Face your fees head-on: Figure out what's changed, what hasn't, and what should (sponsored by Intervet/Schering-Plough Animal Health)
When it comes to evaluating fees, these are times that try the souls of most equine practitioners. With the economy still showing only glimmers of recovery, you may be wondering if you should lower fees to keep clients, raise them to meet inflation, or stand pat.
Aside from those basic factors, Dr. Felsted offers some guidelines that can help you evaluate your fee structure—deciding what should change and what should not. "I'm not crazy about lowering fees because it appears that you're devaluing services," Dr. Felsted says. "Then how do you justify raising them again when times are good?"However, Dr. Felsted says, lowering fees may be appropriate in some situations—for instance, if your clients have been hit hard by the recession and you're facing intense price competition from nearby practices. But if you're considering a decrease, be sure to perform a cost-benefit analysis of how it will help your business, then alert horse owners to the change. "It has to be an amount clients will notice, and you have to let them know you're doing it—otherwise what's the point?" Dr. Felsted says.
One practice that has done this is Rood & Riddle Equine Hospital in Lexington, Ky., which lowered fees by 3 percent to 4 percent and sent a letter to all of its clients announcing the change. Another option is to lower fees on competitive, routine care to keep clients coming in. "But even then you want to announce it," Dr. Felsted says. "Your letter could say something like, 'We know everyone is hard-hit with the recession and we want to do our part to make sure your horse still gets the care it needs.'"
On the flip side, rising production costs might cause some equine practices to consider raising fees. Is that a good idea? Not in every case. "There may be other things you can do, like cutting expenses and being more productive," Dr. Felsted says.
Holding the line
Three practitioners we talked to have done just that. Once they fully recognized the seriousness of the recession, all of them decided to hold the line on fees and instead try to add value that clients would perceive. "We've maintained our fees, but we try to be more accommodating to clients," says Dr. Steve Hicks, a solo practitioner and owner of Cedarcrest Farm & Equine Clinic in Palestine, Texas. "I give more of my time and give back to clients on some of the simple things."
Dr. Hicks, who's a past president of the Texas Thoroughbred Association, says he's well-positioned to ride out the recession without raising fees because of his solo status and the fact that his farm and most of his equipment are paid for. "My situation is different from many others'," he says. "I can't speak for those with two associates and some technicians on staff. Yes, our business has been down perhaps 25 percent, but I still see horses every day. Maintaining my fees seems to have been the right thing to do."