The Psychology of Veterinary Pricing Strategies: What Pet Owners are Willing to Pay
Pricing veterinary services in a way that feels fair to clients but covers clinic costs and allows team members to earn a living wage can be a tricky balancing act. Your hospital’s prices influence client perceptions, financial sustainability, and your ability to provide quality pet healthcare.
Understanding how pet owners think about costs and the pressures they face in tough economic times can help practice leaders and owners develop veterinary pricing strategies that protect the bottom line while boosting client confidence in your care.
Veterinary pricing strategies and service value
Veterinary practice fees must cover the clinic’s overhead costs and help you maintain a healthy profit margin. However, clients may struggle to accept rising fees if they don’t understand the value of your services. Pet owners interpret prices as a signal of quality, but you must clearly communicate the benefits of a service to establish value.
Value-based pricing, the art of setting prices according to the perceived value of a service instead of using a blanket markup, can improve client price acceptance. Pet owners are willing to pay more for a skilled service like surgery, but expect routine services, such as vaccinations, neuter surgeries, or wellness exams, to be competitively priced.
Pet owners—and consumers in general—are willing to pay more when exceptional service accompanies the product or service they’re purchasing. Safety protocols, upgraded equipment, and compassionate team members each contribute to a client’s perception of the hospital and its pricing.
Veterinary pricing strategies and client trust
Trust is critical in any relationship, including the vital connection between veterinarians and clients. Trust in your veterinary professional team boosts client loyalty and colors their view of your prices. Clients who trust are less likely to price shop and more likely to follow recommendations with well-supported reasoning behind them.
Practice management can work on strengthening client trust by:
- Explaining price changes and decisions openly
- Training team members to confidently discuss costs
- Aligning practice management software estimates with actual invoices
Factors that influence client spending
Demographic factors, including local average income levels, competition from other hospitals, and ideas about pet health in the community, can influence veterinary pricing strategies. Leading veterinary groups like VHMA, AVMA, and state veterinary medical associations typically publish pricing benchmarks to help you compare your fees with regional and national norms.
Your veterinary practice management software can help you understand client habits with tracking and reporting tools that reveal shifts and patterns in spending and profitability. Insights into client behavior can help refine veterinary pricing strategies without compromising the hospital’s bottom line.
Balanced veterinary pricing strategies
Setting prices in the veterinary profession requires leadership to reconcile competing needs: maintaining a healthy business valuation and ensuring accessible, high-quality veterinary care for pet owners. Operating costs, competition, and the value of your employees’ expertise are all considerations in this balancing act.
Addressing these competing needs requires creativity. In addition to value-based pricing, veterinary practice owners may consider alternative models, such as membership and subscription pricing that provide clients with perks for a monthly fee, wellness plans that bundle preventive care services, or care packages for dental or surgical services.
Easing into price changes
Straightforward client communication and relevant education help veterinary professionals earn and keep pet owners’ trust. How you talk about pricing and price changes influences how clients react. Help clients feel comfortable with change by:
- Announcing changes in advance
- Explaining why prices are going up
- Highlighting improvements in the client experience
Gradual changes to familiar pricing may be easier for clients to digest than sudden increases, especially if you haven’t made changes in a while. Additionally, framing price changes in the context of service improvements and benefits for pets can help emphasize value and justify higher prices.
Pricing for value
How much you can charge for services depends not only on the veterinary clinic’s finances and overhead costs, but also on the perceived value of your services and client willingness to pay for pet care. The veterinary pricing strategy that works for you must be tailored to your community demographics rather than relying on a markup formula across the board.
A veterinary pricing strategy that aligns with client expectations, market benchmarks, and clinic profitability goals provides sustainable support to your veterinary business, team members, and the pets you serve.
