Most veterinary practices operate in competitive environments where developing and executing a well-designed pricing strategy can make a big difference. Strategic pricing, defined as “the clear identification and selection of a value proposition by the manager and the use of a consistent, structured pricing process,” contributes to the financial performance of the veterinary practice. It allows the practice to stand out from its competitors, deliver superior value to pets and pet-owners, pay its employees fair living wages, and maintain a sustainable and profitable business. 

 

When a practice employs strategic pricing methods such as price bundling, loss-leader pricing, and good-better-best pricing (each of which are covered in detail in other VHMA best practice tools), the structure of prices offered to clients is more complex, discounts and promotions are used judiciously, there is greater variation in prices, and average prices charged are much higher. These strategic pricing methods go far beyond marking up costs or simply copying competitors. They align the veterinary practice’s prices to the value that clients – pet-owners and pets alike derive from the practice’s offerings. 

 

However, it’s not enough for the practice to ask clients for strategically determined prices. Communicating the new prices and explaining the logic behind them clearly and confidently to clients is just as crucial for strategic pricing success. In most veterinary practices, frontline staff members, the front desk team members, check clients in, collect information about their pets, provide them with invoices, and collect payments. They often are the ones who have to explain pricing and deal with client concerns, complaints, and objections about prices. However, both doctors and technicians are also involved in these conversations when they discuss estimates or address client questions and concerns about the cost of a recommended treatment. The “veterinary team” discussed in this paper includes all of these roles in a practice. Ultimately, the team is responsible for price realization, defined as earning the asked-for prices while maintaining client satisfaction.

This best practice tool provides management professionals with useful concepts and tools to support team members in communicating prices to clients and maximizing the practice’s price execution. First, we will consider two principles of strategic pricing to maximize price execution. These principles have to do with price fairness and price transparency or easy access to prices. After that, we consider specific advice and suggestions that should be given to staff members by using a three-step process of educating them about strategic pricing and price execution.