Why a loyalty program is not a discount program


One of the common objections veterinary practices seem to have about implementing loyalty programs is that they don’t like to discount their services. But here’s the thing: a loyalty program is not a discount program. In fact, if you are strategic about your program, you will actually prevent discounting.

And if that’s not a good enough reason for you to consider a loyalty program, consider this.

Two things you have probably never heard your clients say while visiting your practice but are sure to hear once you launch a loyalty program:

1. “What else can I buy?”
2. “No, don’t give me a discount.”

And that’s not a word of a lie! At the practice I managed in Colorado, we implemented a standard program that rewarded clients with a loyalty stamp for every $100 they spent per invoice. (You can read more about this loyalty program in my November 2 post.) This program was so effective that, believe it or not, I once had a client decline a discount the doctor offered her because she wanted her invoice to be higher so that she could get her loyalty stamps!

Why are loyalty programs better than discount programs?

Imagine you have a client sitting in an exam room waiting to be seen. The doctor is running extremely late because of a sudden emergency. Finally, he is able to see the patient. Compare these two scenarios.

Scenario 1: Offer a discount

Scenario 1: You offer the client a discount

The doctor feels bad about the long wait. To acknowledge the client’s patience, he offers to comp a vaccination worth $27.

It sounds good, but is it? With a wellness exam, two vaccinations, a heartworm test and a box of parasite prevention, this client was on track to spend about $220, which would have earned her two stamps on her loyalty card (one for each $100 spent). By comping the vaccination, however, her invoice has dropped to $192, so she only earns one stamp. In other words, you have just made it harder for your client to accumulate loyalty rewards.

Key take-home points:

  • This $27 discount has a fairly heavy impact on your revenue.
  • Your willingness to offer this discount suggests that the service you offered her isn’t terribly valuable; in other words, you devalue your service.
  • Your client, a loyalty program member who was gearing up to receive two stamps today, leaves with only one stamp; what a let down!

Scenario 2: Offer a loyalty reward

Scenario 2: You offer your client loyalty rewards

The doctor feels bad about the long wait. To acknowledge the client’s patience, he gives her an extra loyalty stamp. No discount is offered.

The client, who was on track to spend $220 based on the items mentioned above still gets to spend $220. What’s more, instead of leaving your practice with two stamps on her loyalty card, she leaves with three!

Key take-home points:

Loyalty programs aren’t expensive to run

While yes, there is a slight cost to running a loyalty program, it is small in comparison to the discount offered in scenario 1 above. With the loyalty program we implemented for our clients, every loyalty stamp given costs the practice just $6.25. Compare this with a $27 discount and it means you save your practice more than $20 in addition to elevating your client’s sense of satisfaction. It’s a win-win.

In my final post about loyalty programs, I will be sharing some additional ideas about ways you can take your loyalty program to a new level with earning sprints and seasonal promotions. This is a great way to further engage your clients and customize your program to increase revenue in specific focus areas where you would like to see improvement.

VetSuccess' POR helps you assess your practice to help gain more positive online reviews The question isn’t if but rather when. Look to your VetSuccess Practice Overview to see if discounted revenue is an issue in your practice. If it is, I suggest focusing on it sooner versus later so that you can give your doctors free reign to offer loyalty stamps instead of discounting their services. You’ll need to set some guidelines, of course. But once you do, you will find that your bottom line will be in much better shape. Plus, your clients will be happy that a minor inconvenience actually resulted in a more rewarding visit to your practice!