This article is about how discounting is dramatically reducing your income and directly affecting your career and why vets do it.
In a previous post, I was left a comment.
I saw this comment months ago. I was busy and I really didn’t know how to reply to it.
Tonight I saw the comment again while clearing out the spam and even though it’s been months, I felt I had to reply to the comment.
This is the part that started me thinking.
I would summarize this as “until every veterinarian can afford to pay their assistants a living wage, every client is being undercharged”.
When you see the length of my reply, you will understand why it became a blog post.
Here is my reply to the comment but this post is for EVERY VET:
I was just clearing out the spam and came across this comment.
I feel I need to reply to it even though the post and the comment was months ago.
I used the word undercharging and I now realise vets find that word distasteful. So I now call it discounting.
In most consult & surgical rooms across the world, vets make a choice to not charge a client for a service they performed
OR
they decide not to do a procedure that really should be done because they don’t believe
- the client can afford it
- are rushed for time
- don’t feel like it
- or believe the cost is too high.
(I have done every single of one of these)
This is not the same as over-servicing which I and most vets are dead against.
This is about procedures, testing & extra time that we should be charging for and offering to the client.
The majority of associates complain about their income and most practices complain about profitability.
By making a choice to discount, it is directly affecting their income. Most vets don’t realise the impact of $20.
They don’t realise that $20 – $30 discounted from most consults every day adds up to a LOT of money in missed turnover.
Do you want to know how much?
$100 000/year for every vet and I’m softening the blow as it’s actually higher.
(don’t believe me… Just book a day with me and I will show you exactly where this occurs)
If your salary is determined by your turnover, you just stopped yourself from receiving a $20 000 pay rise.
It gets worse…….
Over the course of a career, most vets are underpaid by around $400 000 and I’m being conservative there…
I have ‘looked after and done a great deal’ many times for clients over the years. Looking back, what I recognised is there definitely are clients who are struggling financially, need help and I am happy to work with them to achieve the best outcome within their budget.
What I also realised is I ‘did great deals’ for everyone, even if they could afford it because I was so uncomfortable discussing money, charging and costs.
You know what I really did though?
For the practice I was employed at, I directly contributed to that practice struggling financially. I won’t take full responsibility as there were other vets in the practice but I do accept some responsibility.
Looking back, I am not proud of that.
I also directly affected my ability to earn a better income. At those times, I wasn’t earning a great income to begin with. I couldn’t afford to go to conferences and I remember being very embarrassed about having to ask the boss to pay for a conference. I didn’t feel so great when I was given the cheque and told ‘don’t expect this again’.
I stopped discounting when I became accountable for my turnover and I had a responsibility to justify my employment. No, I wasn’t paid on productivity either.
This is a part of a larger issue that needs to be addressed regarding valuing our knowledge & skills and worth as a veterinarian.
Vets don’t like talking about money or about costs.
I am going to keep talking about money, about charging, about discounting and about incomes.
Why?
Because I do not want to see any associates or practice owner struggling financially because
- they are looking after everyone else except themselves
- they listen to people saying we earn great incomes & are money hungry
- they believe wanting to earn a good income is greedy, selfish, etc….
Clients love and appreciate everything we do for them (well most) especially if we look after them and keep their bill down.
At some point in every vets career, there will be a time where they can’t work either due to illness, burn out, exhaustion, divorce and family reasons. While clients will have empathy for you, they won’t be offering to pay your bills because you have no savings.
I want every vet to live a great life and enjoy a great career, whatever that may be for you.
I know financial stress is impacting the quality of life of most vets – associates and practice owners.
I can’t sleep knowing that there are vets out there who just can’t do it anymore, who are in a deep depression and contemplating the unthinkable because of the pressures of our career & financial pressure.
If I don’t make a lot of noise about this, how will they know that it doesn’t have to be like this and they can increase their income just by charging correctly.
Your thoughts and comments are welcome.
I thank Greg for his comment as by writing this post I realise how passionate I am about what I do – helping vets.
Even though I called my business High Performance Vets, I am very passionate about helping those who are struggling and overwhelmed as I once was and showing them it doesn’t have to be that way. Anyone who has worked with me will agree.
Would you like to uncover where you are discounting, what leads you to do it and how to increase your income? Follow this link to learn more about my Veterinary Income Coaching Program.
Natasha
Hi Natasha. Nice post. I think this is all very true and has applied to all of us at some point. I like the way you write – very heart felt and engaging. Sean’s comment is also worthwhile – you need to work backwards from a profit figure to realise what and how this can be achieved.
Hi Natasha. I enjoyed the article and I am sure every veterinarian has frequently endured the internal struggle of charging for their services appropriately and with discounting. When we are challenged on our fees by a client we take it personally and usually internalize it. How many of us have had our day ruined by one client out of many because they complained we were overcharging. That experience certainly does not help us avoid further discounting. Part of our problem is that we don’t have an accurate method to set our fees. We all do the “mystery shopper” technique of setting our competitive services. It makes no sense to rely on our colleague’s fees who also don’t have a method to price their professional services accurately and who may have an entirely different labor and overhead structure. What we all have done, me included, is do a retail markup of 100-300% on our pharmaceuticals to basically “subsidize” our professional fees and then hope that leaves us with some profit to enhance our income, give raises to our staff, buy new equipment and hopefully to retire some day. We frequently do “across the board” increases in fees 2-4 times per year without understanding if we raising some fees enough to cover costs and if we may be raising some fees that already have 20-40% profit. I am now using a patented, mathematically verifiable approach to profit that accurately set each hospitals fees based on their specific costs. We have done this in well over 500 hospitals now with great success. We target a profit level “up front” and reliably achieve that. I had sold my 14 DVM practice 6 years ago and was happily retired. I was so impressed with this solution to profitability that I gave up my fishing and golfing responsibilities 🙂 to help get this to veterinarians. I would think this would be a great adjunct to the variety of services you consult on to your hospitals. If you are interested, I would love to show it to you via a webinar. I apologize for obviously pushing a product on your blog but I could not avoid addressing the topic because I know I can show any veterinarian how to build the cost of employees and all their benefits (including CE), equipment and inventory into every service they provide. I can show them the exact profit or loss in each service they provide. Once they understand ‘why they charge what they charge’, discounting should decline markedly. It is a powerful and proven tool. I hope to get the chance to demonstrate it to you. smmdvm@gmail.com
Thanks Greg for your insightful comments!
In a recording I just did for the Webinar Vet Australia, I discussed how discounting impacts your income but also staff hours and pay, the ability to upgrade equipment plus more.
We can’t totally avoid those conversations about money and although you may not be comfortable about it, it does get easier. I focus on the value of what we are doing and how it benefits their pet.
If you have staff members who are much better with those conversations – utilise them.
“Some days I feel like I’m hitting a brick wall” she said in a private message, presumably meaning every veterinarian who is approached to receive coaching about money fights tooth and nail against learning how to ask people to pay for services.
Some of us (me included) let our technicians have these conversations about money with clients, because as poorly as veterinarians are paid, our staff is getting paid way less. Veterinary technicians understand the value of a dollar. They understand if the client doesn’t pay that $20, their income will be directly affected. They also understand financial hardship, because veterinarians pay our people below a living wage. So when a client says “I can’t afford that for my pet” our staff replies “I couldn’t either, but I’d sell my car to help my pets if that’s what it took, because I love them more than anything else in life”. It’s hard for a client to boo hoo their way past an underpaid veterinary technician, who probably has half a dozen broken down pets at home they’re spending half their income supporting.
An owner veterinarian should look at the practice overall, figure out how many dollars need to come in to keep the doors open, match that with however many services they think they can provide for how many people, and then get out of the way and let the staff collect the bills.
Or if all else fails, remember that a veterinarian discounting $20 is taking that $20 directly out of not just his own, but his technician’s pocket.
Veterinarians are our own worst enemy.