When creating your offers, you will want to leverage pricing to best take advantage of the psychological principles we mentioned earlier. For many customers, pricing is a primary driver of their perception of your services and value.
At Goose, we’re big fans of utilizing dynamic pricing instead of fixed pricing. Dynamic pricing, paired with other revenue management principles, will help you maximize the value from each pet visit. We wrote an entire guide on revenue management, so we encourage you to learn more about the topic here. In this section, we’ll discuss general pricing principles that you will want to consider.
Principle #1: Create Tiers
Develop offers that cater to different price points to target the range of customers you hope to service. If you serve a wide variety of customer segments, this might mean a wide difference between your least expensive and most expensive offer. Conversely, if you have a fairly homogenous customer base, you may have a smaller gap between your most expensive and least expensive offer. Once you’ve established that gap, create pricing tiers that match your customer segments.
While offering more price tiers theoretically accommodates customers with diverse price sensitivities, I strongly advise against excessive tiering. Every additional offer creates more decision-making fatigue for customers. Instead, decide what offer and price combination you most want to sell and build your tiers around that.
Principle #2: Align Pricing with Brand
Choose a price range that aligns with your brand identity. In other words, if you’re a pretty basic boarding facility with one room type, it doesn’t make sense to offer a high-end luxury offer loaded with things that your customers will never buy. Conversely, if your pricing is too low relative to what you are offering, it might cause customers to undervalue your offer or it may be communicating that the offer is too good to be true.
All that being said, I encourage you to stretch yourself (within reason) when it comes to the higher end of your range — you may be surprised by what customers are willing to pay, and you won’t know until you try.
In the world of pet care, pricing holds a lot of power in shaping customer perceptions and driving value. Utilizing dynamic pricing strategies alongside other revenue management principles can optimize the returns from each pet visit - a methodology Goose wholeheartedly endorses. While this discussion has focused on general pricing principles, our journey doesn't end here. In my next article, we'll get into the art of marketing and selling your offer, exploring strategies to effectively reach and engage your target audience.
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