This was the challenge facing Kings Veterinary Hospital. Diet products in particular are difficult to manage profitably, due to the broad variety of flavors and formulations. Maintaining a large diets inventory requires floorspace, staff time, and resources that could all be better spent improving patient care. With the Kings staff handling special order diets on a one-by-one basis, in-clinic diet sales actually began to cost the practice money.
“It was taking too much time to manage special order diets,” said Stephanie Foster, practice manager at Kings. “Plus, we weren’t having diet compliance, because clients would take their prescription elsewhere when we didn’t have the product in-house.”
“You think your compliance is 75% or 80%, because you’re recommending the right prescription products to every client,” added Foster. “But until you see the data captured by the Covetrus Platform, you don’t know where you have room to grow. We really didn’t have an opportunity to move the needle until now.”
It was like stapling a five-dollar bill to every bag. We were losing at least that much on every diet sale, if not more. To solve the problem, we started using the Covetrus Prescription Management. Now, it’s a total practice solution.
The Covetrus solution
With the Covetrus Prescription Management Platform, you can carry all your clients’ diet needs—sourced directly from the manufacturers, with all the original guarantees—and every prescription request is verified to ensure accuracy by certified pharmacy technicians and pharmacists.
“This isn’t about cannibalizing in-clinic sales,” Foster said. “If we sell our hearts out in-person, a client may buy six doses a year of a flea and tick product. But if we offer the same product proactively online and the client buys 12 doses, which is better for both the pet and our practice?
With the Covetrus Platform, we’re changing client behavior.” That includes where clients choose to shop for pet food. Before using the platform, the practice had annual diet sales of $95,000. By 2018, diet sales had grown to $175,000. “No other program has enabled us to nearly double our revenue in any one area,” said Foster. “And now, our staff doesn’t have to handle special order sales. We’re just so pleased with the results.”
Plus, by separating online and in-person transactions, clients are willing to spend more during a visit for services like wellness programs, bloodwork, and dentistry.
Success by the numbers
Prior to implementing the Covetrus Platform in 2014, Kings Veterinary Hospital had total practice revenues of $2.2 million. In 2018, revenue increased nearly 55% to $3.4 million. From a long-term perspective, the Covetrus Platform has also supported practice valuation, which is a key component of Kings’ exit strategy. “We not only solved our diet management challenge with the Covetrus Platform, we’ve also grown our business while continuing to support our core value of being a relationship-driven practice,” said Foster.
The practice has found a better way to manage pharmacy, increasing sales while reducing the inventory and labor required to meet client needs. “We’ve outsourced our ‘pain points’ to the Covetrus Platform,” said Foster, and the result is more time and space to treat patients.
We’re actually making more money selling online than in the clinic, because we’re saving on labor costs.