In the pet industry, it’s important to regularly perform marketing research and know what the industry standard is for products or services like yours. Industry trends are important to help us plan pricing strategies and know when and if we can charge a premium. For example, this article from Forbes shares how “People may be feeling the squeeze on their finances, but when it comes to their pets, they are prepared to spend,” and they share that 7 out of 10 pet parents are willing to spend more on luxury items for their pet than for themselves. Knowing this, let’s talk about factors we can focus on with our brand to build brand equity with price premiums.
Factors that Influence Pricing
Several factors influence pricing decisions, like variable and fixed costs, what our competitors charge, consumer demand for our product or service, and the perceived value of our brand. More pet parents are emotionally attached to their pets and willing to spend more for premium products and services. As the economy changes, brands need to adjust with our industry and those around us. If it costs us more to produce our products, then it’s time to consider raising our price to the consumer. If you want to position yourself as the most affordable option as a brand, that is okay; a target market needs the most affordable option, especially in the current economic times.
Price Premiums for Brand Equity
Having worked in the professional pet care sector with my business Aussie Mom Pet Sitting LLC, I know first-hand how important it is that when I see other brands I network with raising their prices, I ask myself if it is time to raise mine. Pricing is not just about covering your costs; it also reflects your brand’s position in the market. Premium pricing can enhance brand perception to attract a loyal customer base, lead to higher margins, and help cover market fluctuations as the overall economy changes. Having been in business for nearly a decade and being well-known in the local community, I have made sure to position my brand as a superior provider in the industry. I am not trying to be the most affordable option compared with my competitors; I like to place myself in the middle of the pricing bracket when customers are weighing their options. My target audience is pet parents who understand the value of quality care, not necessarily those just looking for the least expensive option. I know I have the experience and loyal customer base to support my brand having premium pricing, so I use this knowledge to help grow my brand equity.
Justifying a Price Premium
Does your brand have premium-quality products? Do you offer specialized veterinary services? Do you use natural ingredients in the pet food you provide? Do you offer services like a day at the local gardens rather than a simple dog walk around the neighborhood? These specialty offerings can help justify charging a premium for your brand’s products and services. You can also provide exceptional customer service by remembering pets’ names and birthdays or the pet parent’s name and birthday. Treating customers like family in this sense helps small businesses build loyalty with their customers and have that connection with customers that keeps them coming back time and time again.
Premium Pricing Done Right
Think about brands in the pet industry that you wouldn’t mind paying a premium for because you know they have high-quality products or services. Chewy has an auto-ship feature that allows pet parents to have the convenience of having their pet’s food shipped to their door on a regular basis; many consumers are willing to pay a premium for this service. Ruggable, is revolutionizing the market with their washable residential rugs, with their 2-piece rug system allowing pet parents to remove the top layer of the rug and wash it when pets have an accident, making their lives easier. The Farmer’s Dog is another company pet parents are willing to pay a premium for to have their pets get healthy, freshly made dog food delivered right to their door. Are we starting to see how developing brand equity and communicating value can help us gain loyalty amongst our customers and, therefore, allow for our brand to create pricing strategies that would enable us to charge a price premium?
Challenges to Consider When Charging a Premium
It is important to know our target audience before publishing pricing changes because there will always be price-sensitive consumers who may look towards competitor brands when we do this. Implementing marketing strategies to showcase the value of our offerings will allow us to keep customer value perceptions positive towards our brand. It is okay to offer everyday low pricing strategies if you plan to always check the market and know that you offer the lowest prices. Just know that if customers find the price lower elsewhere, they may lose their positive perception of your brand. You will risk losing their loyalty because your offerings are no longer truly the lowest prices. On the other hand, it is important to have consistent brand messaging and quality if you are going to optimize your pricing strategies properly and charge a premium.
Now that we have discussed premium pricing and pricing strategies, do you feel your brand equity allows you to charge a premium for your products or services? Following up with customers after implementing these strategies is important to understand your customer satisfaction and if they continue to have loyalty to your brand. You can also analyze data to see what kinds of trends are happening and if repeat purchase rates are increasing or decreasing. The most important thing to also check to keep current in the market is your volume and value market share, so you can not only know your current positioning in the industry but also know when you might be able to raise your premium pricing again.
Did you enjoy this post? Read about “Using Brand Packaging to Reinforce Your Brand Identity in The Pet Industry” in my last post!”
