How do I talk to the practice owner about not giving discounts?

Talking about why discounts hurt the practice’s finances may not get you very far

A veterinary practice manager writes:

I have 6 years experience as a practice manager, and 3 months ago I took on a new PM role in a two-doctor practice. I noticed a pattern of the practice owner discounting a lot of his consultations and surgeries, and I would like to talk to him about it. I’m not sure how to approach it, however.  

I mentioned it once in my first month, and he laughed it off, so I don’t think he sees it as an issue. What would be the most effective way for me to broach the subject?

It sounds like you’ll need to help him understand the negative consequences of discounting. And I mean, really understand — for the behavior to change, the owner needs to buy your reasoning, not just hear you say “discounting is bad.” So put aside an hour for this conversation!

There are four key things I believe make discounting really detrimental to the smooth running of the practice. And none of them have anything to do with the bottom line. My advice would be not to make the financial implications of discounting the focus of your discussion. As a business owner, he’ll agree with everything you’re saying at the time, but when he’s in the consultation room in front of a patient and a client, he’s a veterinarian and the financial reasons go out the window.

1. Discounting hurts other vets in the practice.

This is the side effect of discounting that the owner is probably not aware of, but practice managers and receptionists witness this all the time.

Clients ask to see only the vet who discounts. They probably won’t say that’s the reason for their preference, they may not even realize that’s why they are doing it. All they know is that when they see Dr. Smith, they walk out happier than they do when they see Dr. White.

Maybe they realize that Dr. White charges them for a revisit, while Dr. Smith doesn’t. Maybe Dr. White charges them for cytology on top of the consultation fee, while Dr. Smith only charges the consultation fee … and so on.

In the long term, if the practice owner is thinking about succession planning, or wants to reduce his hours, ‘training’ clients to only ask for him is not helping him achieve that.

2. Discounting hurts customer service representatives.

You know that moment when Mrs. Holmes walks out of the consultation room with Fluffy, you hand her the bill and she says “But Dr. Smith didn’t charge me for the revisit last time!” What does the CSR do? They only have two options: explain that Dr. Smith should have charged the revisit fee and be firm with the current invoice; or remove the revisit fee this time as well … and next time, and the time after that.

3. Discounting hurts clients.

Continuing on from the example above, awkward situations like this can be resolved by a skilled and patient CSR, but they always leave a sour taste in the client’s mouth.

4. Discounting doesn’t make clients happy.

Stick with me here, it’s not the same as discounting ‘hurting’ clients!
 Ask the practice owner or any veterinarian, “Did Mrs. Holmes hug you and thank you when you left the cytology charge off the invoice?” I can guarantee the answer is, “No.”

Vets think that discounting is doing the client a favor. There are two problems with this; firstly, they are prejudging the client and assuming that they can’t or won’t pay. Don’t prejudge. But that’s a whole other topic in itself. Secondly, most of the time clients do not know that you are giving them a discount!
 If you ever do discount, please at least tell the client what you have done, why and that it’s a one-off thing.

To answer your question, you need to find a reason not to discount that will resonate with the practice owner. In my experience, financial losses as a result of discounting are rarely a good enough reason for a veterinarian to buy into the idea of not discounting.

There are some practical things you can do as well:

  • Have a written discounting policy. There are groups of clients you probably do want to 
offer discounts too, such as those with guide dogs, military, police dogs, senior citizens, 
  • Have a CSR check every invoice and follow up with the veterinarian about missed 
charges. For example “Dr. Smith, I noticed you did cytology in Fluffy’s consult. I’m going 
to go ahead and put that on Fluffy’s invoice.”
  • Run a monthly report showing discounts that have been given. Discounts are not the 
same as missed charges, so remember that anything that isn’t a line item on the invoice won’t show up on your report. Go through the report with the owner in a monthly meeting.

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