Making Sense of Price Elasticity: A Vet’s Guide to Smarter Pricing

As a veterinary practice owner, you’re always looking to improve your bottom line without losing clients. Enter price elasticity – a concept that can help you do just that.

What’s Price Elasticity in Vet-Speak?

Think of price elasticity as how much your clients’ wallets stretch when you change prices. Some services are like a sturdy leash – they don’t budge much when pulled (inelastic). Others are more like a stretchy toy – they give a lot when tugged (elastic).

Inelastic Services: The Must-Haves

These are services pet owners see as essential. Examples include:

• Annual check-ups
• Core vaccines
• Emergency care
• Spay/neuter surgeries
• Most lab tests (especially pre-surgical or for acute illnesses)

While these services are generally inelastic, it’s important to note that some, like annual check-ups and spay/neuter surgeries, can be subject to comparison by pet owners. Existing clients are likely to accept modest price increases due to their loyalty and trust in your practice. However, if prices rise too significantly, even loyal clients might start exploring other options and potentially switch to a different veterinary practice. The key is to balance fair pricing with the value and trust you’ve built with your clients.

Elastic Services: The Nice-to-Haves

These might include:

• Teeth cleaning
• Premium food
• Fancy grooming services
• Nutritional consultations
• Some elective procedures

Raise prices too much here, and you might see fewer takers.

Lab Tests: A Special Case

Lab tests generally fall into the inelastic category, but there’s room for strategy:

• Consider bundling tests with other services
• Update costs regularly (lab companies often increase prices twice yearly)
• Implement gradual price increases to avoid shocking clients

Putting It into Practice

1. Know Your Services: List everything you offer and categorize them as essential or optional for most clients.
2. Watch the Numbers: Track how many clients say “yes” to different services at current prices.
3. Test the Waters: Try small price increases on a few services. Did bookings drop? That’s elastic. Stayed the same? That’s inelastic.
4. Listen to Your Clients: Pay attention to comments about prices.
5. Adjust Smartly: Consider raising prices more on inelastic services where demand won’t drop much. Be cautious with elastic services – try bundling them or offering packages to add value.

Remember, it’s not about raising prices across the board. It’s about finding that sweet spot where you’re maximizing revenue without sending clients running to Dr. Google for home remedies. By understanding which services your clients see as must-haves versus nice-to-haves, you can craft a pricing strategy that keeps tails wagging and your practice thriving. It’s all about balancing what pet owners need with what your practice needs to keep providing top-notch care.