New market dynamics are helping reshape veterinary practices as the pet health industry reemerges in a post-coronavirus (COVID-19) pandemic environment. Although many practices are busier than ever, now is not the time to remain in survival mode.
Instead, savvy practices recognize that now is the time to capitalize on the surge in pet patients by offering care plans (also known as wellness plans). Here are the top three reasons why:
- Post-pandemic trends
In 2022, there were five million more pets in the U.S. since the COVID-19 pandemic began and 69% of pet owners had a vet visit at least once in the past 6 months, according to data from Morgan Stanley.¹
Visits plunged early in the pandemic, but from 2021-2022, veterinary clinics saw an increase in demand for their services.²
Revenue growth was largely driven by increased per-pet spending, coming from an influx of new clients who adopted pets during the pandemic. The willingness of existing clients to spend more on their pets also helped propel financial growth.
The positive revenue trend is likely to remain with us. Research tells us that younger pet parents – now the largest share of pet owners in the United States – dote on their pets more than older generations. Given this, average annual household spending per pet could expand from $980 in 2020 to $1,292 by 2025 and rise to $1,909 by 2030, Morgan Stanley¹ forecasts.
- Loyalty is more critical than ever
A recent report noted growing competition among animal hospitals. According to an IndeVets survey, there is an “increased demand for appointments—including overflow demand from other hospitals, which suggests structural shifts in the market.”³
Former American Veterinary Medical Association (AVMA) Chief Economist and current President of Veterinary Study Groups (a subsidiary of Covetrus®) Matthew Salois, PhD,* pointed out that fostering client loyalty will become even more critical to the success of veterinary practices in the post-pandemic world. And, given the wave of pandemic pet adoptions, care plans also educate new pet owners about the healthcare needs of their furry friends.
Strategic thinking about client retention and brand building is now more essential than ever. Savvy practices are already taking steps to capture the loyalty of new clients and nurture their bonds with existing ones. Many of them are doing so by launching care plan programs as part of a complete pet wellness solution.
- The subscription economy offers many benefits
Implementing a care plan program is effective on multiple fronts. For starters, consumers favor membership-style programs. For evidence of this, consider that Amazon Prime added a whopping 50 million subscribers during the pandemic.4
In the veterinary industry, the benefits of membership-style programs discourage pet owners from shopping around for pet healthcare. Well-run programs also incorporate additional offerings to help reduce the erosion of revenue to third-party online retailers.
A complete care plan program can build a practice’s relationship with clients and help to set it apart from competitors large and small. The care plan program should be sufficiently robust to integrate other product and service areas – to encourage clients to take advantage of all of a practice’s offerings. Internal data from Veterinary Care Plans has found that consistent usage of the practice’s products and services builds relationships and loyalty.5
Similarly, a full-fledged care plan program should extend throughout the practice, allowing veterinarians to personalize plans to include grooming, boarding, specialty medicine, chronic illness plans, and much more. The data also found that customizing add-on services to each pet can boost the value of the veterinary care plan program by 20%.5
Care plans are a potent tool to set up practices to succeed in a post-pandemic economy. With care plans, veterinaries can differentiate their practice to gain clients for life – and accomplish the overarching mission of providing quality care to more pet patients.
To learn more about industry trends, innovation, and loyalty, listen and subscribe to Covetrus Connected Care, a new veterinary podcast from the team at Covetrus.
* Dr. Salois is a paid Consultant for Covetrus.
1 Puppy Love Boosts Pet Care Industry. Morgan Stanley. https://www.morganstanley.com/ideas/pet-care-industry-outlook-2030. Accessed June 23, 2023
2 For Most Practices, Demand Returns to Pre-pandemic Levels. American Veterinary Medical Association. https://www.avma.org/news/most-practices-demand-returns-pre-pandemic-levels. Accessed June 23, 2023.
3 Results of the 2021 Covid-19 Veterinary Impact Survey and What They Mean for Animal Hospitals. IndeVets. https://indevets.com/blog/results-of-the-2021-covid-19-veterinary-impact-survey-animal-hospitals/. Accessed June 23, 2023.
4 Amazon Added Another 50 Million Prime Subscribers During the Pandemic. The Verge. https://www.theverge.com/2021/4/15/22385370/amazon-prime-subscription-jeff-bezos-2020-shareholders-letter. Accessed June 23, 2023.
5 “Why Wellness?” VCP Whitepaper. https://software.covetrus.com/wp-content/uploads/2023/07/Why-Wellness-2022-03.pdf. Accessed June 19, 2023.