A Guide to Veterinary Pricing Models That Work
Veterinary practice owners face mounting pressure to set fair and profitable prices as post-pandemic economic uncertainty has become widespread for many families. Rising inflation, supply chain issues, and staff shortages can make pricing decisions feel impossible as teams try to balance expenses with clients’ ability to pay for care.
Your veterinary pricing model must support your bottom line while reflecting the quality of care you deliver and your clinic’s philosophy and values. So, how can you strike the delicate balance of fair and equitable pricing? Here’s a guide to veterinary pricing strategies to simplify the process.
Employing value-based pricing
Pricing is more than simple math; it also accounts for pet owner perceptions and quality of communication. Value-based pricing ties your fee schedule to the perceived value of your veterinary services, rather than using a standard markup formula. Skilled services are priced higher to demonstrate the value of your team’s education and experience, which allows for wiggle room in your routine care veterinary pricing model.
Services that carry a higher price tag offer customers value they can see and comprehend, and they’re more likely to be willing to pay for better care rather than paying more for everything each time the hospital must increase pricing across the board.
Adjusting to benchmarks
Learning your operating costs and comparing them against industry standards or benchmarks helps you set the bar. Although all practices are different, having a general guideline on where to start can be helpful. Leading organizations, including the Veterinary Hospital Manager’s Association (VHMA) and the American Animal Hospital Association (AAHA), offer pricing resources to help you keep up with trends and stay aligned with the broader veterinary profession while tailoring insights to your own clinic’s unique financial structure.
Tracking profitability, cost of goods sold (COGS), and profit margins across service categories, such as surgery, vaccines, or pet food, ensures you don’t undercharge for time-intensive or resource-heavy procedures. The AAHA Chart of Accounts is helpful for assessing your current veterinary pricing model and ensuring it reflects the labor and supplies involved in your particular brand of veterinary care.
Considering client demographics
Your veterinary pricing model should reflect the quality of your care. A DVM in a dense urban area might set prices differently from a rural veterinary hospital because of variable overhead costs, price sensitivity, and customer expectations.
Client demographics also influence what services you promote over others. For example, younger pet parents may be more receptive to monthly wellness plans that spread costs over time, while retirees might prefer à la carte options. Flexible pricing options like bundled preventive care packages can help meet your clients where they are without devaluing your services.
Letting fear dictate pricing
Veterinary professionals may hesitate to raise fees or adjust their veterinary pricing model for fear of losing clients, even when the numbers are clear. However, price increases are an expected part of maintaining a sustainable veterinary business when implemented thoughtfully and communicated clearly.
The key to a smooth pricing change is transparency, which relates back to value. Help pet owners understand what they’re paying for and why it benefits them, such as your team’s advanced training or state-of-the-art equipment. Give clients advance notice and frame price changes to highlight patient care and quality.
Bundling and communicating pricing
Bundled pricing can boost compliance and customer satisfaction. Grouping services encourages pet owners to comply with a full range of recommended care. However, buy-in depends on showing pet owners the value proposition behind the bundle.
Educating your front desk and clinical team members on the benefits of bundled services, wellness plans, and preventive care options is as important as the pricing itself. The more confidence your team has in the value of your veterinary services, the more confidently they can communicate it.
Keeping your pricing model current
Regular fee schedule updates are essential in the fast-moving veterinary industry. Reviewing practice prices and pricing decisions should be part of your quarterly or annual veterinary practice management routine. Keep abreast of supplier cost increases, changes in the veterinary medical association guidelines, and shifts in client behavior that may impact pricing.
Pricing reflects your practice
Your veterinary pricing strategy is part of your brand. The veterinary pricing model you choose communicates your philosophy and approach to veterinary care and the relationship you want to build with pet owners.
Set prices that support your team’s vision, uphold your medical care standards, and help your veterinary clinic grow. Pet owners will invest in pet health when they trust in the value you provide, and that trust starts with transparent, fair, and value-based pricing.
