Recently retired president of PVP talks about winning customers’ hearts and minds

It was in March 1982 that a group of swine veterinarians got together to talk about a problem they shared: The prices many of them were paying for food-animal products differed little from - and often were higher than - retail prices paid by producers from OTC distributors. “Veterinarians just were not price-competitive on many products,” says Lionel Reilly, recently retired president and CEO of PVP, the Omaha, Neb.-based, veterinarian-owned animal-products distributor. Given their collective volume, the vets figured they could do better.

So, later that year, 73 practices joined together to found PVP, a corporation designed to help them fetch better prices in the market and pool their knowledge and expertise. Their first employee was Reilly. It was a tailor-made match. Reilly stayed with the organization 27 years, helping to build what is today a national distributor representing 2,000 shareholders with a customer base of 5,000 veterinary practices. Reilly currently serves as adviser to the organization’s board of directors as well as liaison between PVP and the animal health industry.

Interested in industry
Reilly received his Bachelor of Arts degree in chemistry and zoology from Kansas Wesleyan University in Salina; and his Bachelor of Science in Liberal Arts and Doctor of Veterinary Medicine from Kansas State University in Manhattan. From 1970 to 1972, he served as post veterinarian at Hunter Army Airfield in Savannah, Ga. Then, he became a partner in a six-doctor companion-animal practice in Denver, Colo., where he worked for five years.

In 1977, he joined Burns-Biotec Laboratories (acquired by Schering-Plough Animal Health a couple of years later) in Omaha, Neb., and ultimately served as director of pharmaceutical operations, with responsibility for all research and manufacturing activities. Joining industry was something that had been on his mind for some time. “The research side of the world always interested me,” he says. Even during veterinary school, he spent several summers doing research on behalf of a number of manufacturers.

In 1982, Schering-Plough decided to relocate many of its corporate activities to New Jersey. But Reilly had grown attached to Omaha and decided to stay put. At around the same time, PVP was looking for someone to guide it through its formation and subsequent growing pains. He took the job. “For me, it was an exciting opportunity to do something new and different,” he says.

The Reilly Advantage
Reilly became so identified with PVP that much of the company’s success has been attributed to what PVP calls the “Reilly Advantage.” In layman’s terms, it is roughly synonymous with the “Golden Rule,” that is, “Do unto others what you would have them do unto you.” In this case, the “others” are employees and customer/owners. “Happy employees are the absolute foundation of a solid company that is serving customers well,” says Reilly.

“Some companies are corporate-focused,” he says. “PVP has always been customer-focused. Everyone has a different definition of what ‘customer-focused’ really means, but to us, it has meant focusing on the people inside the company (internal customers) and outside the company (external customers).

“If you’re too focused on the company as an entity, and not enough on the people who are working and buying, you lose your direction. The fact that PVP has always kept the focus on people shines through to the customer, builds a good reputation and keeps things moving in the right direction.”

No doubt, the fact that PVP is owned by its customers has helped ensure its success. “Shareholders have great loyalty to PVP, purchasing a far greater share of their overall product mix from their company than from the competitors,” says Reilly. But that doesn’t give PVP management and territory reps a free pass.

Customers’ challenges
As all companies must, PVP has worked hard to identify the challenges facing its customers and then provide programs and services to help address them. In 2002, for example, PVP created a limited liability company called PROCONN to help veterinarians compete in the OTC market within the livestock industry.

In 2002, “it became very clear what everyone was saying - the number of food-animal veterinarians was going to continue to decrease,” says Reilly. The current vets were getting older, and the schools just weren’t graduating enough to fill the gap. The question, then, was, how could PVP help food-animal vets do what they do best - provide diagnostic and therapeutic services - given their growing workload? The solution was PROCONN.

“We felt we could help [vets] out by providing trained folks on the ground who could help get the product the veterinarian recommended to the producer, and help the producer get veterinary care when they needed it,” he says. PROCONN’s strength lies in the fact that it respects and preserves the relationship between veterinarian and producer while offering assistance to both. PROCONN began operations serving the cow/calf and stocker business, then expanded into dairy operations and most recently, into the swine industry.

Technology
In 2007, in an effort to help companion-animal vets provide excellent patient care while competing with direct-to-consumer, Internet-based marketers, PVP created Vets First ChoiceSM, an online store and home delivery service that connects with the veterinarian’s Web site. The client logs on to his or her vet’s Web site, orders supplies and prescription medications, pays by credit or debit card (at prices dictated by the vet), then receives the products directly at the home. (They are shipped directly from PVP.) The veterinarian is notified of all transactions, and funds from the sale are deposited directly into his or her account.

Vets First Choice allows the veterinarian to continue to offer products for resale without the hassle of ordering, receiving and stocking them, says Reilly. The client, meanwhile, enjoys the convenience of ordering from his or her computer and getting home delivery.

In addition to convenience, Vets First Choice offers a reliable source for products, says Reilly. “There are a number of Internet resellers who are by no means legal in what they do. They’re less respectful of the prescription drug laws than any of us would like. The goal of Vets First Choice is to [preserve the status] of the veterinarian as the sound and trusted judge of what is and isn’t needed for a pet, and allow his or her clients - who have said they would like to buy products from their veterinarian as well as home delivery - to do just that.”

PVP has also made available to its customer/owners a variety of technologies to make inventorying and ordering supplies easy, quick and accurate, thus allowing them more time to be with patients, says Reilly.

Part of its IMPACTSM inventory management system, for example, is the Automated Inventory Management program, which allows the clinic to place orders by phone, fax or online. The software generates an electronic purchase order, which is received and filled by PVP. At any time, the clinic can check on the status of the order online. Upon shipment, the clinic opens the electronic PO, reviews it for accuracy, and accepts the products.

The system is designed to work in tandem with a bar code scanner. As products are used, the clinic either scans a system-generated bar code label (attached to the shelf or stored in a notebook) or directly scans the product. Then the clinic plugs the scanner into a PC. An electronic shopping cart is created, which the clinic can use to order replacement items.
A fully developed practice management system, called V-Tech, offered in conjunction with 2i Nova Inc., provides a variety of clinical and business solutions, including medical history, scheduling, imaging, and auto surgery and lab logs.

Feet on the street
PVP’s sales reps - called territory managers - are asked to do far more than sell products. It is up to them, for example, to bring to the attention of PVP customer/owners news of upcoming continuing education “lunch and learn” programs and multiple-day seminars on such topics as inventory management and customer service.

“All of the surveys of our shareholder base tell us that people don’t want to be sold,” explains Reilly. Though PVP’s territory managers do write some business, most of their orders are, in fact, phoned, faxed or keyed in.

“What our customer/owners told us they wanted was someone to be consultative. They wanted additional services, and they wanted someone to assist them in areas in which they weren’t skilled. That’s really how the territory manager position has morphed, and how it continues to change.
“We have to address the needs of our owners.”

Sidebar:
Reilly on the Business
It’s been almost 40 years since Lionel Reilly finished veterinary school and became post veterinarian at Hunter Army Airfield in Savannah, Ga. He has witnessed - and in some cases, precipitated - some big changes in the business. And he hopes to see many more in his continuing capacity as advisor to PVP. Here are his thoughts on some of the big issues facing veterinarians and their suppliers today.

Internet marketers
“Pet health can be threatened when consumers purchase products that are not necessarily the products their veterinarian would recommend - maybe because of other health issues, the pet’s age, species or simply because the pet’s base health level is unknown. They do so just to get a bit better price, and they are putting their pet’s overall health at risk. When a consumer works with his or her veterinarian, the pet’s health and quality of life can be improved. Product quality and authentication
is also a threat.”

Pet insurance
“We’re just not seeing the uptick [in pet insurance policies purchased] by pet owners that would make this a huge factor in the near future.”

Gender changes in veterinary medicine
“When I graduated from Kansas State University in 1970, there was one female in my class. Now, 80 percent of the students and graduates are female.”

Future of veterinary medicine
“The pet has become a family member, and [owners] want that family member cared for and treated just as if they were children being treated by a physician. It has driven veterinary medicine to a much higher level.”