Hi, well, thanks everyone for joining us today. My name is Stephen, and, thanks for joining us for this webinar on the money conversation. We've got 3 illustrious speakers with us today to help us, learn more about the money conversation.
To start with, we've got Alan, who is going to give us a bit of a finance 101 on what our professional time is worth. Alan, as you're aware, has been a qualified vet for over 20, wow, 20 years, Alan. Qualified vet for 20 years.
Alan started and grew a successful mixed animal practise in rural Wiltshire for 15 years before diversifying into business management. His mission is to reignite purpose, passion, people, and performance, and he helps independent vet practise owners improve their performance and achieve the quality of life that they deserve. He's now the proud owner and director of the UK based veterinary business consultancy and education company Vet Dynamics, which is a, a trusted, provided trusted business advice to more than 1200 practises worldwide.
After Alan, we're gonna be followed by Gemma, who is going to give us a session on getting the team on boarding, how to build confidence around pricing. Gemma's qualified from the RBC in 2014 and has undertaken many roles in the small animal veterinary world, including clinical coaching, new graduate mentor, and clinical, being a clinical director. In 2021, Gemma joined Vet Dynamics after realising that her purpose was in developing teams and practises, encouraging and supporting them to thrive.
With a wide variety of interests, she wants to instil the mindset that if you do right by your people, you will do right by your practise, which I think we can all agree is pretty accurate. Most importantly, do right by the patients. Gemma is also a director for the veterinary Management Group.
And then thirdly, we've got Rebecca Robinson who is giving us a talk on, hey, but I already explained it, why your team resists change and what you can do about it. Rebecca is a Cambridge graduate and a former mixed practise vet. She spent over 2 years, 2 decades in clinical practise before moving into leadership and consultancy, and her passion is transforming veterinary workplaces, which was sparked by firsthand experience of both effective and ineffective leadership, which led her to studying practise management and coaching.
As a practise director, she's reshaped culture and performance and co-created a popular CPD course with vet dynamics focusing on mindset and communication and leadership. She's now a business consultant and in 2023 joined the VMG board and currently serves as president. So before we get started, a big shout out and thank you to Vet Dynamics who have helped organise and sponsor this, and then I would like to pass over to Alan in a second.
If you have any comments, about the webinar, there's two areas. One of them is that you'll be familiar with the webinar chat. This is more of a bit of a technical spot if you're having problems with sound or your screen disappears or anything like that.
That's for their specific questions about the content, things you'd like to ask Alan, Gemma or, or, Rebecca. If you could put that in the Q&A section, which if you're not sure where that is, go to the bottom of your screen, there's the three dots and the more, and if you click up there, there's a little Q&A button, and if you can pop all your content questions there, and we'll go through them at the end. So I'd like to pass over to you, Alan.
Thanks Steve, thanks for the introduction and great to be here. This is going to be a little bit of a rock and roll session through a very important conversation, the money conversation. So unless you've been living under a rock or been on call for the last 2 years, you'll know there's lots of conversation in the industry around the CMA, transparency, pricing, and really that, the question of money, and of course it's always been the perennial stressor in the veterinary profession.
So we're going to run through this, I'm going to give some basics on finance, just how it works and how it, how it's meant to work. I've distilled this down to five laws of veterinary finance, or if you want another title, it's how pricing Affects your profit, basically as we go on. So, run through this.
When we're talking about pricing strategy in particular, we see there's probably 3 distinct pricing strategies you need to have in your business, thinking. One is preventative healthcare, that's based on convenience for the client, convenience of things needed by the healthy animal, it's a compliance-driven, process, you need to make sure that your pets are getting their vaccines, they're learning their flea control, they're neutering, etc. And as a result, the commodity items, they're competitive, they're, they're shoppable, and from the CMA perspective, the, these are the ones that need to be on your list at some level that are going to be compared and compared even more to some of the websites.
Medicines, retail, food, even lab outsourcing is sort of the other piece where we buy in services, drugs, products, mark it up and then resell it, often with an added fee like a prescription fee or a a dispensing fee that goes onto that, and again that's something that's come under the CMA remit. So. They're fairly straightforward to price.
The one that I want to focus on and we're going to have more trouble with is what we call professional fees. What are we charging for our veterinary and nursing time to the client for what we do, and that's understanding what professional time is and how we spend it, how do we invoice that and how do we actually present that. And of course it also depends on your vets, and nurses proactivity of delivering the services that are required.
In that grey area of ethical and professional, area with transparency and trust built into it, which, Gemma and Rebecca will talk around more, but I'm gonna focus on this professional time pricing cos that's the difficult one we find, harder to actually get a sense of as we go. So first to my laws of veterinary finance, the law of costs is basically quality veterinary care is a high fixed cost business, OK? Fixed costs are those costs that occur every day whether you have a client turn up or not, the rent, the rates, the gas, the electric, the marketing, the finance, the CPD, all the things you need to do to run your business.
And as a result, I don't personally believe there's any such thing as a low cost veterinary treatment or veterinary practise because you've got to cover your fixed costs every day just to stay in business and they're quite high, hence the procedures and work we do need to be priced accordingly. So if you remember nothing else, what it costs to run a veterinary practise, it costs what it costs because that's the cost, and that is something we can't do much about, and it is also, the recent cost of business has accelerated over the past 2 to 3 years dramatically, and as a result of that, we've got a process where our pricing is based on what it costs us to deliver. Pricing has to change as well.
So what do I mean by that? So here's Barney, he needs an operation, he needed some treatment, let's say for the sake of the mathematics, not as a quote, it's 120 pounds, because that's what we know, that 120 pounds as crossing your reception desk has to be broken down into what you get, the 100 pounds, and of course the VAT, the, the, the government tax that goes with it. So of that 100 pounds, how is that split out?
Now this is a really good exercise for your teams to go through in your own business because every practise has their own metrics. Fixed cost, building, finance, rent rate, gas, electric, that's probably about 20% of the cost in all in a typical practise. You've got to pay your team, you've got to pay the staff, you've got to pay the vets, nurses, receptionists, and then the added cost of pensions and other sort of things.
And in this, consider a wage for yourself if you're the business owner as well, is around about 40% would be ideal. The cost of drugs, retail, pharma, lab, consumables, it's going to be around about another 20% after you add back into your discounts and things, . And then what should be left over is profit, something leftover that we can use, but even that profit has quite a way to go because we've got to pay tax on that, we've got to repay loans, we've got to invest, we've got to actually pay bonuses, return on investment, etc.
Now that's an ideal stack, and that's a reasonable and transparent way of running a business, earning about a 20% profit, keeps it viable and keeps it working. But of course the thing to remember is the only variable in that, if you any of those costs go up, or in fact, that you reduce your revenue, the only place it's going to come off is the profit, that's the only expendable piece within that. You're not going to pay your drug company less, you're not going to pay your people less, etc.
So that's going to be the difficult. Let's run through a little case study here, so here's a small, 34 vet practise running OK, ticking along. It's costs for consumables of drugs is at 24%, slightly high.
Remember it can't get the discounts, bigger practises can, it's probably overstocking to a degree. Its staff costs are 44%, it's gonna be running locums, it's got to have enough people for its out of hours, it's gotta be actually probably catering maternity, so costs are gonna be a little high. The other items, 27, 28%, quite high because there's a high finance cost, high marketing costs, high CBD cost.
This practise is investing in their people and their training and their equipment, as it would be. But of course what that means is, the profit, the money left over, it's sitting there at 5%. It could be higher if it wasn't investing in this, but this is a choice that the practise has made because to do that, it costs what it costs, that's what it needs to do.
So the trick here is, here's this practises stack, some slightly different from our ideal, but this is what it is. But, and of course that 5 pounds has still got this distance to go with taxation and payments and paying back loans and other such things that go with that. The question we have is, is there actually more profit in the system that we're not collecting?
So is there hidden, lost, discounted or profit in the system, that we could gain back from lowering some of the other costs and efficiencies probably, but equally, are we losing revenue from somewhere, and often that is the case. Now, as I said earlier, we can talk about preventative healthcare and that's going to come under scrutiny, it's gonna come under view. Equal drug costs are the main drive of our CMA with prescriptions and other such things.
But that leaves us as a vet in practise with one of the few things that we actually have at our disposal is our professional time. Typical practise, your fees, your professional income is about 65%, drugs is about 35%. In this practise, income is $263,000 cost of drugs 182, lovely little profitable drugs business, a drugs retail business of $800,000 OK, can do well with that.
The problem is that the income from fees is 489, the cost of delivering those fees is 535. Can you see a problem with this business model in that it's actually losing money on the professional fee side. Now in the past that's been a very common feature of small struggling practises, they're just not charging enough for their fees for their professional time, although they are making profit on drugs, and this is exactly what the CMA saw in our bigger and even larger business model.
Most of the profit coming from drugs and retail, Very little profit actually coming from professional fees, they couldn't measure that, therefore it wasn't taken up. So here's where our 5% comes from, it's basically a summation of those profit and loss of those two things. So what does professional fee income look like, OK, it comes from, Having enough veterinary time, veteran nurse time and selling it at the appropriate rate per hour, bit like a locum, works X number of hours, you pay them Y per hour, therefore, the, the, the, the pay is the number of hours by the number of pay, and equally in your business, your vets have to generate income per hour as they go.
The way they do that is by selling procedure. Procedures and consultations and processes at a fixed price. Now if that price is too low, you're not earning the money.
So time, how much time do we have from a full-time equivalent vet? We do a rough heuristic calculation of actually you've got about 30 billable hours per week per vet for a full-time equivalent. So in this practise, running say 4 full-time equivalents, it's got, 30 hours per week, if you're running 15 minute consults, you've got 6000 hours and you've got 24,000 billable units per year as a transactional sort of summation of that, so remember that's how we're basing it.
Now if we take those 24,000, billable units for this practise from these four vets and divide it into, The cost to run the business and the profit generated, it gives you an average rate per hour that this practise is currently generating, and in this case, it's generating 95 pounds an hour from its business, . And that 95 pounds now translates into a 5% profit. So there is a correlation, not a causation but a correlation between these things in that That low rate per hour generates a lowish profit, so we have a sort of a rule that this rate per hour kind of determines your income and your profit is the reality of that.
Now here's the interesting part, we can do that calculation and say OK that's our thing, but one of a heuristic shortcut here is if you calculate your average consultation fee, you will actually determine your productive rate per hour, if there's an equivalence here and which in turn, determines your income and profit, so we have a mechanism here of actually determining how, Productive, how profitable we can be in practise from just measuring one item. Now, why do I say average consultation power, because what we do as vets, we discount stuff, massively. Now here's a little study from Canadian Federation, Small business, several years old, but what it found is vets are horrendous discounters, OK, we seem to actually have capability of discounting our services, not necessarily drugs because they're a markup, but our services massively.
What we've, one way of doing that is having these range of consultations available to, to vets to sell and clients to have, ranging from full price consultations all the way down to free of charge consultations, and so what we end up with is a prescribed consultation fee, top rate, but an average is then the average of all these different consultations. So in this practise, 21% discounting. Here's a practise that has 46 different available consultations.
Can you imagine the smorgasbord that the vets have to play with in charging out your services, OK, and the massive number of different ones here. So again, we end up with this massive discounting actually built into the system. Now I appreciate a lot of practise now are not doing this, but it is still very endemic in the, in the practise, we're having these choices, and either it's an official, you can do this or unofficial people not doing it.
So what we do is take those various consultations, don't worry about the spreadsheet, it basically comes down to that we start in this practise, and this is a slightly older example, but 30 pounds of XVAT for a 15 minute consultation, that gives you 121 pounds an hour. That's OK, but what we find out is when you average all the other lower price consultations, particularly free of charges, That brings that down from 121 down to 97, that's a 20% discount process built into your business model, you can't beat that, OK, you, that will actually scap you all the time. So, Here's the interesting thing, that average consultation fee, 97 pounds is very close to the productive rate per hour, OK, so here we and when we've done this with hundreds and hundreds of veterinary practises, this correlation comes up nearly every time.
Into the process, and so we have this proxy whereby this average consultation fee, which is something we calculate for our clients in our, veterinary index, our, our dashboard that we have for clients, and it actually says here's your rate per hour, and that's exactly how you're going to generate a profit. If you want to increase revenue and profit, you've got to increase your average consultation rate per hour, and that then spreads across your whole pricing structure. OK, how do we do that?
So here's, here's the equation that's at work in most practises. We have a top consultation fee driving a rate per hour, quite reasonable, 121. Currently that's gone up slightly, a lot more than that because of the cost of business, OK.
But that's with discounting what vets do so well, we discount that rate to 97 pounds per hour, that's the ceiling we can generate, OK? That is Average consultation fee £97 per hour and that therefore tells us approximately very close to our average rate per hour, that's what we're working on. And that generates the profitability, OK, so you can see that.
Now the question is, what do we do about that? There's one short answer, stop the discounting, stop having all those lower price consultations, stop ways of actually discounting that and maintain your reasonable but feasible consultation fee that you need to do, so stop that discounting as best you can. So here's what happens, here's the stack.
The lower your primary consultation, the lower your average rate per hour. The lower your repeat consultations, if you're discounting those follow-up, repeat, follow-on consultations, that again escalates down to your lower average rate power. If you're very diligent and do lots and lots of repeat consultations or charge lots of repeat consultations, that again lowers your rate.
If you put in a few free of charge consultations, you've just scuppered your whole rate per hour process because you can never get that money back when you haven't charged for it. So vets learn to discount before they learn to count somehow in the whole process, and this is really what the, the problem is. So, how do we fix this?
How do we then set some clinical prices? Well, setting it's one thing, but then discussing with the team is the other, which we'll follow on with here. So your required or your profitable income rate per hour should determine your minimum consultation fee.
So all we're doing is reverse engineering our consultation fee. We choose what our rate per hour could or should be based on our projections, and then we calculate our minimum fee from that. OK, so here's our example practise, 750,000, running at 97 pounds an hour, generating 5% profit.
What do we do? OK, well what we've decided is that 100 for this practise, 120 pounds per hour is actually what we need to do. So if we recalculate the projection, Forward, based on that, that means we would generate an extra 112, 113,000 pounds, because we stopped discounting these lower rate consultations, we're charging a fuller rate and then our other, pricing lifts in the same process.
Now making this sound very simplistic, there is a whole built-in process behind this, and I think we'll go through that a little later. So here's my recommendation for the moment is, Minimum consultation fee, minimum for any 15 minutes of veterinary time, you can do the same for nurse time if you're using your nurses efficiently as well, but what we're calculating is what's the minimum we can charge for a 15 minute unit, and if it's a 20 minute or 10 minute, that's fine, we can calculate that, or veterinary time minimum, and then we charge more and more for that when we get into diagnostics and consultations. We would suggest get rid of all your consultations bar 2.
And at 120 pounds per hour, and like I'm saying at the moment it's probably near 140 pounds with the current increase in costs of business. So you'd have a primary consult that is 30 pounds for 15 minutes, which generates 120 pounds per hour. Subsequent consults, it can't be any lower than 30, it can be higher, OK, so what we've done is put a baseline on our charging, but on our discountability, OK, so their primary could be 35, if you wanted a differential, but my question is, why would you make a differential between those two consultations?
So anything below that costs you money. Here's the process, the, the actual practise that we showed you, this is what they did, they had a very low consultation rates, we got them to increase from 20, we said go to 30, they said can't do that, we wanted their second consultation from 16 to go to 30, said can't do that, so we actually did this initially, step one. We also got rid of cons 3s, cons 4s, we started charging the free of charges appropriately and moved those up to the second consultation fee.
What that did in a 12 month period was generate 173,000 pounds extra income which was mostly profit, and that was the leakage from the system, that actually made this book. Now that was a complete rush through, . But it does show you that just tweaking a basic fundamental metric of your financial model and understanding what that discounting does makes a huge difference.
So, that was very quick, Steven, rushed through, but I'm gonna hand over to Gemma and Rebecca now to give you some sense of how to have those conversations with yourself as a leader and with the team as well. Ace. Thank you, Alan, for that very fast, very fast run through and a lot of numbers as well.
You'll be pleased to hear that's the easy bit. All right? So the actual numbers, numbers are, as Alan said, what they are.
It costs what it costs. And if you're a bit of a spreadsheet orientated soul, Get your head around that, or at least, as Alan said, get rid of any of those free of charges or low priced consults. Now we're gonna move on to the tougher bit, the people bit.
This is the, the reality is you guys as business owners, as business leaders, may well understand, you know, the importance of pricing, the importance of billing, the impact of discounting, because you're the one that may see the bank balance at the end of the day. You're the one potentially paying everybody, paying the bills. The reality is though, we work with people, we work with a team, and they don't necessarily see all of that, so they don't understand it potentially, and that is not going to help their confidence around it, and we're going to talk through how to kind of get ourselves on a better side of that.
Our teams are the ones at the coalface talking to clients, dealing with clients, fielding enquiries, serving them. So this sort of next little bit there is going, right, how do we then translate our knowledge, that thing around from spreadsheets into people. Now, Does this sound like your team, that's too expensive, clients won't pay that.
Can't we just take off that bit? Surely we can't charge for that. And maybe you're seeing missed items on the invoices going out, the unofficial discounts alongside the official discounts of different consult rates, maybe some freebies going through there.
I'm hoping not, but there will be some leakage, as Alan has said, and maybe you end up feeling a little bit like this, and maybe you grab a large, large glass of wine, of course, at the end of the day, because you could have done all that work to get your pricing to where it should be. You've got your rate per hour. You've got rid of some of the consults, you're like, yes, we've got this.
This is great. However, the people aspect can some, you know, systems are great, but your people need to believe in them ultimately as well. So, kind of jumped on the, CMA word of transparency.
We may all well be sick of that acronym by this point, but it has highlighted things very neatly. For us. So transparency creates understanding.
The CMA talks about transparency as in transparency of ownership, transparency of pricing to the clients. Let's use that for our team as well. Get them to see, actually, what does it cost?
Where does the money go? If we get that understanding, that can start creating belief in the system, why our prices are what they are. Most of us aren't setting ridiculously high prices around things, but actually going, yeah, we've put the legwork in to understand, to, to create these prices, now I can see what the, you know, the leadership team have done.
When we believe in those prices, we are able to commu communicate more confidently. A lot of us, most of us, we're all evidence based, we like to be able to go, yep, I can get behind this. And even you guys, and I, we often see this actually, that practise directors can be the worse for undercharging.
Irony isn't lost. So even you guys getting an understanding of like, yep, this is what it costs to run my practise, therefore, this is what my prices should be, means you're able to go, yes, that is why my consult is 40 pounds, 50 pounds, 60 pounds, 70 pounds, because every business model will be slightly different. You know, we are quite fairly comfortable with a referral centre, say, charging more on a per hour rate than a first opinion GP.
They have higher costs associated with that. So, It's being able to understand what's gone behind it, create that belief, and then be able to communicate. Confidently, really and clearly.
Now, let's start with the elephant in the room, profit is often seen as a dirty word. I think this is meant to be ice cream, but we're gonna call it the dirty word. Your teams, again, ask that question, see how they feel about money and the word profit.
The reality is profit isn't a dirty word. Profit equals better patient care by investing in our equipment and our facilities, what we're able to do there, and also investing in our team, better team wellbeing. There's a reason we're able to have, you know, not be consulting from 8 in the morning through to 7 o'clock at night.
Things shift. We actually want to create nice environments for our team because. Ultimately, if our team are feeling supported and they are not completely wrung out, they're able to deliver better patient care.
By investing in equipment and our facilities, we can deliver better patient care. Kind of flipping it on its head, this is not about being money driven. Treat the patients in front of you, do right by your team, profit will be a byproduct as long as your pricing is correct for your business model.
So. This is potentially not something I would share with the team per se, but if you haven't got profit, you're not gonna get any new equipment, you're not gonna get any renovations. There's gonna be no money for pay rises or potentially pay, which means if we can't pay anybody, there's no one to care for the patients, and ultimately, there could be no practise.
Now, that is a very dark way of looking at things, but it's just that flipping around it, what does profit mean? Where does it go? What do we use that money for?
And. The exponential rates that medicine and the things we can do now in practise compared to 1015, 20 years ago, is massive. Now, we're seeing practise putting in CT scanners, you've got much nicer equipment.
It does come with a price tag, but we're doing that so we're able to give better patient care to the animals that we care about. So, getting your team to understand profit isn't a dirty word. Let's start with that.
Alan's shown this sort of little diagram to you before, and I think it's a really powerful one, of getting your team to understand where the money goes. You know, showing them a full on P&L breakdown, or, you know, a screenshot from zero, probably isn't going to resonate with them. That, that, that there's a lot of information within that.
So, using this, what we call the 120 slide is a really nice way of, kind of getting a bit of an understanding. So. As Alan said, interesting thing, 120 for what comes across the counter is actually 100 quid plus that lovely government tax.
The reason we use 120 is this now makes some very nice maths for thinking about it as percentages or pounds, whatever you want to think about it as. Makes it very easy. When I've often found in practises that actually, when you sort of say 120, and you automatically take away 20 quid of VAT, they go, Oh, wow, because again, it's that as a consumer, we don't see that side of things.
Then we have the stack. Depending on your business, this will vary from practise to practise, OK? So, 20 pounds on fixed costs, 45 pounds, 45% on team.
I must admit, I'm seeing that eking upwards. Again, you guys wanna pay your team well, but that needs to be generating work, ultimately as well, is that we're paying our teams well for the work that they're doing, otherwise, that just eats into profit. Drug costs around 25%.
Got some practises that can get that tighter after your team team costs. This is your biggest area of expenditure, all right? And then 10 quid profit.
And out of that as well, we've got more tax, yay, government, any potentially there any investment repayments to do, any capital repayments, like we said, equipment, bonuses, remuneration for directors, return on investment. There's a lot that still needs to come out of that one, that profit chunk, and particularly, you know, if it's less than 10 quid, it's even tighter. So.
Use this with your team, is what I'm saying. This is a one way, a a nice simple way to go, actually, for every 120 quid we get, what do we have to cover? And actually it's quite a, it's quite fascinating to see where people think you spend the money.
Main thing, keep it simple, like this. You can use your own practise P&L. Again, building into that transparency there.
I, I would encourage that. There, there is a careful line, I must admit, you know, if your profit is negative, the team may well worry for job safety. So just be a little bit mindful there, but kind of getting an idea actually what does it mean for XY vets, gives that real insight into our practise and how that's run.
And I say gamify it, make it relatable. Gamify makes it sound really fun. But it's a level of take this, use, we use gold coins quite a bit.
Everyone loves chocolate, some gold coins, give everybody, you know, 12 coins and go, right, how many coins cover off our building our fixed cost? How many coins do we give to the team? And then breaking it down that way.
Then you get to sort of see how much of chocolate they get to eat at the end as well. So that's a level of way of sort of going some insight there for the team to understand it. Now, this is money.
This is the kind of thing, it's, it, it's easy, this is the straightforward bit. As, as clinical souls, as anybody in our teams, we are trained for our roles. We're not often trained about the business principles behind it, and this is kind of coming into that a little bit.
But what your team are there, they will be facing those queries from clients. And as much as we're talking about money here and price. This is actually all about value and price doesn't equal value, and this is really, really, really important to understand.
Price is what you pay for something, but value is what you get. Often when people complain about the price it's because they don't feel it was a valuable exchange. The flip side sometimes as well if people feel they're not being paid enough is that they're not feeling valued, so value is really the conversation we're having here.
And I really want to highlight this to you that are joining us today and for you to highlight to your team. Your knowledge, your skills, your time is valuable. You are valuable people doing very valuable work, alright?
And this is a, a, a real big thing there that Alan said in the first piece that really all we've got to sell is our time and our skills, be it because of the CMA and prescription changes, be it, you know, there's a whole raft of things, but ultimately, what is it that clients can't get anywhere else, that is your knowledge, your time, your skills. And this is a massive topic in itself, imposter syndrome and self worth that we don't have time for today, but actually if we want to build some belief, we need people to, Feel valuable, and I kind of want to give you a few little quick things that can kind of help a little bit along that way. First and foremost, pay them a decent wage, a good market rate wage is a very good starting point, but beyond that, it's not, there's not about massive stuff sometimes to help our team feel valued.
Thank you goes a long, long way. May seem really simple, but we often forget sort of the good pieces. So actually, when someone's done something to help you out, being really specific and timely with your thank you can really make a difference.
And, you know, we, I often saw it with particularly more junior members of the team, you know, there is this weird little hierarchy that sits within practise where vets are seen or regarded often quite highly. When a vet thanks a more junior member of the team, there's a kind of a they're like, Oh, this is great. Thank you.
Real big fan of having protected time with your team members, your one to ones, you guys are probably inundated with meetings, lots and lots of time, er, around that, so. Make sure you don't shove these. If you've got time with your people, make sure you keep that time, giving them that 1 to 1 time to talk about what's going well, to talk about them.
Show genuine interest and actively listen to them in those moments as well, and also to give positive feedback. A little bit like the thank you piece, we often associate feedback in a more negative connotation, but when someone's done something really well, give them that feedback. It can make a big difference to all of those.
So a little bit more specific now, how do we get confidence? The team understands where the money goes, we're doing a really good job of trying to make our team actually feel valued for what they're doing. Few more practical tips, we've got to normalise talking about money.
In the UK and particularly in our industry, we are quite reserved in terms of talking around money. You know, we do the job we do for the love of the pets, absolutely. But this is part of consult, all right?
This is part of the experience is that it's talking about how much it's gonna cost. It's private healthcare ultimately. It's also a whole practise responsibility.
Very much a a sort of advocate that the client should not be hearing the bill for the first time when they hit the front desk, that is not fair on your front of house team. We have a sort of rule that if the bill is over 100 quid, you have to be explicit about the price. Oh, you know, it's good practise to do it the whole time.
Thank you, Mrs. Jones, the bill comes to this today. But if definitely if it's over 100 quid, be explicit about it.
People do expect to pay something at the vet's this day and age, consult on some meds, around about 100 quid is fair. And when we do talk about money and try to be confident, we have to be assertive. Now, I wish I could just tell you guys, be assertive, and it would work.
Doesn't go at that, but we can build assertiveness. So you might hear this in practise, oh, I'm sorry it's so expensive. We're literally setting ourselves up, we're starting with, I'm sorry, which goes, well, what have you done?
What are you charging for? Try reframing that. I understand this is a significant investment.
You might want some time to think about it, here's the estimate, I'll give you a call. Again, use your own natural language, but taking away that I'm sorry. Have heard this as well, ooh, here's the hard part, you're sitting down, take a seat.
Again, we're framing ourselves up. For the, for the consult meds, treatment, etc. The total comes to 170 pounds.
Alright, just actually having that there, let's not set ourselves up for failure. When it comes to actually this price and value piece, this is that the key thing here is value. Explain the benefits first, right?
What is the client, what is the patient gonna get? What is there? How is this gonna help things?
Why should I want this thing that you're trying to sell to me? Because ultimately a, a recommendation, we are selling something. So the pre-anesthetic blood tests are 75 pounds, so they'll check Fido's liver, kidneys, hydration, so we can make the GA as safe as possible and we get the results today.
Literally flip it, OK? Same thing, I've just moved the price to the end on this. The reason is our brains will get stuck on that initial, piece there.
The pre-anesthetic blood test is 75 quid. The client is only now gonna go, 75 quid, 75 quid. We're not gonna actually know, well, how is this beneficial?
Actually, is this gonna improve safety, etc. Etc. So this is the same phrasing, just flipped.
So go with the benefits first. And this is a very simple example. As clinical cells, you know, we know what's involved in a dental and a pyo and more involved things.
The client doesn't, OK? So actually explaining those benefits is really important. I'd also recommend only giving one price.
So, you know, obviously your consult is 5650, the meds are 2740 pounds, the urine test is 12 pounds 50. People aren't Carol Vorderman level of mental math geniuses. So going, right, so for the meds, the consult, the blood test, that comes to boof.
Also, the same thing, I would say for estimates and procedures. So you might be going, well, what's wrong with this? You know, I'm giving them a price bracket.
Absolutely, absolutely give an estimate, and we know that those rules will be coming in as well. Anything over 500 quid has to have a written estimate. But again, human nature, we will try and fixate on that first bit, that smaller number.
OK, so, you know, the op's gonna be 800 to 1000. Even if you've told the client it's between 800 and 1000. Saying up up to in their brains actually has a, a more positive effect.
So, you might go, estimate within that realms, it comes in at 850. If they were told the procedure would be up to 1000, it's almost being quids in, because you're like, Oh, I've saved 150 quid from what I was prepared to pay. On the other example, between 800 and 1000, if it's 850 pounds, you're like, well, it's, you know, it's what I expected.
Small little shifts, but that little bit of saying up to one price. Is really powerful. And if you're going through this with a client in the consult room and going, right, yep, we're gonna do that mass removal with everything that we've discussed there, that's gonna be up to 1000 pounds.
And pause, and I've not even done a full length pause there at all, that is a mere seconds. But in all honesty, the power of the pause is immense, because it's uncomfortable, right? We can sit in that moment and go, Oh God, will the client be able to afford it?
Maybe I should start taking things off. Oh, we don't have to do the blood, so we don't have to do the, fluids, we don't have to use pain relief, maybe. It's very tempting to fill that gap.
But what clients will often be doing in that moment is 1000 pounds is not small fry money. They may well be going, right, OK, this month I've got these bills to pay, this to do, right, what can I move, which credit card can I use? You know, we're asking them to part with hard earned cash.
They may need to do a little bit of time, a little bit of time to think about that. So try not to fill that gap with verbal diarrhoea. Let it sit.
If it's going on a little bit long, OK, how do you feel about that? How does that sound? Have you got any questions?
Invite an open conversation at that point in the consult. Another thing we can do, and this is more from a front of house side of things, is potentially having a few little phrases or things that people can feel confident are enough to say. This again comes down to you knowing your team, and you might not like the wording of this, it feels very businessy, I must admit, but if we go to our teams, yes, this is what it costs to run our prac this is what it costs to run our practise, this is why our prices are what they are.
We are going to be having some price changes. How can we kind of support the team? Crib sheets can be really helpful around it all there.
So, again, grab a screenshot of that if you find that useful, just to have that little bit of like, actually, my team could really benefit from that. And the key thing as well is for all team members to be consistent in how we are talking about fees and across the board. This is not just a front of house problem, this is a whole team piece.
Now, not a famous quote, but I quite liked it. Clients don't measure value by looking at the bill, they measure it by how your team makes them feel before they see the bill. So, as I said, price is what you pay, value is what you get.
The whole client experience adds into that value. The fancy word is the practise value chain. Ultimately.
It's your culture and all the touch points. So, from their experience with online, when they rock up to the front of the reception desk, when they're sat in the waiting room, when they're in with the vet, when they're having that surgery that comes afterwards, all of this, every role in practise, contributes to that client's experience. So, it's thinking about where is value created or lost.
Within this, have we got good front of house that welcoming and smiling to people? Is our website looking good? Is our, you know, our, our actual premises clean, tidy?
Are our vets, our nurses communicating well with the client? Are we communicating, you know, in return around that? How easy is payment?
All of this will feed into a client's perception of the practise. So just coming back to it, really, transparency creates an understanding. If your, if your team understand, the team can see where the money goes in practise, how your pricing was created, that understanding is going to start creating belief in the system.
All right, a little bit of belief, but, yep, we know why our prices. Are what they are. To tailor that with actually them feeling valuable and how we can do that or help improve, that belief will then foster much more confident communication to the client.
If they understand why your consult is X amount and why it's gone up, they can feel and translate that to your clients. So a very quick run through and so as I said, thank you, you are absolute diamonds around sort of listening to this, and your team are absolute diamonds as well. And we're now going to hand over to Rebecca for the next stage of this.
The, I've already explained it, but the team is still resisting change. You've done all of these pieces, so how can we get our teams more accustomed to change? So I'll hand that over to Rebecca.
Hi, so we've heard how the pricing, changed, why the pricing needs to change in lots of practises, and we've heard how, you need to train your team, but we do that and we still get this resistance, we get this, but I've feeling I've, I've already explained this, why are they still resisting? So we're gonna look at resistance in the team, and we're gonna use price changes as an example because we've actually got to implement it, not just do the training, gotta actually get it to work. We're gonna look and from the point of view of .
Why your team resists it, so the causes of the resistance, we're going to then look at what, what we see in terms of resistance and the different varieties because everyone reacts differently, and then look at how we treat it and prevent it. So just looking at some of the stats around resistance, 41% of resistance is due to lack of trust in the leadership themselves. So Gemma talked about transparency.
If there's more transparency, there's going to be more trust. 39% resist due to unclear reasons for change. So there's that communication and training we need to, to go for.
38% resist because of the unknown, and 48% of people experience stress because of too much change or inappropriately managed change. An average business currently undergoes 5 major changes in 3 years, and so we're seeing this more and more. So why does change and a price change, a price increase is a significant change for the team, create that resistance, and it's because we see that change as uncertainty, it creates uncertainty for people.
And that makes people feel threatened, not physically threatened, obviously, but it makes them feel unsafe, it makes them feel like they're not, who they or they can't be who they should be. And with price changes in particular, it's actually a threat to their caring identity often. So, a lot of our teams and a lot of us as leaders will feel that charging is not able to sit alongside being caring in their minds, and they'd like to see themselves as a caring profession and so does the public like to see us as a caring profession.
And so having to charge even higher prices is another threat to that caring identity. The safety element can be in their worry about how the client's going to react to them, but also in how they're going to be perceived as capable. By people, can they actually manage that situation, and then the other threat that they can feel with any uncertainty is whether there's fairness and clarity.
So, Gemma's laboured the point transparency, and this is really important to get people on board. So if we understand that that uncertainty comes from genuine concerns, we can really start to view it in a different way. So resistance is a useful tool.
It's rarely about attitude, although it can feel like it when you're trying to get people on board. It is usually much more about how much people trust and are trusted, how safe they feel, whether they're involved, and whether they feel they can manage the workload. So to get people on board with price increases, we need to make sure that they're given the tools, that they're involved in the process and they feel able to deal with it.
So what do we see in resisting people? Well, the obvious people are the active resisters who, argue back, say no, they find endless problems with the potential change and. They, they're the obvious ones.
We have the other end of the spectrum which are the really passive ones, and I think these ones that take longer to spot as resistors, but they almost agree, sometimes they actually do agree to doing whatever they're asked to do, but then they don't follow through. They don't, er, they revert to old ways, and sometimes, and I think this is the one where that quote at the beginning is really, poignant, is, is they feign confusion or or lack of understanding of what they've got to do or even ability of what they've got to do. Now they don't do this to be awkward, they do it because they feel, concern about that uncertainty.
There are some people who, and, and this is where we want to get more of our team, if they are resisting, we want them to do it in a constructive way, so we want to have them actually bringing forward their worries about it and suggesting solutions to what they have come up with. That becomes really constructive and helps change be implemented in a much more successful way. So, With people and with a pricing change, they might suggest the timing which they want to be told and I had feedback that we set in place in our practise a rule that every time we did a price rise, any estimates would be honoured for a month, so we had a bit more of a structure so that people didn't get estimated one day and the next day they were charged more than that.
Simple processes make a difference to the team and give them a bit more certainty of how to handle it. And I found personally that actually understanding the cause is the uncertainty and that actually the resistance is because they are actually, wanting to make it work and wanting to do a good job makes me able to be more patient and, which is what I need to then deal with the resistance. So.
Viewing that resistance as useful information will then make you curious, which is what we need to do when we start treating resistance and, With . Any resistor, usually sometimes in a team meeting, but more commonly you need to get on a 1 to 1 basis cos it will be different for all. We need to ask questions.
There are lots of questions. I've put up a few examples here. Other ones I, I like with, team members who are resisting is what will happen if you do do this and what will happen if you don't do this?
Or if we do this and we don't do this. And then what won't happen if we do it and what won't happen. If we don't do it, so you get to actually get them to think about the situation and you're starting to involve them and listen to them.
These questions, the, the, particularly the bottom three of these, they won't know how to answer straight away if they've not been asked them before because it's not something we commonly ask, What's the most stupid thing I'm asking you to do? But it will make them stop and think, what are the bits you feel are stupid or worrying, and it will make them stop and think, well, actually it's not that stupid, it's just not comfortable, and then you, it's a different conversation. Having said that, they may think something is really stupid and that needs answering.
So, questions and curiosity are really important and we need patience to do that because as er Gemma highlighted, and I'm going to echo the sentiments. We need to listen really carefully when we ask these questions. So we need to have the right frame of mind and that's why seeing the resistance as information rather than a barrier is really helpful to give us that, mental ability to really truly listen to what they're worried about.
I know when I did some training with the team because I was due to do a significant price change cos I was implement implementing cost-based pricing for all our services, I had quite a few people who were not worried about talking about it. They were worried about the fact that we were gonna lose loads of clients. But I needed to understand that first, and then secondarily they were worried that patients weren't going to get the care they needed.
And so we had to explore how we were going to handle those different situations, and what the important thing is once you start understanding what they're really resisting, what their objections really are, then you can acknowledge them and they feel heard, so they feel valued. Back to Gemma's point, and they're more likely to come on board with you, and then even better get them involved in, creating the ideas of how you resolve it. With my significant price change, my team suggested that with the repeat things that people will come in for regularly, we actually phoned the clients that had those regular things and gave them warning long before they tried to book in for it, so that they had an understanding that the price was going to be significantly different to their original expectation.
And the team, when it's their idea, they're much more on board with doing it, so actually helping get them involved is really helpful. So I've talked about how to treat individuals, but that can take quite a lot of time when you've got a lot of individual resistors. So what we really want to do is implement change in a way that, prevents or reduces the number of resistance and the amount of resistance in each person, and to do that, a significant amount of preparation and thinking before announcing the change is important.
So when announcing the change, we need to be clear and concise. We don't want to go on for hours cos our message will get lost. We want to present why we need to do it, why it's important we're changing.
Alan presented some figures there that showed why some practises will need to make some price changes. And the need needs to come with why it's necessary and why now, so the urgency. OK, so not just the change, but why is it happening and, and why is it happening now?
And Before announcing it, we need to understand the effects and the impact it will have on our team. In particular, but also on our clients cos they're gonna be thinking about that too, so working out the facts and the different situations that might be affected differently, so that you can show you have thought about it when you get questions, it's really good to acknowledge the impact it will have on the team. I know this isn't gonna be a comfortable change for some people, these are the things I'd like to help with, what else can we do, would be really good.
And then thinking about who you will tell and when. Something like a price change, it seems a simple and a matter of fact thing, but because it has all these emotions attached, because it links to us and people feeling like they're not being caring when they're charging for, for their time, it isn't just a simple fact. And so we do need to actually usually talk to people.
Now I got to the stage in my practise where I didn't have to have a whole team meeting every price change I made. You'll be relieved to hear. What we did was we did some training around where our figures were with that 120 slide every year, and we had an agreement of how we would tell everyone when there was a price change.
So we would send round an email with detailing the price changes a week before they went live. And that gave people time to question us and we would always honour the estimate for a month after the price change. So there were some set rules around how we communicated it.
Face to face is better than any kind of written format because people can see your tone and your body language, which means they're more likely to trust you and trust your intentions with it. So, if it's going to be received negatively or potentially a face to face discussion in a, not, not 1 to 1 necessarily, in a meeting is gonna come across better than the written word. And I, I learnt more belatedly, it would have saved me to learn this sooner, is think, trying to prethink what their worries and concerns will be so that I could have information up my sleeve that I'd already checked to allay their fears or to say how we, we were going to monitor for their worries to make sure that they didn't come true.
One of the things we did, just as I made the price increase, we had a cheaper competitor set up near, nearby. So my team were really worried. So we monitored the clients going elsewhere.
And checked whether they were good clients or otherwise. And once you've done that, you can just deliver the message and ask for feedback. And you can ask for feedback even with a pricing change you can involve them.
They don't have all the facts and figures of the costs, so they can't set the prices, but they can help you set the pricing structure, they can help you with how we communicate it to the clients, and they can help you with what support they need. So there's always questions to ask them to involve them in the process. And asking them what challenges they see as part of that involvement.
So it working out what questions you're gonna ask to them. Involve the team and make them feel involved, genuinely involved. So finally, a quick rush through, ideally, once you've announced the change, you'd then involve some of the team in implementing the change.
And ideally you would use people from different roles, so you would have a nurse, a vet, a receptionist, maybe someone from the leadership team, and they would follow this. Process of of setting that vision of what the successful change will be like, that's pretty easy with the pricing change because you can measure the metrics of turnover and profit. Sometimes it might be just keeping profit the same with increased turnover, sometimes it might be increasing profit, depending on what the practise stats are like already.
And then they'd set the realistic time frames, work out what skills and training need to to be created, if there's any systems need changing, create the that action plan and communication plan, and then keep a a have a process for reviewing how it's getting on and the success. Once it's successful then making sure it stays successful and we don't revert to old norms. So ideally you're using the whole team to get involved.
But you can summarise most of what I've said here by these things. When you're communicating around change and price changes are no exceptions, we need to remind the team of why it's important. Otherwise it feels just like an extra challenge for them.
So if they understand why it's important, that feels a a bearable extra challenge. We need to acknowledge what they're worried about and we need to show that we're willing to adapt when our data shows that it's not working or that there is a better way. Even when, because uncertainty is the main issue around the change, even when you don't know the outcome, so I didn't know if loads of clients were truly going to go to the the local competitor.
I was able to say well we're gonna monitor it and we can always change our plan if we need to. So, lead by example, we've got to be confident of our change if we expect our team to be, . Confident with it and really involve them to empower them.
And finally I'll leave you with the thought that change isn't about perfect planning, it is about how you show up for those people and that's how you can make it easier for them to accept even price increases in practise. Thanks for that, Rebecca, and Gemma, and Alan, yeah, really awesome. It, it's obviously a, can be a bit of a, it sometimes feel like a bit of an icky subject, so the ability to translate it from the, the subject, cos the reality is some members of the team will feel uncomfortable on day one, and the ability to, to communicate that with, with clients is, is, is probably the number one skill we need to learn at the moment.
So yeah, really great talks guys, I would encourage everyone who's, all the attendees to, you know, when you walk out of this, have a look at your own 120 pound breakdown, share it with your team. You know, I, I think sometimes there's a bit of a disconnect there with, . The rest of what your team expect to be getting out of it, a lot of your team will think that, you, that, that the practise owner is getting 40 or 50% of that, so a really good ability to, to have a look, and share with the team and find out what they think, would be a really valuable thing, and then if you need to know.
Your numbers a bit more, and you've seen lots of really good spreadsheets. The Vet Dynamics guys have got really good programmes and software to help you pull apart your numbers, show you what they need to do, your C1 to C2 ratios. So that's, you know, get in touch with the guys after this to, to, to, you know, some of those numbers are, are extraordinary.
When Alan was showing how we can, you know, by simple changes, add 170,000 to your business, that's, you know, that's life changing. So, yeah, encourage you to get in touch with the guys, so you can move your business to the next, next stage of, of financial profitability in the money conversation. Yes, there's one question that just popped in at the end there is into the thing.
I know you were asking all the way through, Steven. Rebecca. It's, I'll read it out.
I can, I can do hosting too. This is good. You take the question.
There we go. So it says, for Rebecca, may I ask you, I've experienced often that when I have a meeting with my team about increasing or adjusting our prices, they seem to be expecting quick improvements and palpable changes, if that makes sense. And many times I cannot show them that in less than a 6 month period.
Any advice? Yeah, I think the, advice I would say is actually keep the money conversation on the table all the time, that normalises it for them. So that 120 slides, some of our practises will actually publish that on a monthly basis so they can see the gradual changes, and.
And set, it's about setting the expectations at the beginning of when you expect to see the significant changes, some of the pricing does take time for it to really show in the figures, some of it you can see instant changes, but, with a lot of changes there isn't an instant result, and so it's, it's setting the expectation of the timeline with the team as well. It's that cumulative effect piece, isn't it, really, that's going to add all of the little things add up a lot of the time with pricing things, particularly small adjustments to a lot of stuff can really add up. That's what we sort of often say quote annual figures, but generally, I think, you know, Anna's got it right there as well, at 6 months is probably about right.
Yeah. I have one question, advice on partly what you were talking about, Alan, but also the behavioural stuff, Rebecca and Gemma, you were talking about. Advice on tips for the, the post-op free consultation that obviously drastically drops our average value down.
Is that something perhaps we should be pricing on our invoice? Is it something that we should be charging out per time, if that's a nurse or in some practises it's a vet? But obviously you do two of those on a post-op procedure, that, that is the difference between zero price and a full price.
How do we market that to our clients and how do we market that to our team, what we should be doing? I want to jump in with saying included, inclusive post-op, not free. I hate the word free, it's inclusive into it, and so yes, and make, but make sure it is actively priced in rather than assumed to be in.
And so were you suggesting itemising it on my estimate for two consultations or hiding it in inverted commas, but bearing it as part of the surgical procedure. No, itemising it. I, I, when I introduced it a long time ago in, in a practise, I started telling the clients that that's what I'd estimated for that there were two post ops included.
And after that, they will be chargeable again. And despite the fact at the time I was changing from 0 to 25 pounds, it's a long time ago. I got thanked.
So I felt like I was being thanked for charging them an extra 50 pounds. And was, and was there any kickback from clients for that or the tea more so clients clients. There was very occasional people saying I didn't come back and I have 25 pounds back?
And we did refund that money. I, I went with the rule plan for the rule and deal with the exception on that one. So, but very little, yeah.
Excellent. Good question, Steve. Good, simple way around that is that we classify surgery in grades 1 to 5 by complexity and involvement.
With that we add in post-operative care packages that are typically 1234 or 5 follow-up consultations and then price those up as and then on the procedures as post-op package 12345. Adding those into the estimates, it's then a bundle of post-operative care, you don't need to nominate the actual number of consultations, you can just say it's a post-op care package for all the post-operative care that your pet will need until it is better. One of the little tricks you can do with it, you occasionally get the dog that comes back with the dihist wound and intestines floating around the living room.
That need to be looked after, and you have an almighty fight with a client is that they didn't put the buster collar on, well, you didn't stitch that properly and it turns into a, a, a dying animal and a client loss. A simple way would be because you're, Now charging post-op care packages for all your surgery, you have a basic funding that you could just deal with an animal appropriately, get it fixed, get the client happy, get the dog well and get it home and just say, it's on us this time, etc. So it's, it's, the packages work well, and actually fill in the, the financial advantage of that is several tens of thousands of pounds a year leakage at the moment.
Brilliant. One final question which, early on, Alan, you were talking about the hidden profit that, that sort of exists in a pra practise. Where is the, where are the most common places that it tends to be hidden that, that we should be looking that we haven't thought of?
I mean the, the discounting number one is, is the biggest one of that reducing charging as you do more work for whatever, the unofficial discounting of just leaving stuff off the invoice or invoicing in the evening when you did the consult in the morning and you've just forgotten stuff, and missed billing, missedbilling is a big piece we've got a process now we can pick up missed billing out of our index figures, and actually we're showing, quite high percentages of missedbilling on certain individuals, back to Gemma's idea, this has to be a practice-wide approach to dealing with missedbilling. I wouldn't use it as a big stick to beat individuals, but odd individuals need a big stick occasionally. Yeah, and I think it also what you were saying, Rebecca, in terms of talking to people, when we found occasionally with a person that was missing billing, it, it was a, it, it felt like it was going to be an awkward conversation.
It was actually a really easy conversation to say what's your thought process for not in, you know, not charging this. And usually there was a legitimate, a, a reasonable reason, it just was wrong. And once we could talk them through it and go, you know.
The reason you're not doing this, you, you know, I, I had a colleague who, who wasn't sort of giving injections because they were worried that the owners weren't gonna worry about the price, so they would just give tablets instead of injections. And when we had the conversation, actually, we get more complaints from an animal that isn't better because you've not injected them than we do for the price. Totally transformed it.
But the their reasoning was really logical, so I think you're right, that's a conversation that feels icky, but you have it, and it. And it solves a problem that saves thousands of pounds a year. So I really like Becca's framing a bit of being a curious conversation as well.
I think often we call them difficult conversations, and a bit like you're sort of saying, you know, you're setting yourself up that, if you're thinking it's difficult, it's going to be difficult. Whereas if you're going into it with that curious mindset, you said there, Steven actually understanding, right, this is happening, so what's going on. It changes how you feel about going into it, which hopefully is going to be a much more productive outcome, particularly if you have got sticky individuals, you probably know them in practise, the ones that are more inclined to not put the things on the bill.
I got one of my most challenging vets to help me create some of the pricing so that she understood where it came from on that. So again, it was helping educate her on, on where it came from and she I think she worked it out. I think 120 pounds is, is an awesome one, cos when we first did it, and we sort of started with, right, we're gonna break 120 pounds, how much do you think goes into my new Lamborghini and my yacht?
Most people would think it's probably about half, just cos they've never had a business, and so it was amazing at the end when we went, actually, you know, it's closer to 5%. Which is, you know, the buster colour we give out free as we walk out the door, we are now negative, and that, I think, made a lot of people go, huh, we thought you were the number one taker and we were at the bottom, and in fact it's the reverse of that. And that's that transparent conversation which, as you say, just makes it easier following on, doesn't it?
Yeah. Yeah. Super, well I think that just about wraps it all up unless there's anything else you guys wanted to add.
But it's been a quick and dirty in the best kind of way hour of things, lots for people to process on a Tuesday lunchtime. So, yes, no thanks to the webinar Bette, and thank you to you, Steve as well for hosting us. Yes, thank you very much.
