2021 VETERINARY INDUSTRY BENCHMARK REPORT - DATA STORIES - iVET360
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2021
VETERINARY INDUSTRY
BENCHMARK REPORT
/ DATA STORIES2021 VETERINARY INDUSTRY BENCHMARK REPORT TABLE OF CONTENTS
1 INTRODUCTION
2-7 REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
8-10 REVENUE MIX
11-13 FINANCIALS
14-15 STAFFING
16 REGIONAL BREAKDOWN
17-18 WRAPPING UP
/ DATA STORIES2021 VETERINARY INDUSTRY BENCHMARK REPORT
The story of this exceptional year will be told in a myriad of
ways by a million different voices. This report is iVET360’s
attempt to tell one side of the story – that of the financial and
behavioral trends that dominated the veterinary industry during
The Story of the Vet a period of dramatic change.
Industry in 2020: By By utilizing both big-picture and granular data on everything
from year-over-year revenue and expenses to Average
the Numbers Transaction Charges and new client spending habits and
retention, this document details the impact of 2020 on
practices both big and small. It also breaks down high-level
It will come as no surprise to you that financial data by region and offers nuanced analysis for what
those numbers mean and the society-level changes they
2020 was a unique year in the practice
reflect.
of veterinary medicine. The coronavirus
pandemic forced hospitals to by turns lock Raw industry data is obviously just a small piece of the
down, mask up, and, for much of the year puzzle. When experts in the field harness and interpret
anyway, move their operations curbside. such data in the context of larger cultural trends,
veterinary practices and, by extension, their human
clients and pet patients, all benefit.
Our hope is this user-friendly report will allow you not
only to compare your hospital’s performance to those of
like size and scope and but, more importantly, plan for
the future – no matter what that future brings.
/ DATA STORIES2021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
The Big Picture: AVERAGE REVENUE GROWTH
Revenue, New Clients, 2019 2020
and Transactions OVERALL 6.8% 8.8%
The primary narrative in the veterinary industry
in 2020 was one of significant growth. Most WEST 9.7% 10%
practices, despite early spring lockdowns and NORTHEAST 4.0% 6.6%
stay-at-home orders, experienced sizeable
increases in revenue from 2019 to 2020 – an 8.8% MIDWEST 6.0% 5.3%
jump overall. SOUTHEAST 6.2% 11.1%
New clients made up 4% of those revenue SOUTHWEST 6.9% 8.6%
increases, spending, on average, 6% more than
the previous year. indicates >1% below average
/ DATA STORIES 22021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
MONTH OVER MONTH CHANGE (2019-2020)
REVENUE TRANSACTIONS AVERAGE TRANSACTION CHARGE (ATC) NEW CLIENTS
/ DATA STORIES 32021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
New Client Spending Data % OF TOTAL REVENUE FROM NEW CLIENTS
What explains these upswings? The pandemic puppy and COVID
kitten boom helped fuel the trend, at least in part. Families and
individuals, in an effort to brighten up long days in quarantine,
adopted pets at an unprecedented rate. Shelters all over the
country reported empty kennels for the first time and practices 23.7% 24.7%
whose staffing levels could accommodate the influx saw a
corresponding uptick in revenue and new client expenditure. 2019 2020
4% YOY CHANGE
AVERAGE NEW CLIENT SPEND
$599 $635
2019 6% YOY CHANGE 2020
/ DATA STORIES 42021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
Spending More, Less Often
The transactional data tell a more complicated tale. Between close for a few days, and these constrictions led to a downturn
2018 and 2019, the driving force behind revenue growth was an in transactions as well. What’s striking here is the year-over-
increase in transactions, combined with an increase in Average year change in ATC from 2019 to 2020. While ATC rose slightly in
Transaction Charge (ATC). ATC refers to the average amount the previous fiscal year, it spiked in 2020, up more than 7.8%.
of money a client pays per visit to a hospital. But, between
2019 and 2020, transactions were up only 1.1%, where the
year prior they were up 3.5%. Given that many practices In other words, clients, whether new or established,
were forced to all but halt operations in March and April, it’s visited clinics less often but spent more money there
not terribly shocking that the number of transactions would, in when they did.
general, fall dramatically.
The switch to curbside service also played a role. Curbside There are several factors to consider when accounting for
appointments take roughly 10 minutes longer to complete than what might seem at first glance to be contradictory data sets.
conventional, in-office visits, thereby cutting into the number of One such factor is that the curbside service model ushered in
patients hospitals can see in one day. And then, of course, there a new era of clients more willing to accept their veterinarians’
was the issue of staffing. Many hospitals faced shortages when recommendations for services. Pet parents presented with
team members fell ill or had to take care of someone who was treatment plans over the phone were less likely to suspect that a
sick, forcing them to reduce their hours of operation or even doctor was prescribing to the wallet rather than the patient.
/ DATA STORIES 52021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
TRANSACTIONS YEAR-OVER-YEAR NEW CLIENTS YEAR-OVER-YEAR
2019 2020 2019 2020
OVERALL 3.5% 1.1% OVERALL -11.7% 6.1%
WEST 6.1% 1.0% WEST -9.6% 0.3%
NORTHEAST 0.8% -0.6% NORTHEAST -16.8% 10.2%
MIDWEST 3.0% -0.7% MIDWEST -14.9% 3.6%
SOUTHEAST 3.4% 3.1% SOUTHEAST -9.0% 8.9%
SOUTHWEST 2.9% 1.8% SOUTHWEST -10.6% 8.7%
indicates below average indicates below average
/ DATA STORIES 62021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
ATC Growth Factors
ATC CHANGE YEAR-OVER-YEAR
There’s also the fact that many clients didn’t want to risk a
repeat visit for fear of contracting COVID-19 and therefore 2019 2020
stocked up on everything their pet needed for the year rather
than putting off purchases for a later date. The same could be
said of clients who either had to delay vet visits because of OVERALL 3.5% 7.8%
illness or had a hard time securing an appointment for their
pet because their preferred hospital was dealing with staff WEST 3.8% 9.1%
shortages or high demand or both. Such pet owners were highly
motivated to check all their pet’s care boxes when they had the NORTHEAST 3.3% 7.5%
chance, further boosting ATCs.
MIDWEST 3.1% 6.3%
Another key component in 2020 ATC growth was the high level
of adoptions. Pet parents tend to spend a great deal more on SOUTHEAST 3.3% 8.3%
new pets in their first year of life than they do as their animal
companions age and even adult and senior adoptees require SOUTHWEST 4.2% 6.9%
more services, diagnostics, and exams to ensure good health
than do their counterparts who’ve been the beneficiaries of indicates below average
regular veterinary care.
/ DATA STORIES 72021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE, NEW CLIENTS, TRANSACTIONS, ATC
AVERAGE TRANSACTION CHARGE (ATC) GROWTH CHART
REGIONS 2018 2019 2020
WEST $250 $242
$207 | $216 | $242
$201
SOUTHWEST $200 $201
$175 | $184 | $201
$164
NORTHEAST $150 $147
$176 | $182 | $201
SOUTHEAST $100
$147 | $151 | $164
Despite the undeniable challenges presented by the need to adopt COVID-19 safety protocols
MIDWEST and the disruptions to traditional modes of care, the veterinary industry thrived in 2020.
Transactions declined on the whole but surging Average Transaction Charges and a wave of
$134 | $138 | $147
new adoptions – and hence new clients – brought across-the-board revenue growth.
/ DATA STORIES 82021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE MIX
At Your Service: % OF TOTAL REVENUE: BOARD & GROOM
The Revenue Mix in 2020
Given all that changed in 2020, it follows that many practices saw 5%
their main sources of revenue shift as well. In the past, boarding
and grooming were predictable money-makers, primarily due
4%
their high-profit margin.
In 2018 and 2019, for instance, boarding and grooming 3%
revenues accounted for 2.8% and 2.7% of total hospital revenue
respectively. However, in a year governed by lockdowns and
stringent travel restrictions, revenue from boarding and 2%
grooming was nearly halved, plummeting to 1.6%, cutting into 1.6%
many hospitals’ bottom lines. However, boarding and grooming
1%
were not outliers. Most practices saw albeit smaller drops in
client spending on exams and professional services, anesthesia,
dentistry, and nutritional and pharmaceutical products. 0
2018 2019 2020
/ DATA STORIES 92021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE MIX
2018-2020 CONSOLIDATED REVENUE MIX
MIX GROUP 2018 2019 YOY 2020 YOY 2020 KEY METRIC
EXAM | PROF SERV | HOSP 39.7% 39.9% 0.2% 39.6% -0.3%
28.0%
LAB | IMAGING | DIAGNOSTICS 25.1% 26.4% 1.3% 28.0% 1.7% LAB | IMAGING | DIAGNOSTICS
PHARM | DIET | ANCILLARY 18.6% 17.9% -0.7% 17.7% -0.1%
SX | ANESTHESIA | DENTISTRY 14.2% 13.5% -0.7% 13.4% -0.1%
BOARD | GROOM 2.8% 2.7% -0.1% 1.6% -1.1%
DISCOUNTS -0.4% -0.3% 0.1% -0.3% 0.0% *Numbers shown are percentages of Total Revenue (100%)
Making up for losses was a sharp increase in revenue from diagnostics, imaging, and lab testing.
This area saw a corresponding jump of 1.7%. What could account for an uptick in cash outlay on
diagnostics in 2020? The answer is most likely three-fold.
/ DATA STORIES 102021 VETERINARY INDUSTRY BENCHMARK REPORT REVENUE MIX
The Uptick in Diagnostics
First, pet parents, newly stuck in their houses with their best This ties back into the ATC spike we mentioned before and the
friends for days and weeks at a time, were more likely to greater willingness on the part of pet parents who, prior to the
notice small changes in their pet’s behavior and habits and pandemic, might have been hesitant to follow their doctor’s
to seek solutions to such problems than were owners who, advice and approve an expensive diagnostic test.
prior to the pandemic, spent the bulk of their days working
outside the home. Such solutions are often arrived at through
diagnostics, such as blood tests, ultrasounds, and X-rays.
THE KEY TAKE-AWAY
Another factor was the increase in adoptions. Exams of
puppies, kittens, and pets fresh from the shelter or a rescue While it’s very possible that boarding and grooming
group obviously include lab screenings and bloodwork, profits might not bounce back until sometime in
contributing to the overall increase. 2022, the good news is that revenue still outstripped
those losses, and the high-profit margin field of
Finally, clients who in a more typical year might shell out diagnostics continues to trend upward, a key
expendable income on travel, restaurants, and other forms of indicator in the health of a veterinary practice and
entertainment, found themselves with more money to spend its long-term potential for growth.
on their pets.
/ DATA STORIES 112021 VETERINARY INDUSTRY BENCHMARK REPORT FINANCIALS
Zooming in Cost of Goods, YEAR-OVER-YEAR ($ CHANGE)
Labor Expenses, & 25%
Profitability
20%
While the past year was in many ways rife with volatility, 21.6%
some key performance indicators remained relatively
stable, including cost of goods (COGs) and labor and 15%
fixed expenses. These areas of relative calm led to
a marked increase in profitability for the majority of 10%
hospitals, regardless of practice size.
Good news, right, 5%
but how did we get there? ‘19 ‘20 ‘19 ‘20 ‘19 ‘20 ‘19 ‘20
0
COGs LABOR OPEX other EBITDA
/ DATA STORIES 122021 VETERINARY INDUSTRY BENCHMARK REPORT FINANCIALS
2018-2020 FINANCIAL DATA
YoY WEIGHTED YoY WEIGHTED
DATA YEAR 2018 2019 ($ CHANGE) DELTA 2020 ($ CHANGE) DELTA
COST OF GOODS 25.3% 25.1% 9.1% -0.2% 25.0% 9.1% -0.1%
GROSS PROFIT 74.7% 74.9% 10.2% 0.2% 75.0% 10.0% 0.1%
OPERATING EXPENSES 60.4% 60.5% 10.2% 0.2% 59.1% 7.2% -1.4%
Total Labor Expense 38.4% 38.6% 10.5% 0.2% 38.4% 9.2% -0.2%
Total Employer Payroll Taxes 3.2% 3.2% 10.4% 0.0% 2.9% 0.6% -0.3%
Total Employee Fringe Benefits 3.7% 3.7% 9.6% 0.0% 3.5% 2.4% -0.2%
Total Other Employee Expenses 0.4% 0.4% 10.9% 0.0% 0.4% 24.1% 0.0%
Total Facility Related Expenses 8.6% 8.5% 9.2% -0.1% 8.0% 2.7% -0.5%
Total Administrative Expense 3.2% 3.1% 8.2% -0.1% 2.9% 2.3% -0.2%
Total Advertising & Promotion Expense 1.0% 1.0% 11.7% 0.0% 0.9% -5.4% -0.1%
Total Fee Income Collection Expense 2.0% 2.0% 11.5% 0.0% 2.2% 17.2% 0.1%
EBITDA 14.3% 14.4% 10.3% -0.0% 15.9% 21.6% 1.6%
/ DATA STORIES 132021 VETERINARY INDUSTRY BENCHMARK REPORT FINANCIALS
Let’s begin with COGs
This category has remained stable at 25% of revenue over the Likewise stable were fixed expenses, i.e. the amount of
sampled three-year period. In general, our analysts tend to see revenue practices spent on things like rent and administrative
a correlation – not always causal – between high ATC rates and supplies, with both hovering around 8% to 11% and 3% to 4%
low COGs, but the relationship depends at least partially on why respectively, depending on the size of the practice.
the ATC rates are rising. In the case of 2020, ATCs rose because
clients were bringing pets in for more expensive care. Sick visits With COGs and fixed expenses remaining stable, it was up to
that included at least some diagnostic testing and imaging were the remaining piece of the profitability puzzle – namely labor
the norm rather than the exception. That shift tended to drive expenses – to bring down overall gains.
down COGs, which, in a more typical year, might have gone up
given the plummeting expenditures on high-profit services like A quick note on a big shift: total fee income expenses jumped
boarding and grooming. 17.2% in 2020 as a direct result of practices making the switch
to curbside service. Credit card companies began charging
higher transaction fees in April 2020 because the likelihood of
But 2020 was anything but typical, and it appears fraud goes up when payments are processed over the phone
that the drastic drop in boarding and grooming was as opposed to in-person and they passed that expense onto
enough to offset the spike in ATCs. merchants. This change isn’t likely to go away even as progress
is made in fighting the pandemic, so hospitals and clinics will
want to plan accordingly.
/ DATA STORIES 142021 VETERINARY INDUSTRY BENCHMARK REPORT STAFFING
A Labor of Love: Staffing
Challenges & Skyrocketing
Demand
Because of the 2020 adoption explosion, veterinary hospitals
all over the U.S. were inundated with new clients and patients.
This trend, when paired with the boom-and-bust rhythm of
regional lockdowns and the lifting of those lockdowns, led to an
unprecedented demand for services, which in turn resulted in
a fair amount of burnout and compassion fatigue among staff,
technicians, and doctors. And even before the pandemic hit,
most independent practices were facing technician and DVM
shortages thanks in part to corporate poaching.
/ DATA STORIES 152021 VETERINARY INDUSTRY BENCHMARK REPORT STAFFING
This supercharged atmosphere led to an across-the-industry The much sought-after Paycheck Protection Program loans also
jump in hourly pay and salary at all position levels. Team acted as a pressure release. Many hospitals that benefited from
members who weren’t happy with their pay rate – or perhaps such loans, motivated to use up the funds by summer 2020 and
with how their practice was handling the COVID crisis – found therefore have their loans forgiven, often used the extra cash-
it easier than ever to move on to a different hospital or clinic on-hand to reward employees with bonuses or pay increases.
where the compensation and culture were more to their liking.
And they often received healthy bonuses for doing so.
THE KEY TAKE-AWAY
You might assume that this environment would create a
commensurate leap in labor costs, not to mention a hiring Labor costs remained stable even in the face of high
frenzy, but the afore-mentioned shortages made new hires hard demand, and, at times, low morale. Speaking of low
to come by and several factors worked to keep this expense morale, iVET360’s human resources team observed
in the stable column. One such factor was the Families First an interesting phenomenon at work in 2020. When
Coronavirus Response Act, passed by Congress in March of 2020, practice owners and managers made a habit of
which required employers with fewer than 500 employees to regularly checking in with their teams and prioritizing
offer their workers two weeks paid emergency sick leave in the staff mental and physical health, those hospitals
event they would need to quarantine after a COVID exposure. prospered and largely held on to experienced workers.
As part of the program, the government matched employer When such things were ignored, turnover was high and
contributions dollar-for-dollar, so most practices, flush with clinic reputations sustained lasting damage, making it
revenue from new clients and high demand, were, on average, difficult for them to replenish staffing levels.
not adversely affected by the new law.
/ DATA STORIES 162021 VETERINARY INDUSTRY BENCHMARK REPORT REGIONAL BREAKDOWN
Breaking It Down,
The transaction growth in the southeast resulted in an obvious
jump in revenue. What’s notable, however, is that even hospitals
Region-by-Region in regions where coronavirus restrictions were more severe
also saw revenue and ATC gains, with the west experiencing a
10% jump in revenue and a 9.1% increase in ATC. The northeast,
For the first year of the COVID-19 pandemic, the United States meanwhile, saw striking new client growth. The latter can
took a somewhat fractured approach to public health safety perhaps be explained by the lifting of lockdowns after the
measures. States and local jurisdictions had a great deal of devastating first wave of the pandemic had passed. New pet
freedom with which to fashion their own responses to the crisis, parents flocked to newly opened hospitals and kept flocking.
and, for the most part, the veterinary industry followed suit,
reacting with disparate levels of caution and concern. This led
to corresponding fluctuations in key performance indicators. THE KEY TAKE-AWAY
For instance, the consolidated transaction rate was down, but It might seem at first glance that practices operating
in the southeast, where lockdown measures were, in general, in states where public safety measures were most lax
more lenient than the rest of the country, transactions actually would have the most to show for themselves, and while
increased from 2019 to 2020 by 3.1%. In the northeast, hard- southeast hospitals did have a very good fiscal year,
hit by the pandemic in the spring and quick to adopt stringent those in regions where lockdowns and stay-at-home
safety protocols, transactions fell by .6%. We saw the same orders were more common also saw record revenues
trend in the west, southwest, and Midwest. and ATC and new client growth.
/ DATA STORIES 172021 VETERINARY INDUSTRY BENCHMARK REPORT
Adaptability is another key factor in success. In order to be
adaptable, you have to have a clear and comprehensive picture
of how well your practice is performing. That’s where positive
change begins. It’s also where iVET360’s analytics service
comes in. Armed with real-time, deep-diving data courtesy of
So That Happened. the Pulse platform and informed by years of experience in the
veterinary industry, we help practices like yours compete in
What Now? an increasingly corporate marketplace. We also give practice
owners the tools they need to weather the kind of storms we
saw in 2020.
One of the main lessons living in the big-
picture and granular 2020 industry data The ripples of the COVID-19 crisis will most likely continue to
culled and put into careful context here by influence operational and consumption patterns for some
time to come, even as most states loosen their public health
iVET360’s analytics team is that, in periods
restrictions and hospitals and clinics begin welcoming
of upheaval and uncertainty, financial clients back into their buildings again. What remains to be
stability and healthy growth often depend seen is whether the current shifts in spending, revenue,
on preparedness, resilience, and the help of labor, expenses, and new client growth persist or if, with
supporting partners who share your vision a gradual return to normal, whole other trends appear.
What we know for sure is that iVET360 clients are well-
for the future of your practice. positioned for whatever challenges lie ahead.
According to our data sets, our comprehensive Base
Plus clients saw an overall jump in 2020 revenue of
12.2% as compared to the national average of 8.4%
/ DATA STORIES2021 VETERINARY INDUSTRY BENCHMARK REPORT
– representing a roughly $5 million increase in profits
– and a leap in new client growth of 10.2%, whereas
nonclient practices experienced a 5.6% rise. Even
transactions – that tricky data point – rose among our
clients, perhaps due in part to the fact that, thanks to the
support and comprehensive picture of practice health
and marketplace trends they get from our analytics,
marketing, and human resources teams, they were able
to anticipate and prepare for COVID-19-related shifts
and therefore accept new clients while other competing
practices became overwhelmed and could not keep up
with demand.
If you think your hospital could benefit from the kind
of painstaking data and rigorous analysis laid out here,
now would be a good time to reach out. We’re currently
offering three months of Pulse access absolutely free
to any veterinary practice owner who wants it. You’re under
no obligation to renew and there are no strings attached. We
simply want to share with you what we know so that you can
put such knowledge to work for your hospital, team, patients,
and clientele.
GET 3 MONTHS FREE
503-765-6360 / INFO@iVET360.COM / iVET360.COMYou can also read
