Clients are more price-sensitive than ever. You still need to raise your fees.
81% of veterinary practices report that clients are more price-sensitive than in 2024. Clients are asking about costs before booking, declining recommended treatments, shopping around, and — increasingly — choosing online pharmacies over in-house dispensing.
The natural reaction is to hold prices. Don't scare anyone away. Keep the schedule full. Compete on affordability.
That reaction will kill your practice. Slowly, quietly, but mathematically inevitably.
Why holding prices is more dangerous than raising them
If your costs went up 6–8% this year (and they did — labor, supplies, rent, insurance) and your fees stayed flat, you just took an involuntary pay cut of 6–8% on every service you deliver.
On a $1.5M practice, that's $90,000–$120,000 in annual margin that evaporated. Not because you lost clients. Not because anything visible changed. Just because your costs rose and your prices didn't.
Only 46% of small employer firms were profitable in 2024 (Federal Reserve). The practices that hold prices to avoid uncomfortable conversations with clients are the ones joining the unprofitable majority.
Price sensitivity doesn't mean what you think it means
When clients are "price-sensitive," most practice owners hear: "They'll leave if I charge more." That's not what the data says.
What price-sensitive clients actually want is visibility and predictability. They want to know what they'll pay before they commit. They want to understand what they're paying for. They want to feel like the fee is fair and transparent.
They don't want the cheapest vet. They want to not be surprised.
The practices losing clients to price sensitivity aren't losing them because fees are too high. They're losing them because fees feel unpredictable and unjustified. The exam was $55 last time and $65 this time, and nobody explained why. The invoice had three line items the client didn't expect. The total was 40% higher than the estimate.
What fee transparency actually looks like
The practices that successfully raised fees in a price-sensitive environment did three things:
They published their fee schedule. Not hidden behind the reception desk. Available on the website, in the waiting room, and in pre-visit communications. When clients know the price before they walk in, sticker shock disappears.
They communicated fee changes proactively. A letter or email explaining: "Our costs have increased X%. To continue providing the quality of care your pets deserve, our fees are adjusting Y% effective [date]." Most clients respect this. The ones who leave over a 10% increase were price-shopping already.
They presented treatment plans with clear costs before proceeding. No surprises at checkout. The client sees the estimate, understands the options, and approves before anything happens. Declined treatments are documented and followed up on — professionally, not pushy.
The math on the clients you'll "lose"
Practice owners overestimate attrition from fee increases. Studies consistently show that a 10% fee increase causes 1–3% client attrition in well-managed practices. Let's do the math:
- $1.5M in revenue, 10% fee increase = $150,000 in additional revenue
- 3% client attrition = $45,000 in lost revenue
- Net gain: $105,000
You gain $105,000 and lose the most price-sensitive 3% of your clients — clients who were the most likely to decline recommended care, shop around, and generate low-margin visits anyway.
The practices that don't raise fees keep 100% of their clients and lose $90,000–$120,000 in margin from cost increases they absorbed. Which sounds worse?
How to know if your fees are right
You need two numbers: your cost to deliver each service and your target margin. If your exam costs $48 to deliver (fully loaded: doctor time, tech time, room, supplies, overhead) and you're charging $55, you're making $7 per exam. At 25 exams a day, that's $175 in daily profit from exams — before anything goes wrong.
Most practices don't know their cost to deliver. So they set fees by benchmarking against the practice down the road — who is also guessing.
See where your fees stand against your actual costs
We pull your practice data and calculate your real cost to deliver each service type. We show you which services are profitable, which ones are at cost, and which ones you're losing money on. Then you can set fees with confidence instead of guessing.
Call (507) 577-5982 or book a discovery call.
15 minutes. Free. No pitch.
See how we work with veterinary practices, or learn about our full process.