Staying Afloat in a Tsunami of Consolidation: Only the Strong Survive
Reading Time: 4 minutesBy Linda Kaplan, MHA & Robin Brogdon, MA
UPDATED: January 12, 2017
Last year, we published the article below in response to the growing trend of industry consolidation. We received a tremendous amount of feedback on the topic – mostly from owners and practice managers who were committed to remaining independent, and not becoming another statistic in the homogenization of veterinary care.
Fast forward to January 9, 2017….we awoke to the news that Mars, Inc., had purchased VCA in a $9.1 billion deal, or $93/share (a 31% premium over the price just two days earlier). This means that Mars PetCare now owns Banfield, BluePearl, VCA, CAPNA, AVC (Canada), Wisdom Panel (DNA testing), and many pet food products, totaling more than 40 brands worldwide.
Is this a game changer for practices here in the US? Not necessarily. In fact, we are believers that “When you can’t change the direction of the wind – adjust your sails.”
As industry consolidation continues, we see only the strong independents surviving. And by strong, we mean those that are committed to consistently providing an exceptional experience for their clients, referring veterinians, and team members. Those that are dedicated to employing best businesses practices will – if they choose – be able to remain independent and a leader in their community. If that is your desire, now is not the time to become complacent.
Please do not hesitate to contact us if you have any questions or if we may be of service to help you thrive in the years ahead.
Staying Afloat in a Tsunami of Consolidation: Only the Strong Survive
Over the past few years we have been witnessing the growing trend of animal hospital consolidation occur across the country. More and more frequently, primary care and specialty practices are receiving the proverbial call from some “corporate” entity – whether as large as VCA or as small as the latest entry into the veterinary consolidation space, wanting to know if they are interested in partnering or being acquired. Some do. Most don’t. And many don’t know what to do but they certainly are feeling the pressure of the changes in the industry.
It’s understandable. The business of running a veterinary hospital has never been more difficult or complex. The factors pushing practices toward consolidation include those that apply to most industries – such as the ability to generate economies of scale and purchasing power while providing exceptional service. Additionally, with the growth of the number of veterinary practices, veterinary schools, and available veterinarians outpacing the growth of pet ownership, it is anticipated that consolidation will continue for the foreseeable future.
For those of you who would like to evaluate whether an acquisition is the best exit or business strategy for your practice, seeking the help of experts is a good place to start. Leading merger/acquisition consultants such as Simmons, Inc., or a CPA/valuation specialist are worth speaking with.
For those of you who prefer not to be acquired [yet or ever], and want to thrive instead of just survive, then please keep reading…
…As a full service animal health marketing and consulting firm, we have a wealth of experience helping specialty and referral practices create successful strategies for growth in booming as well as uncertain times. The core of our work is developing, nurturing, and promoting each practice as a unique and special entity or “brand” within its marketplace. If you look, sound, and communicate like everyone else, then chances are, you will not succeed, or reach your true potential.
Even if your referral practice is well established, you can’t be complacent if you are going to successfully compete against the corporate giants and the changing landscape. You must take time out from the daily challenges of medical care and evaluate your practice – as a business entity. Practices that remain on auto-pilot are the ones that can ultimately fail. Those that tend to their culture, brand, reputation, etc., are the ones that stay afloat and create the opportunity to sail into the sunset successfully.
What does that mean exactly? The most successful companies have a very clear sense of who they are, how they wish to be perceived, and build strategies to specifically achieve these core tenets.
Ask yourself, when was the last time you…
Reconnected with your core purpose?
- Why are you in business?
- What do you stand for?
- How does your purpose display itself every day?
Evaluated your uniqueness?
- How do you differentiate your practice from your competition?
- What do you offer/do better than any other practice in town?
- How welcoming/modern/special is the décor of your practice?
- How engaged is your staff?
Assessed your current position in marketplace?
- How are you really doing?
- Have you surveyed your audiences?
- What is your current reputation?
- Do you monitor your online reputation?
- How does your practice compare to the competition (service, pricing, staffing, appearance, etc.)
Redefined your goals and objectives?
- Is your practice on auto-pilot or are you stretching to reach new heights with a defined plan, timeline, and accountability measures?
Evaluated your marketing initiatives?
- Are you regularly communicating with your rDVMs and/or clients?
- Are your marketing materials consistent in terms of quality, messaging, and accuracy?
- Do your marketing materials speak to your audiences in a manner that will resonate with them?
- Are your marketing initiatives tied to specific goals and objectives?
- Do you compare/measure your marketing efforts against referral reports?
- Have you adjusted your strategies based on outcomes of your efforts?
- Does everyone on your staff understand and embrace the answers to these questions and communicate these messages in the same way?
Most practices have a mission statement and core values. But few “use” them to drive their business. If you can honestly say you have integrated the above list of strategies and tactics into your daily operation to achieve your mission, you will thrive. If you need help in the development and execution, that’s where BluePrints can help. The companion animals are counting on you.
If you would like to have a complimentary, confidential conversation about how your practice can thrive during these uncertain times, please don’t hesitate to contact Robin Brogdon, MA or Linda Kaplan, MHA , at 949.756.8071 (PST).