One of the greatest challenges you’ll face as a business owner is creating a pricing structure that works in your space. You don’t want to charge too little and risk leaving money on the table. After all, you have bills to pay! But you don’t want to charge too much, either. Quality being equal, prospective customers will opt for a less expensive service. In other words, it pays to know your market. But what factors can impact your pricing? Read on to learn more about pricing best practices and use our pricing structure template to set the right prices for your business.
Be the Best Pet Sitter, Not the Cheapest Pet Sitter
Start by identifying what you’re good at. Maximize your revenue by identifying areas where your company most excels at delivering value to pet owners. The barriers to entry in dog walking and pet sitting are notoriously low. In one sense, that’s great because it can foster competition and innovation. On the other hand, you’re going to need to set yourself apart from the pack. You can do that in a few ways.
It may seem like the easiest way to compete is by having the lowest price. This would be a mistake. I’ve seen this happen too many times to keep count. A new pet sitter starts with bargain basement prices in an attempt to fill their schedule up quickly.
That’s great in the short term, but not sustainable. You’re not going to be able to pay your business expenses and have enough left over to live. Your competition has built in these expenses, and they’ve factored the local cost of living into their pricing. That’s why their services are more expensive than yours. You may be able to fill up your schedule, but you won’t be able to grow your company.
It’s perfectly acceptable to raise your prices little by little each year to keep up with inflation and other expense-related increases. However, if you’ve positioned yourself as the low-cost provider, raising your prices could lead to significant customer turnover. The best option is to position yourself as a leader in service quality and convenience.
Consistency is important. You should have a reason for charging what you charge. Companies in this business are especially prone to haphazard pricing. When your pricing has no basis, your customers will notice. This inevitably opens you up to a line of questioning in which you have to defend your pricing. If you have no real defense, this conversation ultimately ends with concessions. To be clear, you’re always going to have customers who question your pricing, but having a clear and defensible answer is important.
A few months ago, my dog walking company did a price change and a customer called me to question why it was necessary:
“All you have to do is (fill in the blank), I don’t understand what’s so expensive.”
In a polite way, I was able to explain that while we make it seem like things are smooth and easy all the time, there are expenses associated with making that happen. I listed a few of the things he benefits from, like having a manager to call if he has an emergency, the app he uses to manage his schedule and the insurance we have just in case there is an accident. When your pricing is deliberate, it’s easy to explain to your customer what they’re paying for and why it’s worth the money.
Find Out What Other Professional Pet Sitters Charge
Before you can pinpoint your exact prices, you’ll need to do some research. If you live in a metropolitan area, you should have no trouble finding information. You’ll have plenty of local competition. Do an online search to get an idea of what the dog walking market looks like in your area. This process may be more challenging in rural areas. You may be the only one, or one of just a small handful of service providers. Of course, the advantage here is that you’ll be setting the market price.
Use a search engine like Google and check out the pricing pages for the top 10 results. Make sure you are comparing apples to apples. Most companies offer a 30-minute walk as the standard service. Record the price that each company charges for a 30-minute walk in order from cheapest to most expensive. Find the average and the median. This will give you a good idea of the market in your area.
Scout Works So You Don’t Have To
- Pet owners can conveniently and accurately manage their schedule through the Scout mobile app.
- Smart Charges automatically apply company pricing policies such as late cancelations, weekends, additional pets and more.
- Automated, hands-free, billing saves time and eliminates past due balances.
- Scheduling changes are quick and easy with the drag and drop calendar.
Identify Your Strengths
Now it’s time to look at the value you’re providing. Again, you want to draw your competitive advantage from your stellar customer service and unparalleled convenience, as opposed to being the cheapest option.
Take a look at each of the competing websites you pulled up earlier. Does the website look professional? What about their social media profiles? Does it look like they are engaged with their customers? Rate each company on your list based on your perception of their level of customer service.
What about convenience? How easy is it to book an appointment? The industry is changing. The existence of Wag and Rover, even with all their issues, is proof that people desire convenience. Dog walking apps like Scout can help local pet sitters compete with the big dogs, like Wag and Rover, on technology. Scout apps make it incredibly easy for your customers to schedule appointments, providing a level of convenience with clear market value.
Using technology like the Scout app also helps you save time on administrative tasks. That gives you time to be more personable and engaged with your customers. Now, I know what you’re thinking:
“Wait, you just told me my customers are going to schedule using the app. Isn’t that less personable?”
Good question, thanks for asking! Texting, calling and emailing your customers about scheduling and billing isn’t personable. Spending time sending a birthday card, or making regular calls to check in on customer satisfaction–these extra steps are more personable. They add a lot more value to your brand than a back and forth by text about what “next Tuesday” actually means.
Now that you’ve defined your value proposition, make sure you’re covering your expenses. Write down every expense you have or plan to have. List out the fixed expenses–those expenses that stay the same each period regardless of how many appointments you have–like insurance and rent.
Then list all of your variable expenses. These are things like gas, wages, and supplies. I’m sure I don’t have to tell you, but you’re going to need a ton of poop bags.
Once you’ve compiled that information, you can begin to calculate your prices.
Set Your Dog Walking Prices
Step 1: Figure out how many dogs you can realistically walk.
To start, let’s pick a reasonable number of 30-minute dog walks per weekday. I assume a 15-minute travel time between walks to calculate a reasonable number. It bears noting though that I’m in a city, where things are close together. If your region differs, calculate travel time accordingly.
This is going to be our basis for calculating the rest of our pricing. You’ll want to think about this realistically. In addition to travel time, take into account breaks, how far you can physically walk, and other factors. This is what you would consider a full schedule, Monday through Friday.
Step 2: Calculate your expected monthly expenses
Let’s say your expenses are as follows:
To keep things easy, we’ll assume each month has about 20 weekdays (it’s slightly more but we don’t need to be exact for this example).
Step 3: You need to pay yourself (and your staff)!
You’ll notice I didn’t include wages yet. If you’re a solo walker, you’ll need to decide how much you need to live your best life. When you have staff, it gets a little more complicated. For our example, we’ll use a solo walker who aims to earn $30,000 a year before taxes.
If we add your salary ($11.50) to the expenses ($3.50), we are at $15 per 30-minute dog walk.
Step 4: Assess your advantages
Now think about the value you’re adding: technology, customer service, convenience, etc. Look at the other companies in your area that use pet sitting apps and have great reviews. Are they charging more than $15 per 30-minute dog walk? You’ll need to get a feel for the market, but now you should have an idea of where to start.
Step 5: Set your prices
Let’s say we’ve decided to charge $20 per 30-minute dog walk. Chances are this isn’t the only pet sitting service you provide. Let’s start pricing our other services based on the per-minute price of a 30-minute walk, which is roughly .67 cents. This gives us a starting point for the following popular services:
I tend to charge a premium to those who book shorter service visits. This is because shorter service visits create a scenario in which you have to find more clients to fill the same amount of time. Naturally, marketing to new customers is expensive. It’s also noteworthy that the ratio of travel time to walk time goes up.
For the same reasons, I’ll also give a small discount to customers who book longer service visits. Using the pricing structure example above, I would suggest the following prices:
Evaluating the market and setting prices are both important skills. With more experience in the field, you’ll sharpen and improve these skills. As you do, always be sure to consider factors that add or reduce value. Technology like the Scout Pet Sitting App, continuing education or professional certification can add value to your business and brand. Account for this value in your pricing. If you’re just starting out, you may want to set your pricing on the lower end. That doesn’t mean be the cheapest, but recognize that you have a lot to learn before you can charge a premium.