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Pricing matters

Practice owners might not be aware that pricing can be an important part of marketing and branding your business, and not just an accounting function

03 September 2020, at 8:55am

It’s not uncommon for veterinary business owners to skim over pricing. It is easy to just look at the cost of services and add a fixed percentage on top, or just copy rates of local competitors to set their own prices.

The fact is that most practices don't have a pricing strategy and what they often have instead is a random jumble of prices built up over years. Not only that, but anecdotally it is said that veterinarians in the UK often tend to undervalue themselves and undercharge for their services.

This is obviously not a good way to go about things. It’s better to have a pricing strategy to work with, to ensure that you are getting the money you deserve, especially in today's difficult COVID-climate.

Charge correctly

Aligning your pricing with your branding and marketing strategy can bring big benefits to your business. How you price yourself can have a direct impact on the success of your business and the type of people you want to attract.

If you have a strategy to do this in place it can help simplify your marketing and make pricing quicker and easier for years to come.
What’s your brand message?

It is important to acknowledge that there is no perfect pricing strategy for practices; you can be equally successful at the top or the lower end of the market. The only thing you need to ensure is that the prices that you charge reflect your business brand. For instance, are you the high-end, high-fee boutique vets, or the friendly value vets? Either way, your pricing needs to accurately express the brand image that you want to portray.

If your pricing and branding diverge, then you’ll be attracting the wrong clients and then leaving them disappointed when the service they receive doesn’t match your brand promise. You could also be missing out on untapped revenue if you’re not charging enough for the quality of service you’re providing.

Prove your value

One thing’s for certain – deciding how much to charge for your product requires a bit more thought than simply calculating your costs and adding a mark-up.

For vets opening a new branch, then one strategy might be to use low prices initially to penetrate a market and get an early foothold.

At established practices that are providing a great service that stands out in the market – for example orthopaedics or top customer service – value-based or premium pricing will better help convey the value you offer.

Value-based pricing means figuring out how much the customer values your service and pricing it accordingly. The premium prices you charge act as a signal to the customer that you provide a higher quality service than your lower priced competitors.

If you are confident that you can offer a better service than your competitors, then don’t be afraid to raise your prices.

Look for consensus

Each year you should meet with your team to discuss and adjust your pricing strategy. A good time to do this can be when you are creating your annual business plan, as you can also check to confirm whether your pricing is aligned with your business goals for the year ahead.

Pricing can be a source of divergence and disagreement between partners, so it's important to reach a consensus on who you think you are as a business and whether your prices reflect that.

Think ahead

The strategy you decide upon can make or break your business, as the price of your services directly affects the revenues of your company.

Therefore, it is critical to consider which one will best help you achieve your business goals. Your plan does not have to remain fixed forever though; a prosperous veterinary practice is prepared to adjust its strategy over time in order to maintain profitability and competitive advantage.

Will Stirling is a freelance marketing consultant who has worked in small animal practice marketing for over a decade, consulting on marketing strategy. He now spends his time helping independent veterinary clinics to grow and thrive.

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