indicators (KPIs). With this, you can start to address “bad debtors” and recover payments from clients. For any customers struggling with financial difficulty, it might mean you offer them easier or more flexible payment terms. Other things that can help resolve missed charges include:
- Instant, timely and automatic charging synced to appointment reminders and bi-directional communication.
- Built-in templates e.g. Estimates functionality which streamlines your workflow processes and ensures consistent charging throughout the practice.
- Ensure patient and client records are up to date. This will ensure charges go to the right person. It will also ensure payments are received in a timely manner, avoiding delays.
- Use integrated payments to make the billing and charging process easier at PoS or in the check-out process.
2. Increase the number of new customers and generate repeat business from existing customers
Attracting and encouraging customers is important for vet clinics. This includes both new and existing customers. Providing a reason for them to come is key. In Alan Robinson’s words (Business Founder at Vet Dynamics),
“The attraction and retention of quality clients is directly related to the quality of the client care the practice can provide. In this respect the importance of the practice nursing and reception teams in bonding a client for life cannot be underestimated.”
Key branding, marketing and active communication are effective ways to promote key reasons and attractive services. This will help drive traffic to your clinic.
A clear value proposition, compelling offers, and effective messaging are essential for success. This should be reflected both in your digital and physical environment. Together, these elements can bring you a long way.
Every aspect of your business reflects customer-friendliness. This includes the friendliness of your front-desk staff and the ease of booking an appointment on your website.
First and last impressions always matter
Make a client’s visit worthwhile.
It’s not just a business transaction for them. They want to feel that their pet is in good and safe hands and have a pleasant experience. This applies both physically and figuratively.
Check out our two key episodes with expert marketing consultants in the industry:
3. Consider introducing and selling pet-health plans and a subscription service
We surveyed 200 veterinary professionals across Australia, New Zealand, the UK and Europe for our 2023 Trends and Insights eBook. It became clear that pet-health plans make sense to offer and facilitate affordability for clients.
Customers appreciate the reasonable monthly fee. It guarantees their pet’s health maintenance, including annual vaccinations and check-ups. This thoughtfulness is much appreciated.
This creates a steady flow of income for the veterinary practice. This makes it easier to increase profits.
When you look at the pros of having a pet-health plan, many respondents of that survey outlined:
You can view the full survey, results and more ideas on pet-health plans in our 2023 Trends and Insights eBook.
Pet-health plans can form a major part of your new revenue-building scheme. Take annual vaccination reminders for example – which is just one component of a pet-health/preventative care plan – it alone can make a significant difference to a practice’s income levels, but can also address point number one and two in this article. In the KPI’s reporting example above, you might pull a report on all the unvaccinated animals and send a tailored email campaign to all those clients with a special promotional offer!
4. Minimise expenses and review your stock management processes
Stock management and inventory is still the second largest cost after staff salaries and it’s also an area where veterinary practices have the opportunity to be much more sustainable, go green and do good for the planet as well as save costs. By doing so, you can increase your profit margin and bottom line.
Instead of having a surplus, which appears to be the easier route, utilise your PMS to ensure you have just the right amount of stock. Being well stocked is important, but it shouldn’t be to the detriment of your profit margin. It also prevents unnecessary wastage, plus with key reporting, you can keep on top of or reduce half-used stock.
For more information relating to our survey and trends, download our eBook below.