Millennials Characteristics: Part I

girl-summer-cafe-happy-young-woman-sitting-urban-coffee-using-her-phone-57337419Characteristics of Millennials: Part I

Millennials is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association. 

We are sharing our thoughts with our blog readers in 8 easy-to-read chunks. In this blog (the second in the series) and the next, we describe some characteristics of Millennials that may help you in understanding these young people.

Of course, individuals differ. Subcultures of racial groups and economic groups also exist. This means that observers who cite characteristics may actually be considering only whites, or Hispanics, Blacks or Asian young people. They may be considering only middle-class folks as those defining the generation. In spite of stereotyping or gross generalizations, however, there is often truth in the claims. With this caution, I’ll share with you some of the characteristics that have been noted and let you decide if they give you insight to clients or teammates you know.

Part I: Five Characteristics of Millennials

1. Technologically savvy   

Millennials are considered “digital natives” – the first generation to be brought up with computers. You may have noticed that they are the early adopters and the ones that can locate and operate the technology that you need. They expect anytime/anywhere communications, as well as speed and convenience.

2. Tolerant and in support of equality

The common wisdom is that the Millennials are more accepting of differences – accepting same-sex marriage and open to the legalization of marijuana.

When it comes to racial tolerance, however, the data is mixed. On the one hand, The Chicago Tribune, cited by Gene Demby when writing for NPR, called the Millennial generation the most tolerant generation ever. It is something that Millennails say about themselves.

On the other hand, Demby found that both black and white survey respondents said that they grew up in homes where race was not discussed at all. Furthermore, public schools are more segregated now than they were 40 years ago.

3. Globally-aware

Technology has shrunken our globe. The Millennial generation has grown up with instant, live information being available from all over the world.

Yet, this is another characteristic about which there is mixed data.   On the one hand, Dr. Gamaliel Perruci, Professor of Leadership Studies at Marietta College, observes an increasing level of integration around common patterns of consumption.

On the other hand, political scientist Benjamin R. Barber points out that many Millennials around the world resist globalization and have become narrowly aligned to a parochial agenda.

4. Socially Responsible

Citing the Millennials’ experience with 9/11 and ongoing fears of terrorism, Michael Unger concludes that these folks have a desire to help others, as described in his book, The We Generation: Raising Socially Responsible Kids. 

Journalist Peter Chen sees a similar phenomenon, based on a different aspect of Millennial experience – the downed economy. He has dubbed this group as “a generation of quiet rebels on the path to find a non-traditional, soul-enriching, values-fueled existence.”

Contrary to glowing and hopeful forecasts for this generation as more civic-minded with a desire to help others and work toward improving the environment, Jean Twenge found evidence that many in this generation are narcissistic and self-centered with unrealistic high expectations.

In the blogs that follow we will describe five more characteristics of Millennials and how those characteristics play out as your teammates or clients.

That’s it for today.

~ Carolyn and John

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Millennials: Clients and Teammates

generation-z-y-x-boomers-millennials-d-word-gears-demographics-words-letters-to-illustrate-different-age-customer-55661718The Millennials Are Here: Clients and Teammate

Millennials! Millennials! Millennials! Seems we are bombarded by references to the Millennials. Who are they? And why are they so important?

This is the topic of our article in the January issue of Trends Magazine published by the American Animal Hospital Association.

We will share our thoughts with our blog readers in 8 easy-to-read chunks.

Simply defined, Millennials are those persons born between 1982 and 2004. They’re given the name “Millennial” because most came of age around the year 2000 – the millennial year.

Many who are our clients are under the age of 34, and many of the newest members of our teams are also of that age.

This is the year the Millennials overtake the Boomers as the largest living generation.   They are not to be ignored.

Authors and demographers, William Strauss and Neil Howe, are usually credited with using the term Millennial as early as 1987, though you will also see the phrase “Generation Y” referring to this group – as different from Generation X.

It is always dangerous to paint any group with a broad stroke, but it has been nonetheless helpful to consider general characteristics of each generation as a way to understand differences. Each generation experiences “defining moments” in history that impact the thinking and actions of that generation. Each group enjoys different styles of music and entertainment that emerge on the cultural scene. Each generation faces a different economic and political climate that can affect attitudes and behaviors.

4 Generational Cohorts

Demographers and other observers have traditionally defined the generations as:

  1. Veterans, born before 1945. These people are usually thought to be hardworking. They are savers (even hoarders) as a result of their experience with the Great Depression. During World War II, they accepted the duty that their country required.
  2. Boomers, born between 1946 and 1964. This group includes the hippies and dreamers. They are often recognized as having brought new forms of music to popularity. Eager to change the world, many in this group ushered in social changes regarding race relations, women’s roles, and the “war on poverty.”
  3. Gen-Xers, born between 1965 and 1981. Many of those born during these years became known as “latch-key” children, as more mothers went to work. They became independent and resilient. They lived through the 1970’s Watergate Scandal, the Three-mile Island nuclear episode, and the disaster in Chernobyl – events that may explain why observers find many in this generation to be cynical and critical of institutions (religious, corporate and governmental). With segregation ending in 1964, this generation grew up in schools that were more racially diverse than those of their predecessors, leading some observers to call them the first “color blind” generation.
  4. Millennials, born between 1982 and 2004. Observers have identified many characteristics, sometimes conflicting. It’s up to you to consider what matches with your experience.

In the blogs that follow we will describe 10 characteristics of Millennials and how those characteristics play out as your teammates or clients.

That’s it for today.

~ Carolyn and John

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Pricing Strategies for Veterinarians

 

Pricing Philosophies and Strategies for Veterinarians Blog#6Covered

In our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outline the dilemma and various resources available to practices to manage pricing. In previous blogs we’ve outlined the challenge and described several references, continuing education resources and consultants that can be helpful.

In this, our 6th and final blog in the series on this subject, we turn to some philosophies and new strategies you may want to consider as you think about setting and managing prices.

In addition to having data revealing what things actually cost and knowing your competition and your clients, practices also need to consider how they feel about various pricing strategies.

Discounting

For example, you may want to think about discounting. Vickie Byard, CVT, VTS (Dentistry), the President of PetED Veterinary Education and Training offers her opinion. In response to the frequent practice of discounting dental services during February, she cautions against discounting. She thinks that it suggests to the client that you could have done it cheaper the rest of the year. Besides, delaying treatment needed in October until the client can get it with a discount in February is not in the best interest of the patient.

Most practices have grappled with the concept of discounts. Writing in Trends last September, Roeder, said, “Discounting actually undermines the value of our services and diminishes the credibility of our pricing strategy ( “View From the Board: profitability is not a dirty word.” Trends, September 2014, page 13, www.aaha.trends.org. ) Some veterinary practices agree and never use them, claiming that they cheapen the profession. Others think they have their place.

“Don’t get mad – get data,” says Elsie M. Lacher, CPA of Strategic Veterinary Consulting. When you have the data, it is easier to figure out if discounts are achieving their intended purpose, writes Lacher in  “Are Missed Charges & Discounts Hurting the Practice?” in the Veterinary Team Brief, March 2015.

The Science of Pricing

Looking into the future, Jason Canapp, MBA, a veterinary business advisor, points out that pricing will be impacted by the fact that clients have increased access to information and options. The veterinary field will be, like most businesses, market-driven with the Generation Y and Millennials making buying decisions. He thinks that the treatment plan, shopping options, and wellness plans must be in the veterinary future. All of these will require knowing how much things cost.

He further points out that entrepreneurs are seeing private practices ripe for the taking, Consolidation by corporations, such as BluePearl and VetCor, are buying specialty and undervalued practices. To stay afloat, pricing must move from an art to a science.

 

Use Technology

 

The use of technology will also play an important part in future pricing. It will help practices deliver more care, more efficiently, so fees can become less costly, and it will enable practices to compute and analyze costs as well as adjust and update fees more easily.

Knowing your costs is the place to begin, and remember that each practice is unique.

That’s it for today.

Check out our past blogs on this topic or read the entire article in Trends magazine.

 

John and Carolyn

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Pricing Veterinary Pharmaceuticals

Pharmaceuticals and PricingBlog#5DogwBill

In our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outlined the challenge of setting fair and competitive prices. This is our fifth blog on the topic. In previous blogs we’ve described several references, continuing education resources and consultants that can be helpful.

In this blog we address the special challenges when setting prices for pharmaceuticals and other products.

When establishing costs, veterinarians need to take into account the manufacturers’ costs of products and meds, whether they are for in-house use or dispensing. Practices have many sources available to them, such as Patterson Veterinary , Schein Veterinary Supply , MWI, and AAHA Marketlink which offers services for AAHA members through a partnership with MWI. Each can assist with pricing.

How to be fair and competitive when dispensing products is a major challenge for practices that find their clients shopping for their pharmaceuticals and food items online or at discount houses. Some veterinarians refuse to worry, saying their practice is not a dispensary and any income from that stream is just icing on the cake. Others want to offer a convenience to their clients and need to know how to price their items in order to meet their costs.

John Ferrero, the co-owner and Practice Manager at Healthy Paws Animal Hospital in Crystal Lake, IL, said, “When we built our business case for our new animal hospital, we decided we would price according to the market, including online pharmacies. We informed our clients that we price-check against the online pharmacies (every 6 months).”

Nan Boss, DVM, owner of Best Friends Veterinary Center in Grafton, WI, reviews and adjusts her prices with the help of one of her distributor rep who does an annual fee survey of his territory. Also, one of her techs keeps a big spreadsheet for heartworm and flea meds, comparing their prices with on-line pricing.

Many practices have formed a partnership with distributors or third-party venders in order to offer products from a reputable distributor through their own website portal. Pam Stevenson, CVPM, director of Veterinary Results Management directs practices to any of four such sources:

      VetSource (via Patterson Veterinary)

      Vets First Choice (VFC) 

      Henry Schein 

      MWI Veterinary 

When looking for a partner, practices look to see which carry the diet and pharmaceutical items needed for their clients, what sort of advertising they provide, whether or not they are a distributor, and if their software aligns with the practice’s management system.

Ben Spinks, MBA, CVPM, as Hospital Administrator at Tipp City Veterinary Hospital in Tipp City, OH, has arranged a partnership for his hospital with Vets First Choice. He went this direction as a convenience for his clients, but has realized that it also has greatly improved compliance. Because Vets First Choice offers auto ship and reminders, clients are less likely to postpone or avoid the meds they need. It has also proven to be a convenience for his staff. There is less inventory to manage, and they have easy access to information since VFC interacts with their practice management software. As for pricing, VFC takes a percentage, but Spinks finds that the cost is more than made up by the increase in overall sales. He now offers consultations to other practices through Branchworth Consulting.

That’s it for today.

Check out our next blog in which we discuss some of the philosophies and new strategies to consider when you are setting and managing your prices.

Or read the entire article in Trends magazine.

John and Carolyn

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Some Veterinarians Set Prices Using Activity-based Costing

 Some Veterinarians Use Activity-based CostingBlog#4PiggyBank

In our article, in the December issue of Trends Magazine, published by the American Animal Hospital Association, we outlined the dilemma and various resources available to practices to manage pricing. In three previous blogs we’ve outlined the challenge and described several references and continuing education resources that can be helpful.

Some veterinarians have turned to a strategy known as activity-based costing.

Activity-based Costing

Wendy Hauser, DVM and founder of Peak Veterinary Consultin, exclaims that you must know your costs before setting prices. Because each hospital is unique, she believes a study of the hospital’s unique costs is more relevant than looking at what other hospitals charge.

This means that practices must do the hard work of what is known as “activity-based costing – reminiscent of the “time and motion” studies done in the 19th century by Frederick Taylor, who recorded the time required for a given task, and Frank Gilbreth, who analyzed the work process.

Hauser suggests starting by looking at “turnkey” costs. What are the fixed costs of turning the key to enter the practice every day? This means knowing the cost of items such as rent or mortgage, taxes, insurance, and labor. She’ll add in everything except inventory and doctor’s costs. In The Veterinarians’ Guide to Healthy Pet Plans, which Hauser authored with Debbie Boone, BS, CCS, CVPM, she outlines how you can use this data to calculate the cost per minute of a given service, like blood work. This is far more precise than merely taking the blood work panel cost and tripling it, which is what many practices do. The analysis of prices then turns to a focus on a metric called “annual revenue per patient.

Lindsay Peltier, LVT, is the Hospital Administrator at Centerville Animal Hospital in Chesapeake, VA. She is one veterinarian who attempted to determine all of her costs. She says:

“We developed a program in Excel that allowed us to calculate to the penny what a service costs our practice and then to assign a profit margin that allows for growth…. If a client asked for a discount, we typically responded with something along the lines of “Mrs. Client, our prices are based on what it actually costs to provide this service, and the discount you are asking for would put us in a position where we would receive less than the cost to our practice to perform Fluffy’s electrocardiogram. We do, however, have some other options we can discuss.…  When clients ask for a discount, we know that they are venting their frustration…. By knowing the real costs, [our staff members] can speak with confidence. Our program in Excel prepared them for the conversation.”

When Julie Breher, DVM, purchased the La Jolla Veterinary Hospital in La Jolla, CA, she wanted this kind of detailed information, so she hired consultant Terry Roberts, BS, DVM, of LAJ, Inc. to assist her. They began by getting the inventory costs under control. Roberts provided the staff with equations that assisted them in making appropriate updates efficiently. Then they set about analyzing services. Breher and her staff calculated to the minute what procedures cost, taking into consideration all costs, including rent, water bills, salaries and supplies. Sometimes she compared her prices to recommended fees in AAHA’s Fee Reference Guide or published veterinary salaries. With that information she then felt confident in providing a treatment plan with a fair price.

A new service that can assist practices gathering this kind of information is Profit Solver®, based on software developed by Fee Technology. Profit Solver® and Fee Technology work in partnership with Zoetis, which markets this service. They bring technology to activity-based costing.

The Profit Solver® lists about 80-90 different services offered by 90% of practices. The software then enables your clinic to insert your own data. At the end of the analysis, Profit Solver® provides your practice with a Price Adjustment Worksheet and works with your staff in a Price Strategy Session. There they will consider which services are competitive (like your exam fee, vaccines, routine labs, spay, or heartworm prevention) in your practice’s area and which are not.   Some items will admittedly be a loss leader, meant to bring recurring business. The intent is to provide you with information to make better pricing decisions, identify profit leaks, and to know what is profitable and what is not. The outcome is a more accurate and informed list of costs. The practice knows the exact profit or loss in each fee charged and can make informed decisions. Then the practice adjusts its costs with known data. To date they have helped about 1000 (of the 23,000) practices in the U.S.

One of those practices is the Dublin Animal Hospital of Colorado Springs, CO, owned by Marcus Roeder, MBA, CVPM, who also serves as a professional pricing strategist for Profit Solver®. As opposed to across-the-board pricing increases, he finds this activity-based costing method to be more rational. He worked with the Dublin staff for two-to-three months, getting “deep into the weeds,” he said. At times, they found the data overwhelming, but they learned a lot. In the process, he got buy-in from the staff, and now, instead of traditionally emphasizing the cost of inventory, the staff sees that the biggest cost of the practice is its people. Knowing and appreciating what everything really costs, the staff is no longer inclined to want to discount services.

Sacramento Animal Hospital, in Sacramento, CA also has used the services of Profit Solver®. Prior to using the service, the hospital had relied on a straight percentage markup by individual category. After analyzing 74 services, they understood which services were profitable and which were not and where markups were appropriate. They made 21 price adjustments, and realized a new annual profit of $100,362. The hard work was worth it.

External Consultation

Depending on the skills and experience of your internal staff, you may find it useful to go outside for consultation. Boone, BS, CCS, CVPM, of 2ManageVets works with practices using a blend of fees suggested by Benchmarks, The Veterinary Fee Reference and the fee survey from the Veterinary Hospital Managers Association along with overhead and competition. Louise Dunn, of Snowgoose Veterinary Management Consulting, directs practices to discussion boards where sharing among veterinary professionals is encouraged. She also suggests you look at what pet insurance companies pay for reimbursement. This will give you ideas about what is being charged across the country.

Hauser recommends you work with a CPA who specializes in the veterinary industry. Roeder recommends a consultant who is a CVPM. VetPartners.org is a useful place to find a consultant.

That’s all for today.

Check in our next blog for discussion of special circumstances when setting prices for pharmaceuticals.

Or read the entire article in Trends Magazine.

John and Carolyn

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Continuing Education to Help Veterinarians Set Prices

Continuing Education to Help Veterinarians Set PricesBlog#3Puppy

In our article, in the December 2015 issue of Trends Magazine, published by the American Animal Hospital Association, we outline the challenges that veterinary practices face to set fair and competitive prices.  We discuss various resources available to practices to manage pricing. In previous blogs we described several reference materials that can be helpful.

We continue to describe resources – specifically continuing education courses.

In addition to reading books, some veterinarians have turned to continuing education opportunities:

One course that can help practices gain professional pricing skills is the Veterinary Practice Management Program at Purdue University’s College of Veterinary Medicine.  It’s a graduate-level “mini-MBA” type program, offered in West Lafayette, IN in three days (Friday-Saturday-Sunday). Its four modules, one of which covers pricing and financial management, lead to a Veterinary Practice Management Program Certificate.

AAHA offers the Veterinary Management Institute, in collaboration with the College of Business at Colorado State University.  Courses are offered during three in-person sessions (spring, summer and fall) and online sessions between the in-person sessions. While the program covers a multitude of veterinary leadership issues, one important module is related to financial management.

For those looking for an exclusively online learning opportunity, Joel Parker, DVM, who owns Veterinary Practice Solutions, offers a two-day workshop delivered in webinar format entitled “Online Practice Profit Builder Workshop.”Participants gain tips and tools to locate where they are losing profit and what to do to fix it.

James. F. Wilson, DVM, JD, offers concrete pricing advice through his course, “The Principles of Cost Accounting and Establishing a Realistic Fee Schedule.” Of course, you can’t list every component of a service’s cost on the invoice, he says, but the ancillary and overhead costs must be recovered. You must know what those costs are. Too often, he says, a surgery charge covers only the doctor’s time. Forgotten is the pre-anesthetic drug, the monitoring, the IV catheter, the fluid, the operating room expense, surgical packs, gown, mask and towels, suture material, recovery care, and on and on.

We trust this information is helpful.

That’s all for today.

Check in on our next blog where we will outline the strategy of “activity-based costing” and how it can help you set and manage your prices.

John and Carolyn

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