Veterinary Pricing Guide: How To Set Profitable, Competitive Fees for Your Practice

Key takeaways

This veterinary pricing guide helps vet practices determine how much to charge for services based on factors like cost, market, and value. A structured pricing approach helps drive profitability, support long-term growth, and build client trust, significantly impacting a practice’s overall well-being.

Most small animal practices target net income margins between 10% and 15%. Regularly reviewing your pricing strategy with this figure in mind can help you maintain competitive, sustainable pricing.

What is veterinary pricing?

Pet parents are becoming more and more cost-sensitive. Your practice needs intentional, strategic pricing to maintain a balance between good profit margins and affordable care that keeps clients returning.

Underpricing could prevent you from paying staff the necessary salaries to retain their skills and provide consistent care. Overpricing could drive clients away, rendering your services inaccessible to a large portion of your client base.

This veterinary pricing guide helps practice owners like you apply data, benchmarks, and communication strategies to create confident, transparent pricing systems for your practice’s success. Weave’s communication platform is another tool that practice owners use to simplify veterinary practice operations. Pricing management in your practice becomes simpler with integrated payment tools, automated communication systems, and much more.

Understanding the foundations of veterinary pricing

Veterinary pricing is the system for determining service fees that balance affordability with profitability. Pricing affects everything from staffing and client retention to investment in new equipment, and it is worth your strong consideration periodically.

Fixed, variable, and overhead costs form the basis of accurate pricing.

• Fixed costs include rent, insurance, and other regular expenses that don’t change.
• Variable costs include medications and tests that you do not repurchase regularly.
• Overhead costs include staff training, utilities, and other ongoing costs needed to operate.

Targeting between a 10% and 15% profit margin can support your veterinary practice’s long-term viability. This generally means pricing your services 10% to 15% above operational costs.

However, many factors can influence what pet parents in your area expect to pay for veterinary services. For example, urban pricing is generally higher than rural pricing for veterinary clinics. Competition can also impact pricing, as you want to stay competitive with the clinics around you.

Instead of focusing on cost alone, your practice should focus on communicating value by emphasizing expertise, outcomes, and patient experience. This will help balance prices that pet parents may initially view as high.

Benchmarking and using fee reference guides

The AAHA Veterinary Fee Reference, published by the American Animal Hospital Association, is a great starting point for assessing your practice’s fee schedule. This guide provides data from over 950 practices to help you set competitive fees for more than 500 services. The data covers:

• Median fees for services
• Median household income of the practice’s clients
• Service trends
• Telehealth rates
• Practice size
• Metropolitan status
• And much more

The national averages found in this guide and other resources can inform your pricing strategy, but you should not use them in isolation. Many factors should impact your local pricing decisions.

You can also benchmark other veterinary practices in your area to assess average costs and create a competitive fee structure. Compare competitor websites, community surveys, and public reviews to assess pricing at other animal hospitals.

Scheduling annual pricing reviews using both internal data and external benchmarks can help your practice stay competitive.

Building a profitable fee schedule for products and services

A profitable fee schedule is detailed, accounts for all types of services, and effectively balances service value with pet owner expectations. Your fee schedule should categorize services in a clean, client-facing layout, with categories like:

• Wellness
• Diagnostics
• Surgery
• Preventive care

Veterinary practices use different methods to ensure all costs and margins are covered in a fee structure.

• Cost-plus pricing adds a fixed markup percentage to the total cost, including labor, materials, and overhead, to determine the selling price. Example: If a service costs $60 to provide and you want a 10% profit margin, the selling price would be $60 + ($60 x .10) = $66
• The multiplier model is another way of expressing the cost-plus model using a multiplier. In the example above, the multiplier would be 1.1, indicating a profit margin of 10%. Multiplying the cost of the service by 1.1 leads to the same selling price of $66.

Bundled pricing is also an important consideration for your pricing strategy. Offering discounted packages for certain types of services, such as vaccination packages, can improve the client experience, encourage compliance, and lead to even higher revenue for your practice.

Limited, purposeful discounts, such as for wellness plans or multiple pets, can also improve your pricing strategy. These can encourage client loyalty and lead to more appointments scheduled to take advantage of the discount.

However you decide to price your veterinary services, documenting the logic behind your decision can help ensure consistency and assist with training new staff or managers.

Managing communication and payment options for pet owners

Most veterinary practices need to raise fees periodically to keep up with rising supply costs and maintain profit margins. But pet owners do not always respond well to increasing costs, and some will choose to leave your practice if you do not approach the increase effectively.

Transparent, proactive communication with clients can help soften the blow when you raise prices. You’ll have a foundation of trust with clients that can extend into changes to fee schedules, helping to minimize resistance to this change.

Your practice can consider scripting the ways you convey new pricing for thoughtful client communications. This template can help you create a warm, personable script:

• Introduction/thank you: Start the announcement with a personable statement about your practice values and appreciation for the client, such as “At [Veterinary Practice], we have always sought to provide your pets with the highest quality of care. We sincerely thank you for continuing to trust our dedicated vets with your beloved animals.”
• Announcement: Succinctly announce the change in prices using sensitive language. Example: “To ensure that we can continue offering the same level of service that your pets deserve, we will be making a small change to our pricing, effective [Date].”
• Explanation: Be transparent about why you are increasing services. “This change helps us cover the rising costs of equipment, staff training, and medical supplies, consistent with the veterinary medicine industry as a whole.”
• Expression of gratitude: End the message by thanking the client again for continuing to choose your practice. “We appreciate your continued support through this change and are here to answer any questions you may have about your pet’s treatment plan or service estimates.

If you can, it may also help to link price increases to improved outcomes. Maybe you are raising prices to purchase new equipment or fund new staff certifications. Explaining exactly how pet owners can see their payments benefit their pets can help reduce resistance as well.

For some clients, your new fee structure may no longer be affordable or feasible. Offering financing options or other forms of assistance can help them continue seeing your veterinary professionals and ensure continuity of care. This might include:

• Providing opportunities to pay bills over time, with or without interest
• Allowing clients to pay bills through a method convenient to them, such as text-to-pay
• Offering scholarships, discounts, or voluntary services for those with demonstrated financial need
• Encouraging clients to purchase pet insurance to cover emergency vet visits and other unexpected costs

Clients who can afford your new pricing strategy may not feel positively about paying more money for routine care. Training your staff to discuss value confidently and consistently across your practice can help you convey the purpose of pricing increases and the tangible results clients will see for their pet’s health. Consistent communication policies prevent misunderstandings and reinforce professionalism.

Monitoring and evolving your veterinary costs

Analyzing and updating your veterinary pricing is not a one-and-done strategy. It is something your practice should continually do to ensure that your prices reflect costs, trends, profit margins, and a range of other factors.

As you continually monitor your pricing strategy, paying attention to certain key metrics can help you inform pricing decisions. These metrics might include:

• Revenue per veterinarian
• Average transaction value
• Client retention rate

Reviewing prices semiannually can help you account for inflation and supplier cost increases through your pricing strategy. Your practice should also model “what-if” scenarios to forecast the impacts of pricing on profit margins and client loyalty. For example, if surgical procedure fees rise by 5%, revenue will increase by X% with minimal client loss.

Weave’s Analytics makes it easier to track payment trends and identify revenue gaps. The tool automatically compiles data from your client services and shows you key metrics and data for your business success.

Advanced strategies for competitive differentiation

Your practice can implement advanced pricing strategies to differentiate your veterinary care from competitors. One approach to consider is using value-based pricing rather than cost-based pricing.

• Value-based pricing sets prices for services based on the client’s perceived value of the service rather than the cost for your practice to deliver it. Your practice would determine prices based on what a client is willing to pay, potentially allowing for higher profit margins on services with a higher perceived value.
• Cost-based pricing focuses on adding a specific profit margin, such as 10% to 15%, to the total cost of providing the service. In this strategy, profitability is limited by the cost structure, but it is also more predictable.

With value-based pricing, your team can be more flexible with how you price services, adapting costs based on market changes and client preferences. Even if some prices fall below your desired profit margin, other services will help make up for this deficit. However, cost-based pricing is simpler to implement and offers greater predictability, which is helpful for practice budgeting.

Another advanced veterinary pricing strategy to consider is diversifying income through memberships and add-ons. For example, maybe your practice offers:

• Preventive care memberships, which include one wellness check and physical examination each year, along with a discount on all services
• Diagnostic packages, which bundle various diagnostic tests to help pet parents gain a full picture of their pets’ health, for a discounted price.e
• Telehealth services, which may be applicable for initial consultations or discussions with a vet about an animal’s treatment plan
• Grooming packages that cover quarterly grooming for dogs at a discounted rate compared to paying for each service individually

Having multiple locations can also increase revenue, but it requires a bit more strategizing to ensure consistent yet adaptable pricing. You might need to adjust pricing slightly to account for geographic differences, such as whether the practice is in an urban area or a rural setting. You can reference how corporate or franchise models handle price alignment to inform your own strategy.

Internal benchmarking can reveal which pricing models perform best across locations. Examine key metrics for each location and compare them between practices.

Identifying and avoiding common pricing pitfalls

Veterinary pricing contributes significantly to your practice’s financial success and long-term sustainability. Understanding a few common mistakes and pitfalls veterinarians make in this strategy can help you avoid them.

• Underpricing services to compete: Having the lowest prices in town will likely attract clients, but it can devalue services and strain your practice’s cash flow. You may not be able to pay staff well, leading to poor employee retention that negatively impacts patient care.
• Overly detailed or unclear fee structures: Value-based pricing can become confusing quickly if you include too much variation in fee structures. Clients should generally be able to predict a ballpark figure of how much their services will cost. Complex fee structures can confuse clients and reduce trust, leading them to avoid certain services because they falsely believe they will be too expensive.
• Inconsistent discounting: Discounts you apply to patient services should be clear and consistent. Giving one client a discount that you do not apply to another account can lead clients to leave your practice, resulting in long-term revenue loss.
• Not auditing pricing structures annually: The veterinary industry specifically and the economy as a whole change frequently. Auditing your pricing at least once per year allows you to stay in line with current trends and economic conditions.
• Not training staff about pricing communication: Your veterinary staff should be on the same page about how they communicate pricing decisions and value to clients. Inconsistent communication can spark confusion among clients.

Overall, you should aim to set a clear pricing policy and standardize communication about your fee structure among staff.

Walking through a realistic pricing example

This veterinary pricing guide can act as an example for your practice to base its own pricing strategy on.

A small veterinary hospital wants to adjust the price of a wellness exam for dogs. It begins by assessing all of the costs associated with a typical wellness exam, including:

• Labor from veterinary technicians and veterinarians
• Vaccine costs
• Use of an exam room
• Laboratory costs to conduct fecal tests
• Supplies, such as a thermometer, stethoscope, scale, etc.

After evaluating all costs, the veterinary practice determines that the overhead costs for a well pet visit run around $60.

If using a cost-based pricing model, the practice would then apply a profit margin, such as 10%, to determine the final price of $66. If using a value-based pricing model, the practice would also consider what a client would be willing to pay for this necessary exam and the perceived value. They might decide that $75 per pet better reflects the value of the service.

A wise next step would be comparing the results of their analysis to both local and national benchmarks to validate competitiveness. A comparison with the AAHA data can help inform national benchmarks. Calling around to different practices in the area and asking about their prices for a wellness visit can help evaluate local competitiveness.

With all of this information in mind, the veterinary practice can determine the final cost of the service. It deems $75 to be a reasonable price by local and national standards that allows for a slightly higher profit margin than other services do.

This thoughtful process can promote your practice’s financial health while maintaining client trust.

Planning for a profitable practice

Following the right veterinary pricing strategy is important to running a sustainable and profitable practice. By basing your strategy on data, you can promote client satisfaction and business longevity, striking a balance that keeps clients returning to your practice.

The first step in optimizing your pricing structure may be to conduct an audit on your current pricing. Use the veterinary pricing guide above to assess whether your client costs meet the necessary criteria for retention, overhead, and profitability.

Weave helps veterinary practices like yours simplify pricing and client billing. With comprehensive features like payment automation, financial reporting, and client communication tools, your front desk staff can save time while promoting convenient payment methods for clients.

Explore Weave’s veterinary solutions to streamline billing, reminders, and client retention. Request a demo today to learn more.

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