Mar 13, 2017 by Edward L. Blach, DVM, MS, MBA
Is your veterinary practice positioned as a commodity? Are the services you provide easily replaced by any other practice? Do you compete primarily on price to earn your customers?
If you answered 'yes' to these questions, your service is positioned as a commodity. Your service is similar to unbranded, generic grain, hay, or bulk oil. You price it and position your services as the cheapest available, and you essentially are at the will of the market regarding what you receive for your services.
This situation describes markets such as that which many farmers compete in. They produce grain, or crops, and sell them to an elevator or feedlot for a 'going rate' determined by the 'market'. I always wondered, 'who is the market'? And how do they know what grain is worth? Essentially, the market is what people in your area are willing to pay.
The question isn't always what people are willing to pay. The question should be 'what do people think they are paying for?' Everybody has preferences and varying opinions of what matters to them. Some focus on quality. Others focus on expertise or the science that backs a product or service. Others want value, and their views on value can vary greatly.
In service businesses like veterinary medicine, many customers yearn to be treated with a certain level of care, compassion, and concern. They value the experience, and are not very adept at discerning differences in the quality of the medicine being delivered. The most successful practices identify their best customers' most valued criteria for selecting a service provider, and they build their relationship based upon those traits. Rarely is price the most important feature for deciding to select a specific veterinarian or clinic for service. In reality, price is typically in the lower quartile of factors most important to clients in making a veterinary decision. However, to earn the privilege to get some clients in the door, you must be competitive on price on some commodity services and products.
To decommoditize your services, define what your clients value. Focus your message and experience in serving them on those important criteria. This is the art of differentiation. Differentiate your practice. Avoid being a commodity.