By: Amanda Bertholf
When your veterinary practice’s revenue is down—and maybe you still haven’t recovered from the recession—it can be all too tempting to lower your prices on the services you offer, like veterinary ultrasound. But there’s a fine line to walk when it comes to pricing your services. The right pricing, however, can help your veterinary practice compete and even thrive during difficult economic times. Here are some pricing dos and don’ts from Reed Holden and Mark Burton, authors of Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table (John Wiley & Sons, 2008):
Define the value of your services. You are the authority in providing care to animals. What are you doing to help your clients understand this? For example, take the time to thoroughly explain to clients step-by-step what goes into a veterinary ultrasound and what you’re looking for. Any knowledge of the value you deliver to your clients gives you greater control over your pricing.
Create a range of low- to high-value offerings. Bundle the services you offer, like pregnancy ultrasound and bovine ultrasound, and establish price accordingly. This enables you to cater to both cost-conscious and value-conscious customers without cutting prices. This also ensures your patients are getting needed veterinary care and attracts clients to your practice year-round, even during your slowest months.
Control costs and reduce inefficiencies. Streamlining your veterinary practice’s processes and expenses is good for business in any economy. Reducing prices to generate more sales will not improve your business in the long term.
Invest in innovation. Consider adding a new service to your repertoire, or funnel funds into new products and services. This gives you negotiating flexibility with clients and helps you stand out from the competition. Innovation gives your practice an edge.
Discount your products or services in order to compete. Getting into a price war with your competitors—without adjusting the value of the product or service—will just send you and your competition swirling into a downward pricing death spiral where no one wins.
Reduce prices on your high-value products and services. A better strategy is to keep high-value products priced appropriately, but focus on selling more low-value products and services.
Play poker with price-driven clients. When cost-driven clients threaten to take their business elsewhere, either: 1) Confidently point out the value of your services, which justifies the price you charge, or 2) let the customer take his business and badgering to your competitor instead.
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