Who Benefits from Complicated Pricing Models?

Pricing strategy is the lifeblood of your company’s revenue.  Customers who easily understand your pricing are more likely to spend more money at your facility and those businesses who continue to offer tons of discounts will get left behind.

Every day, Gingr talks to potential and existing clients about their pricing.  I have included below two examples of how different facilities price their services.  Which one makes more sense to you?

Option 1 

  • Standard boarding costs $19 per night if your pet weighs under 30 lbs., add an extra $10 per night if your pet is between 31 and 60 lbs. or add an extra $20 if your pet weighs more than 61 lbs.   
  • Daycare costs an extra $12 for the first four hours or $20 for the entire day.
  • If you have daycare package credits, you can apply those toward boarding, which then reduces the price of boarding by the amount you paid for the credits.
  • Any pick-up between 12-4PM is an extra $10
  • Any pick-up or drop-off on Saturday or Sunday is an extra $10, but we will only charge you one of the weekend fees, not both.
  • Any additional dog in the same family and same room receives 10% off and additional dogs who do not share a room are 5% off.
  • If your reservation is for more than 7+ nights we take an additional 10% off, but this discount is applied on the subtotal of the multiple dog discount.

Option 2

  • Standard boarding costs $39 per night and includes daycare (dogs who cannot participate in daycare receive two walks per day and a potty break before bedtime).
  • Any additional dog in the same family and same room receives 10% off.
  • If your reservation is for more than 7+ nights we take an additional 10% off.
  • Pickups after 11AM incur a ‘last day daycare’ charge equivalent to a single day of daycare.

These two pricing models are quite different.  The second model is pretty straightforward and easy to understand (Customers like this, a lot).  Yet, in our industry, which is full of discounts, and multiple tiers of pricing, you would be surprised how many facilities have pricing components similar or identical to option 1.

Is the pricing strategy in option 1 bad?  Not necessarily, but if your staff can’t do the basic math on the total cost of the stay without using a graphic calculator, you may want to revisit your pricing.

 Do not feel like you have to discount everything just because your competition is doing it, or even because a few customers ask for more discounts.  Your loyal customers are willing to pay a premium for the trust and peace of mind you offer them by providing excellent care to their pets and, often, lower pricing makes things seem less valuable.  If you answer yes to any of the questions below you may want to reconsider your pricing for the upcoming new year:

  • Do you offer additional pet discounts for boarding in the same room that are greater than 25% off?
  • Do you offer multi-night discounts for pets boarding anything less than 10 days?
  • Does it take you more than thirty seconds to explain your pricing to a customer?
  • Do your employees often make mistakes when checking customers out?

Please contact us if you want to discuss your pricing further or have any comments to add to this post.