The Ultimate Vet Practice Business Model
What IS the best business model for your veterinary practice? Sales Funnel or Flywheel?
I sat down last night to write an article explaining how Veterinary Practice Owners could apply the popular ‘sales funnel’ concept to increase their business profitability.
I thought yes, I’ll use this analogy to demonstrate where clients may be dropping out of the funnel and provide some ways practice owners can attract more clients into the funnel. Besides, every other business model is using this analogy, so it must work for us too.
Sales Funnel & your veterinary practice
Basically, the Sales Funnel concept involves several stages within your business that potential clients must flow through before (hopefully!) becoming a regular client.
The stages consist of:
1. Awareness – At the wide opening of the funnel, we find lots of pet owners who are aware we exist (they drive past your practice, see you at Community events, etc.),
2. Interest – Some of these pet owners then become interested in the practice (perhaps starting to follow you on social media),
3. Decision – Some make an appointment for an initial consult,
4. Action – They agree to your recommendations and return for follow-ups if required
5. Connection – Some of these then become loyal clients.
As the pet owner travels down the funnel, we create an emotional connection and build a strong lasting relationship. The goal being that those who reach the bottom of the funnel come out gold class clients – they give us a rave google and Facebook reviews, sign up to our wellness program and recommend us to their friends. And there you have it, best business model ever!
But there’s a fundamental problem…
Except that it isn’t.
You see, there’s a fundamental problem with the Sales Funnel and the veterinary industry. Once clients drop out the bottom of the funnel, they disappear and that means the business emphasis is placed on always having to attract more new clients.
This theory is also too linear and so when it comes to measuring the growth of your practice and the momentum you can build acquiring new clients, it sucks.
The Flywheel analogy
Then I discovered the Flywheel analogy.
A Flywheel, like the ones we saw on 90’s game shows, is simply a disk on an axis that is incredibly energy efficient and great at releasing energy – unlike funnels, which actually lose energy!
The Sales Funnel suggests you put in customers once, and then they reach the bottom and it’s all over. However, with a Flywheel, the amount of energy it stores depends on how fast you spin it, how much friction there is, the composition of the wheel itself, how big it is and how much it weighs.
Oh, I like where this is going……
One of the reasons I don’t believe the Sales Funnel concept is suited to veterinary practices is because it ignores just how much existing clients can help grow your practice. Since word of mouth is the cornerstone of any successful veterinary practice, and our businesses are based on building trust with our clients, we absolutely must have a model that represents that.
While Funnels lose their momentum at the bottom, Flywheels leverage their momentum to keep spinning and are therefore able to efficiently preserve their momentum. And this is very important distinction, as when you think of your practice as a Flywheel, instead of a Funnel, you will make different business decisions.
With a Flywheel - it’s ALL about your client’s experience
Under the Flywheel analogy, you’ll invest more in client experiences, client support and in making damn sure you’re creating a delightful onboarding experience for new clients as soon as they walk through the door.
Also, because friction kills the flywheel, you’ll have to think about the areas of friction experienced by clients within your practice:
- What investments can you make to target your biggest points of friction?
- How can you get your fly wheel spinning off the chart by improving your client’s experience?
It’s time to take action!
Get a pen and paper and write down the answer these questions…
- What can you do to maximise the delight of your clients?
- What can you do to encourage word of mouth to grow your practice?
- What are the areas of friction between your staff and your clients?
- What areas of friction exist within the team that effect the client experience?
- How can you better manage these friction points through staff development and training?
- Do you have defined practice values?
- Do you have defined and shared goals?
The Flywheel offers solutions for every part of your practice
Here’s how we need to be thinking about each stage of our vet practice flywheel:
1. Attract
Attracting pet owners to the practice through word of mouth, google reviews, marketing and community events. You want to be doing things that create conversations about your practice and lead to meaningful relationships with the right people.
2. Connect
Connecting with your clients is about engaging and building lasting relationships by providing insights and solutions that align with their pet parent concerns.
3. Delight
Delighting is about providing an outstanding client experience that adds real value, empowers pet owners to take great care of their pets, and become promoters of your veterinary practice to others.
How healthy is your Flywheel?
To determine the health of your practice Flywheel, ask yourself these two questions:
1. What investments are you making at each stage of the flywheel?
2. How are you measuring the success or failure of those investments?
When you started your practice, most of your resources would have been focused on the attracting and connecting sections on your Flywheel. And so they should have been – you needed to focus on getting that wheel spinning.
But now your Flywheel is spinning, your resources are better spent on delighting customers as this is where the real momentum comes from – retaining your clients and transforming them into promoters.
Enter this intention for next week in your diary: Maximise delight!
There are tonnes of ways to reduce friction in your Flywheel and this is the kind of challenge that excites me.
- How many of your new clients don’t come back?
- How many of your existing clients don’t return for their rechecks?
- What are your clients complaining about?
- Why is this happening?
- Where is the point of friction?
- How can this be addressed?
So you see? Your practice is a flywheel, not a stupid funnel!
If you have any questions as to how the Flywheel analogy relates to your Practice, or how you can remove friction points, ask them in the Comments section below.