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Are you a passionate veterinarian seeking to elevate your practice and make a lasting impact in the field?
Welcome to "The Vet'Ed Podcast". Join Steven Hermann, Kale Flaspohler and Lindo Zwane - industry experts and thought leaders, as they delve into tailored strategies and nurturing relationships to empower privately owned veterinary practices.
Tune in the first and third Wednesday of the month to gain invaluable insights, tips, and inspiration to thrive in your independent clinic. Together, let's build a community dedicated to advancing veterinary care. Subscribe now and embark on a journey towards lasting success in your practice.
Are you ready? Alright. Hey, everybody. Welcome to the Vetit Podcast mindset series. We're coming off of our last one was the client experience.
Steven:Hope you all found some good things in there as that does matter big time. So, alright, let's get into this. You've got your client experience going well. So let's talk about pricing. I think the question you have to ask yourself is pricing all in your head.
Steven:Pricing is a big discussion out there. Right? How do we price our services? How do we price our products? What about competition?
Steven:What about offending my clients? All those things that go into it on pricing are in your head. No question about it. Let's get through this episode and hopefully give you some good things to help you with the growth mindset on getting the pricing right. Where do I come into this with pricing?
Steven:Well, I think you all know by now, growing up in a grocery store family, pricing was a big, big deal. Probably one of the most competitive priced things out there are groceries, something you buy all the time, something you really do know what the prices are. You know what a gallon of milk cost. You know what eggs cost. You've seen inflation out there.
Steven:The things people know about price wise is in the grocery industry. Now being an independent, just like I'm hopefully speaking to a lot of independents out there right now, you're gonna see the same things that, we see. Right? We're not Walmart. We're not Target.
Steven:We don't have the buying power of those things. So what are we gonna do to make ourselves separate from that? Does that sound familiar? I bet it does. You think about the corporate world out there and the veterinary space.
Steven:Now I want you to think about what's different about the corporate world in the veterinary space versus the corporate world in the grocery space. In the grocery space, they wanted to put you out of business. In the veterinary space, I don't think corporates wanna put you out of business. That is not not what they're trying to do. So I think that's a positive thing about everything.
Steven:So how do you get leverage if you don't have the pricing or the cost that acts as a cost that, you know, the bigger corporates have because of buying power? But I think the thing is to look at is that, really, the pricing isn't just about the cost. It's about positioning, value, and like we've always said, mindset. So how do you compete on more than price? One thing in business matters.
Steven:Well, the three things. Right? The joke? Location, location, location. Our grocery stores, for the most part, you had to drive by our stores to get to our competition.
Steven:So if you gotta drive by us, there's a good chance you're gonna stop with us and shop with us. So that's a key thing. Question is, where how's your location? Talked about client experience before. That really is a service thing.
Steven:What do you offer that separates you service wise? What differentiates you? That is an important thing. And on service, hey, as a small business owner, as the owner of that practice, you're there yourself. If your competition happens to be corporate, well, the owner's not there.
Steven:And so you have an advantage right there with your clients to build that personal connection. And personal connections go a long way. Got your client experience right, pricing right, personal connection right. Pretty much got a winning scenario there. But also a differentiation is, you know, what services are you providing that are different?
Steven:How do you go about providing that service? Are you high service? Are you high volume? What is your business model? It is important to know.
Steven:And so, you know, if all things are equal along here, and we'll get back to pricing, The question is, are you the problem? Right? You might be the reason prices are stuck. So mindset does matter here. The question is, are you feeling like you don't have the resources or is the problem that you're not being resourceful?
Steven:And I think it really all always gets down resourcefulness. That's what makes independence so much fun to work with. Independent business owners are very resourceful. It's where innovation comes from. Right?
Steven:The big biggest businesses you see today start out a small businesses. They were able to innovate, find a way to compete, and solve the problem. You have the opportunity to do that. So really that gets into that fixed mindset versus the growth mindset. And the growth mindset again says, let's figure this out.
Steven:Fixed mindset's gonna be like, you know, I'm not sure that I have had the staff to do this. I don't even know where to start with this. I have this invoice here with this cost here, but what do I do with this? I can't raise my prices because I'm gonna be more expensive than my competition. But if you think about that, that's a fixed mindset, and you might be causing on that side of the competition pricing, you might be keeping them in a fixed mindset too because maybe they're waiting on you to go up and price and say, it's okay.
Steven:We need to be priced appropriately. Wanna add that in there. That's really important. You have to be priced appropriately. Let's say you have location, you have your competitive advantage differentiation, and you've got the great client experience that does not give you the authority to charge prices that are not appropriate.
Steven:That will put you out of business. There's no question about it. Charge appropriately. I I look back. I I've heard the story of, would you rather make a fast nickel or a slow dime?
Steven:Think about that. Would you rather make a fast nickel or a slow dime? Now dimes worth more than nickel, but you might get a nickel today, the dime might come a year later. You're gonna wanna wait on that dime. Right?
Steven:So have patience on this. So again, let's get into you've got this invoice in front of you. What do you do with it? Well, you have vendors. Your vendor is a person on top of that invoice.
Steven:Whoever you bought that from's got resources for you to help price appropriately. They want you to be successful. So if you're successful, you're gonna buy more products from them, and that makes them successful. It is not a zero sum game. All of us can win together.
Steven:And if you need more help, hey. There's coaches out there. There's firms out there to help that. At the Pro Partners team, we're happy to be able to be there for you. We can be, but there's also a lot of good firms around the country.
Steven:You can check out Vet Partners. If you go to vetpartners.org, you can find a list of companies out there that might make a good fit for you. So I think that the other thing you can do is just look at just raise prices. If you haven't raised prices in a while, and you look at inflation, take a 10% price increase across the board. It's not gonna be the end solution, but at least somewhere to get you going to where you need to go.
Steven:Why do prices matter? Well, let's dive into that well for just a minute outside the mindset. A well run practice has a cost of goods sold of 25% of revenue. Alright? So if you're not at that 25% of revenue, you have work to be done.
Steven:If you're there, congratulations. You've got a good system. If you're there and you don't know why you're there, maybe you need to get a good system because it's not gonna last. We've seen that tier. People have showed a good gross profit, but it doesn't last.
Steven:So make sure that's a growth mindset. Right? Even though I do have a good gross profit, is there anything I can do to, one, make it better or two, keep it sustainable? So at the top of it, is pricing all in your head? You're damn right it is.
Steven:You're damn right it is. Get out of your head, seek the help you need, and be open minded to charging appropriately. So I encourage you to just take action because what we wanna see a lot of times, especially with the veterinarians, you are thinking about when you're diagnosing an animal, healthy, sick, whatever's going on, you know what to do. You already have you've been taught what to do. In the pricing world, maybe you haven't.
Steven:You don't have to worry about the perfection. If you get a price wrong, it's not like holding life in your hand. It's just a price. It can be fixed. It can be reset.
Steven:Don't worry about that. If you get pushed back from clients, change your price. Go down. Not that big of a deal. You have the ability to do that.
Steven:So make sure your mindset is a growth mindset. Make sure that you don't have your veterinary diagnosing hat on when you're doing pricing. Put your business hat on. Get in that frame of mind. And, the great thing about business is is you can change it.
Steven:So, hey, I thank everyone I wanna thank everyone for listening today. It's sure been a pleasure talking to you about is pricing stuck in your head. Tune in every Wednesday to listen to either the better podcast with my good buddy, Kale Flaspowler, or the mindset podcast, a short ten minute little tidbits to hopefully help you take your practice to the next level. Thank you so much. Till next time.