Part One: Care plans renewal strategy: Understanding and calculating “churn”

26 July 2023 5 min read


What is “care plan churn” and why does it matter?

Congratulations! You have taken the first step toward success with a veterinary care plan (also known as a wellness plan) by enrolling new clients in a care plan program. Now, the next step is securing annual renewals from pet owners so their pets will continue to get the care they deserve – and your veterinary practice can see continued growth.

The term “churn” refers to the number of plans that do not renew over a given period and is expressed as a percentage of total renewals possible (# of non-renewed plans/# of plans eligible for renewal). For example, if there are 250 plans available for renewal in the month of August, and 225 of those 250 actually renew, then your churn would be 10%.

In recurring billing businesses (e.g., streaming service providers, mobile phone carriers, dental membership programs, veterinary practices with wellness plans, etc.), companies try to keep the churn rate as low as possible in order to help maintain a stable revenue stream and reduce acquisition costs of new customers. And, while you might not consider your wellness program as a recurring billing business — it most definitely is.

In addition to the monetary benefits of low churn, the loyalty and compliance driven by your care plan program can lead to healthier pets, happier pet parents, and fulfilled practices. Moreover, higher retention rates give veterinary professionals more opportunities to build stronger relationships with clients and become their trusted resource when it comes to all things pet health related. 

Churn by the numbers
Churn can sneak up on a business. Let’s look at an example to explain the effect that churn rate has on recurring revenue based on our internal research that estimates an average of $150,000 in annual revenue for a practice with 100 pets on plans.1

Example 1:
Wiggles Animal Hospital sells 100 care plans in year one. In year two, they add 100 plans, but with 50% churn, at the end of year two, the result is 150 plans, or $250,000 in plan-associated revenue, an estimated loss of $50,000 due to non-renewal. Not bad, but not what it could be.  In year three, Wiggles Animal Hospital adds another 100 new plans, but still has 50% churn. At the end of year three, this results in only 175 activated plans or $262,500 in revenue, an estimated loss of $187,500 due to non-renewal.

Now let’s say Wiggles Animal Hospital experienced a lower churn rate of 20%. At the end of year three, the practice would have 244 active plans worth approximately $366,000 in revenue. With an increase of over $100,000 in plan-associated revenue, this represents a significant improvement, and shows why it is so important to focus on keeping the churn rate as low as possible.

Ultimately, churn will determine how big a complete care plan program can become and how lucrative it can be for the practice. If your members churn too fast, you end up taking four steps forward and three steps back. So, from day one, understanding the factors that affect renewal rates, and then planning and implementing a low-churn renewal strategy will determine the long-term growth and sustainability of your care plan program.

As a partner, Covetrus® provides a complete pet wellness solution that combines software and professional services to make managing a complete care plan program easy, including reducing churn.

Covetrus Care Plans is a flexible program designed to help your practice provide affordable, personalized pet healthcare, resulting in improved treatment compliance, efficiency, and profitably.

Visit to learn more.

This article is the first in a 2-part series. Read part 2: “Care plans renewal strategy: How to reduce churn.


1 “Why Wellness” VCP White Paper.; Accessed July 20, 2023.