Is Your Veterinary Practice Netflix or Blockbuster?
The Blockbuster/Netflix scenario is relevant to the veterinary industry in so many ways. Technology is allowing new companies and competition to enter the market and introduce new ways pet owners care for their pets. Some examples of new offerings that have already hit the market are telemedicine apps, mobile vets, online ask a vet platforms, resource sharing solutions, and online pharmacies.
With all this competition there is no better time than now to take another look at your approach to growing your veterinary or pet care business and your vision for it's future. Whether it is to focus on a lucrative exit strategy or a marketing plan to compete and thrive against new models or corporate accounts entering your market. Unfortunately, taking the Blockbuster approach and continuing to provide veterinary care alone is no longer job security. Let's take a closer look at three of the problems Netflix solved for and how your veterinary practice or pet care business can achieve double-digit growth by doing the same.
Business Model: Transaction vs. Subscription Business
The fundamental difference between a transaction vs a subscription model is that a subscription based company thrives on recurring revenue, (aims at building a base of clients who would pay constantly), while the other is dependent on one-off payments (aims at acquiring new clients). When your veterinary hospital adopts a subscription or membership model, like the MBF Loyalty annual Pet Rewards membership program, you have the ability to predict revenue. This recurring revenue is, in fact, one of the most compelling factors in your veterinary practices valuation. A business with a recurring revenue model can see a valuation of four to eight times that of a comparable business with little recurring revenue.
It was not intuitive for Netflix to ask consumers to commit to paying a monthly fee when the industry leader didn't require any type of commitment. What Netflix figured out was, if they overcame the "perceived cost" issue related to the high cost of late fees, the consumer would be happy. By offering a subscription/membership program, your clients believe they are getting greater value and the "perceived high cost of veterinary care" has been diminished. The end result is clients are taking better care of their pets and their lifetime value with your practice has increased.
With every new subscription, Netflix captured more market share from their competitors but also built an emotional bond with subscribing members. This type of a relationship is difficult for transactional businesses to achieve and more important count on. A membership model closes the door on the competition and enables your veterinary practice or pet care business to grow more profitably with a strong recurring base of clients.
If you would like to learn more about how your veterinary practice or pet care business can benefit from MBF Loyalty's Membership program please click here to schedule a meeting with one of our Business Consultants.
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