Oooh That Smell, Can’t You Smell That Smell – Materials

Oooh That Smell,
Can't You Smell That Smell?
By: Fritz Wood, CPA, CFP

Measuring Client Retention

Every time a client visits your practice, they instinctively know four things:

  1. Was it a good value?
  2. Did I get my money’s worth?
  3. Will I come back?
  4. Will I recommend this practice to others?

Since return visits by existing clients and referrals by existing clients are the lifeblood of every practice, it’s important they answer a resounding “Yes” to each of these questions.

How do clients arrive at this “gut feel?”

Consumer scientists say we’re continuously taking in experiences, and comparing them to our expectations. If the experience in total is better than expected, consumers tend to feel the price was fair and are likely to return.

According to long-time CEO and author Jan Carlzon, there are three powerful “Moments of Truth” in every business trasaction (this is when a client determines whether the price was good, wether they’ll return, and whether they’ll refer).

These “Moments of Truth” are:

  1. The very first interaction (very likely a telephone call)
  2. The very first live interaction
  3. The very last interaction

No surprise here, the reception staff controls all three. From a customer service perspective, the receptionist is the most important person in your practice. Even while clients like their doctor, it’s the receptionist who largely impacts client retention. I strongly encourage a Mystery Shopper to keep your finger on the pulse of what’s happening at these critical touch points.

To me, the single most important number in a small animal veterinary practice is the Year-To-Year Client Return Rate (sometimes also called the Bonding Rate). Very simply, what percentage of the clients you saw in 2013, were also seen in 2014?

If you practice in a stable (non-transient) community, I would expect your practice to be around 68%. If it’s lower, your number one objective is to learn why clients are not returning to your practice.

Too many of clients do not perceive value. They don’t feel like they got their money’s worth. They believe they gave more than they got. They are either not receiving veterinary care at all, or they’re getting it elsewhere.

Why might that be so?

  • Your practice smells bad
  • The receptionist isn’t warm, friendly, empathetic and helpful
  • Clients get a busy signal, or are put on hold too long
  • Clients can’t make an appointment quickly
  • The physical facility falls short (parking, landscaping, general interior and exterior appearance)
  • The client has to wait
  • The client feels rushed…not affirmed…not heard/listened to…not all questions answered…client feels overwhelmed…client feels like they’re being pressured to buy…like they’re being sold
  • Physical exam not communicated/articulated very well
  • Client doesn’t feel special…feels taken for granted

The Bonding Rate measures client retention. Because (on average) clients spend more each year they return, relatively small changes in the Bonding Rate can have a significant and out-sized impact on your bottom line.

If you’re above average, you probably regularly exceed client expectations, you practice in a reasonably stable geography, and perhaps enjoy a relatively younger clientele. If you’re below average you may be falling short of client expectations.

Are you falling short?

  • Is there any malodor?
  • Is your receptionist friendly?
  • Is the telephone handled well?
  • Can clients get in relatively soon with a sick pet and make wellness appointments in the near-term?
  • Do you have adequate parking?
  • Is the exterior of the building neat, well-kept, and up-to-date?
  • How are clients greeted upon arrival?
  • Are they seen at the appointed time?
  • Is the interior neat, well-kept, and up-to-date?
  • Do clients have to wait to pay upon leaving the practice?