You Lucky Dog

if you’re a dog owner, chances are that you spend just as much discretionary income on Fido as you do on the two-legged members of your family—and savvy marketers know it. here’s how one 57-year-old veterinary practice has innovated its offerings and go-to-market strategy to cater to today’s “pet parent” clients and their four-legged companions.

By ChrISTINE BIrKNEr | staFF Writer

 cbirkner@ama.org

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t used to be that Fido was relegated to the doghouse, or at least to an old blanket crumpled in the corner. Now he sleeps with you in bed—or on a fleece-lined Tempur-Pedic Dream Lounger dog bed that you bought from Orvis and paid more than you did for your own decades-old mattress.

Pampered pooches (and fortunate felines) in the United States are a consumer segment unto themselves, and their purchasing power is growing. Sixty-two percent of U.S. households, or 72.9 million homes, own a pet, and the number of dog-owning households reached a new high in 2011—46.3 million, up from 45.6 million in 2008—with 40% of U.S. households owning two or more dogs last year, according to the American Pet Products Association Inc. (APPA), a Greenwich, Conn.based nonprofit trade association for the pet products industry.

Pet spending in the United States nearly doubled in the last decade, reaching just over $50 billion in 2011, up from $28.5 billion in 2001, the APPA says. And pet products are expected to be a $67.7 billion industry by 2016, according to global consumer research firm Mintel Group Ltd. Dog and cat owners also are spending more on veterinary services: an average of $248 on routine vet visits and upwards of $400 on surgical vet visits per pet in 2011, with total vet care spending in the U.S. jumping from $13 billion in 2010 to $14 billion in 2011, according to the APPA. The pet industry’s rapid growth is a response to a big shift in consumer behavior, as more Americans go from thinking of pets as, well, pets, to considering them to be members of the family. This behavioral shift can be largely attributed to the generational and societal shifts taking place amongst U.S. demographics, says Dara Foster, founder of the New York-based boutique dog collar company Dara Foster New York and pet fashion website Pupstyle.com. “A lot of single women and men and couples who don’t have children are experimenting with pets as their baby now. Baby boomers are empty nesters and they’re looking for that child replacement,” she says.

Sure, there have always been passionate pet owners, but now 81% of dog owners consider their dogs to be members of the family, according to a May 2011 survey by Parsippany, N.J.-based Coyne Public Relations, whose clients include Milk-Bone, 9Lives, Snausages, Pup-Peroni and Kibbles ’n Bits. Seventy-seven percent of survey participants admitted to talking about their dogs as if they are human family members and 54% considered themselves to be “pet parents” instead of “pet owners.” More than 80% of pet owners know their pets’ birthdays and have celebrated at least once, and 77% have bought their dog birthday presents. “There’s been such a shift in the mindset of consumers and the way they feel about their pets. Dogs aren’t sleeping in doghouses anymore; they’re sleeping in the bed,” says Jennifer DeNick, assistant vice president at Coyne PR. (Or on the aforementioned $350 memory foam dog bed.)

In response to the pet industry’s exponential growth, business has been booming for pet marketing firms such as Tarpon Springs, Fla.-based Fetching Communications. Fetching has experienced double-digit growth percentages every year since 2003, according to President Kristen Levine, who says that the “pets as consumers” trend has been building over the past 15 years. “Americans’ love for pets has accelerated pet spending since 1997,” she says.

you

Can Teach an old dog…

All of this is good news for Banfield Pet Hospital, a Portland, Ore.-based veterinary care clinic operator that opened its doors in 1955 when founder Warren J. Wegert, a veterinarian, wanted to offer “humanquality” medicine and healthcare to pets in Portland. Vet services have evolved beyond the rabies shots and flea baths of the 1950s as pet owners have become savvier about veterinary health and are bringing their pets in for regular checkups and teeth cleanings, and even investing in health

insurance for their furry friends. As the veterinary industry has advanced, so to have Banfield’s services, says Stacey Osborn, the company’s vice president of marketing and communications. “We believe in the wellness plan and the benefits it gives to pets. It’s like with humans. If you go in and get your teeth cleaned twice a year, you’re willing to keep your teeth clean for the rest of your life,” she says.

In 1988, Banfield created its signature service, the Optimum Wellness Plan, a preventative care package that includes two checkups per year, blood tests, vaccines and de-worming. Prices range from $21.95 to $49.95 for an adult dog and $17.95 to $39.95 for an adult cat. Sales of Optimum Wellness Plans have increased by 15% over the past five years, according to the company.

In 1993, Banfield began opening clinics in PetSmart stores. In 2007, Banfield was purchased by McLean, Va.-based Mars Inc., which also owns pet care brands such as Pedigree and Whiskas. Today, Banfield’s 2,400-plus veterinarians treat 2.5 million pets per year in 800 hospitals in PetSmarts around the country, and also in four standalone locations: the original clinic in Portland and clinics in Denver; St. Paul, Minn.; and Mexico City, Mexico.

And for those owners who take their pets on vacation, Banfield provides guests of Loews Hotels a free examination and 15% off services for their pets at the nearest Banfield location. Through the partnership with New York-based Loews Hotels, which operates 18 hotels and resorts in the U.S. and Canada, Banfield also offers pet-toting hotel guests the use of food bowls, beds, treats, room service and dog walking services. “Banfield is still in the process of building awareness around the United States, and we felt Loews was a great partner. They [want] to ensure that they’re attractive to pet owners and they care about pets like we care about pets,” Osborn says.

Banfield declined to disclose financial information because parent company Mars Inc. is privately held, but Osborn says that revenue has continued to grow year over year.

“There’s been such a shift in the mindset of consumers and the way they feel about their pets. dogs aren’t sleeping in doghouses anymore; they’re sleeping in the bed,” JenniFer denicK, coyne pr

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Fetching proposition

To market its services, Banfield works with Phoenix-based PetSmart Inc. to target the retailer’s clients and target audiences including busy moms, sending e-mail blasts to PetSmart customers and distributing bag stuffers that emphasize the convenience of Banfield clinics, which are open seven days a week from 7 a.m. to 7 p.m. In October and November 2011, Banfield tested TV and radio ads and billboards in the Raleigh, N.C., Richmond, Va., and Portland markets to build awareness about the clinics’ preventative care focus. Once the results are in on how these ads fared, Banfield will continue to test ad strategies in additional markets around the country.

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Four-legged fashion

Brands across the style spectrum are jumping into the furry fray. Old Navy, Harley-Davidson, Paul Mitchell, Cynthia Rowley, Ralph Lauren and Coach all stock stylish pet clothing and products. Want a bridal dress, Halloween costume or mullet wig for your dog? No problem. Celebrities as diverse as Martha Stewart and Poison front man Bret Michaels have launched pet style lines. Dara Foster, founder of the New York-based boutique dog collar company Dara Foster New York and pet fashion website Pupstyle.com, who designed a line of pet products for Bed, Bath & Beyond and dog dresses that mimicked celebrities’ red carpet looks for a segment on The Wendy Williams Show, says pet products have “gone far beyond basic necessities into indulgence because we love pets so much and they invoke this visceral response.”

Beyond pet fashion, there are plenty of pet product makers profiting from all of this puppy (and kitty) love. Business is booming for Tobi Skovron, founder and CEO of Melbourne- and New York-based Pup-Pee Solutions, which sells the Pet Loo, an indoor toilet for dogs made of synthetic grass. According to Skovron, the Pet Loo’s sales grew by 47% in 2010 and 53% in 2011. “People are having kids later in life and the void is being filled by a pet. As a result, we’re having success. [The growth] is incredible. It’s a huge business, a huge industry,” he says.

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Banfield also garners publicity and boosts customer loyalty through its website and media and pet blogger outreach. The company has a content marketing strategy that includes pet wellness articles and videos on its website, along with an “Ask a Vet” feature—all of which are intended to prompt owners to think about pet health and schedule a clinic visit if necessary, Osborn says. Website visitors also can sign up to receive e-newsletters with advice on protecting their pets from illness and providing proper nutrition. “It’s a natural reaction for consumers to go to the Internet first when they have a question. We’re very cognizant of that [in putting together] our website. We give tips on how to ensure you’re caring for your pet properly. We’ll also say, ‘Please talk to your vet,’ because like with human healthcare, every case is unique and a doctor would be the most qualified to make diagnoses and give advice,” Osborn says.

In 2011, Banfield took its content marketing strategy a step further by offering up custom research and thought leadership with the launch of a series of reports called “The State of Pet Health,” a compilation of medical data and disease trends for about 2.5 million dogs and 450,000 cats treated at Banfield locations. The report was distributed to pet bloggers and media outlets around the United States. “[The report has] been referenced hundreds of times because of the credibility we bring to it,” Osborn says.

In an attempt to humanize the brand and engage audiences, Banfield is the official veterinarian of the annual BlogPaws pet blogger conference, an event hosted by the BlogPaws online community, and sponsors the dog park there. The vet services company also sends media outlets and pet bloggers an annual list of the most common names for pets (Bella, Max and Buddy topped the list in 2011) and other timely, buzz-worthy pet statistics, such as the number of pets named Kate and Prince William leading up to the Royal Wedding in 2011. These press releases drive traffic to Banfield’s website and boost awareness for its services, Osborn says.

Because most dogs and dog owners are social creatures, the vet services company has a social media strategy in place as well. Banfield currently has about 34,000 Facebook and 1,500 Twitter followers, and features pet birthday photo contests on its website, Facebook and Twitter pages. Foster, the pet boutique owner, says that social media is an ideal platform for connecting with pet owners. “Having that two-way dialogue with the [pet owner] is the No. 1 way to build trust. Playing up how cute pets are is a new marketing niche … and pushing that through social media is changing the way pet brands are able to gain consumer loyalty,” Foster says. “If you push the cute button, it drives the [service] home.”

Total vet care spending in the U.S from

$13 billion in 2010 to $14 bill

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Sharing the

Puppy Love

To bolster its brand image, the pet care provider participates in community outreach and several charitable programs, including “doggie dash” pet marathons and pet expos, as well as educational exhibits with mini-veterinary hospitals at 12 children’s museums and seven zoos around the country. “We’ve had a lot of feedback from our zoos and museums saying they love our partnership and we’re one of the most popular exhibits in their museum,” Osborn says. Banfield’s FutureVet program— classes that teach children what it’s like to be a vet—also generates goodwill in the market, Osborn says, and FutureVet graduates receive a free Banfield office visit for their pets.

The company’s charitable programs are run through its Banfield Charitable Trust and include a pet advocacy grants initiative that helps pet-focused organizations and families that can’t afford emergency care for pets; Seasons of Suppers, a food donation program that works in conjunction with Meals on Wheels; and Pet Peace of Mind, which ensures that pets aren’t taken away from elderly customers if they enter hospice and that someone will take care of their pets if they pass away. Banfield also sponsors a Pet Adoption Rewards Program with 1,500 animal shelters in which participating customers receive discounts on Banfield’s Optimum Wellness Plans. “It’s a way for us to get the word out about wellness plans and help new pet parents know all the things we have to offer,” Osborn says.

Although Banfield can’t measure the ROI of its charitable programs, “it’s just the right thing to do,” Osborn says. “We wholeheartedly believe in making the world a better place for pets by not only providing fantastic medical service, but being charitable where possible.”

Catering to today’s “pet parents” means that pet marketers have to take a much more emotional approach to the marketplace, rather than simply a pragmatic one. Dog food is no longer a pejorative term, as dogs now dine on kibble made from lamb, barley and salmon. They’ve moved on from being sprayed off with a garden hose to being bathed in essential oils. Pet owners now lavish as much love on their pets as they receive in return—and pet marketers like Osborn are helping them do so. “There’s so much emotion involved, and we take that to heart with every pet we treat,” she says. m

81%

of

dog owners consider their dogs to be members of the family

the U.S. jumped

$14 billion in 2011.

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