Setting veterinary fees is a perennial topic of discussion within the veterinary industry, and with good reason: much of a practice’s success hinges on deploying the right pricing strategy.

Some pricing methods may lead you to undercharge for your services and make the costly mistake of leaving money on the table. Other fee-setting strategies may lead you to overcharge and lose customers to less expensive competitors. Obviously, the goal is to implement a strategy that keeps prices within an elusive sweet spot that maximizes revenue while still being competitive enough to keep your customers happy.

The conundrum that practices face is actually knowing where their pricing lands. How do you know if your fees are too low or too high? How can you be sure your fees strike that perfect balance of fairness and profitability?

The truth is that you can never fully understand and gain control of your pricing until you’ve adopted the right pricing strategy.

Selecting The Right Veterinary Pricing Strategy


When it comes to setting service fees, there are a handful of strategies from which to choose:

  • Historical – pricing is made based on the historical anchor prices that customers already know
  • Competitive – service fees are set to keep pace with competitors in the area
  • Benchmarks – prices are modeled after benchmark pricing data
  • Variable – fees aren’t fixed and are adjusted based on the service, customer, time, and offering
  • Value-based – prices are set according to the customers’ perceived value of the service
  • Cost-plus – prices are established based on the cost to perform the service plus a profit margin

While all of these strategies have their merits, only one gives you the ability to ensure your fees fall within that perfect pricing sweet spot: cost-plus.

What makes the cost-plus pricing strategy different than the others?

First, the cost-plus approach uses a formula to calculate prices. And just like any other math problem, there is actually a correct answer. With cost-plus pricing, you will always know your break-even price and your profit-margin price.

Put simply: there’s no guesswork. All the other approaches to pricing are based on speculation with little to no definitive answers.

Cost-plus is a scientific, objective way to set fees.

An objective pricing methodology is important because it is both fair and defensible. If customers can’t easily understand the logic behind your prices, then they aren’t very likely to think you’re being fair.

This is where the historical, variable, and value-based pricing strategies miss the mark.

Customers appreciate concrete, logical pricing that is easy to understand, and cost-plus is the only pricing method that meets this vital criterion.

Second, cost-plus pricing is tailored to your practice. No two practices have exactly the same costs, so no two practices should have exactly the same prices. This is why using benchmarks and competitive pricing fall short; they’re essentially a gamble that the prices that work for a completely different practice with completely different costs will work just as well for yours.

Furthermore, since copycat pricing strategies aren’t based on your specific costs, there’s no way of accurately assessing whether your fees are low, high, or just right. You could be grossly undercharging for some services and severely overcharging for others all without ever knowing it. With cost-plus pricing, you have complete control because you can always adjust prices to match any corresponding changes in costs.

The Danger of Settling For What Seems To Work

As far as fee-setting strategies go, cost-plus is the gold standard. However, just like the gold standard of veterinary care, the cost-plus pricing strategy isn’t as feasible as other more accessible, albeit lesser, alternatives. This is why many practices find some sort of pricing strategy, often times a combination of multiple strategies, and just stick with it as long as it seems to work.

So therein lies the problem. Using a pricing strategy because it seems to work is entirely different from using a pricing strategy because you know it works.

Plenty of practices are profitable without knowing exactly why they’re profitable.

They don’t know which individual services are profitable and which are actually unprofitable. They don’t know what kind of results they could get if they sold more of one service and scaled back on another. They don’t know which fees to increase and by how much so they can cover new costs like a recent hire or an increase in rent.

This is a risky place to be.

Without a deep and clear understanding of exactly why your fees are making you profitable, you can never truly tame pricing once and for all.

You’ll never be able to adjust your fees in an informed way and know exactly what kind of impact it will have BEFORE you make the change.

Every pricing tweak will always be a guessing game.

One wrong adjustment and you could unwittingly disrupt the delicate pricing ecosystem that had seemed to work so well.


The beauty of cost-plus pricing is that it gives you complete control of your pricing and lets you set fees with confidence. Knowing which pricing levers to push is how you can reach that sweet spot of maximum revenue and customer retention. It’s the only way you can guarantee success for your practice.

But cost-plus pricing has a major drawback: setting it up is incredibly time-intensive. When done manually, implementing a cost-plus pricing strategy for service fees can easily take months.

That’s why we automated and streamlined the process. We created Profit Solver so that veterinary practices could implement the gold standard of pricing strategies and experience unprecedented control over pricing in less than 8 hours. We work with practices who don’t want to settle for less when it comes to setting service fees.

If you want to finally get control of your pricing, then book a one-on-one call with our CEO, Steve Castillo. You can run any questions by Steve and learn more about how you can reap the benefits of a cost-plus pricing strategy in your practice.