Are You Losing Money? Smart Rates & Policies

You’ve heard of “death by a thousand cuts”? The phrase can be traced to lingchi, an ancient Chinese form of torture in which the victim was…well, we’ll leave it to your imagination. Suffice to say it wasn’t a quick way to go. We know you’d never subject yourself to such a thing. But what about your business?Keep more of your money with smart rates and policies

Sometimes it’s not the biggest mistakes that do the most damage. Too often we see dog pro businesses suffer from a thousand tiny wounds, decisions about policies and services that lose you money every single day. Add those days up, and we’re not talking small change. We know you could put that money to good use, so here are a few suggestions designed for your protection.

It’s tempting, when first starting out as a dog pro, to aim your sights a little low. Your marketing and word of mouth haven’t had sufficient time to draw in business. Giving the first few clients a break on your rates may seem like a good idea.

But you could be painting yourself into a corner. These first clients may refer business your way, but they’re liable to share news of your low rates as well. When you realize your rates need raising, it could make subsequent sales more difficult.

Sometimes dog pros are slow to raise their rates at appropriate times, falling behind the local going rate, and training their clients to expect the status quo. It’s particularly important if you offer ongoing services—daycare, walking, boarding, for example—to raise rates a little every year or two, giving your clients plenty of written notice, rather than putting it off and finding yourself in the awkward position of needing to announce a much bigger raise all at once to catch up.

If you find yourself in that position, no fretting. It’s a fixable problem, and we’ve worked with many clients in this position. But here’s the thing: there’s no time like the present. The sooner you fix your rates, the sooner your business will improve. The longer you put it off, the harder it’ll be on you and your clients.

And if you’re worried about losing clients, this might help: In our experience coaching clients through this process, we’ve rarely seen more than two clients lost; often there’s no loss at all. Meanwhile, the higher rates loyal clients pay offset any temporary losses.

Payment Policies
We recommend an up-front payment policy for all dog professionals.

Trainers: Most trainers already require up-front payment. And accepting credit cards allows clients to sign off on the right size of training package needed to meet their goals. Credit cards also allow you to offer low-risk payment plans to further incentivize clients to pursue training. Discuss and arrange a schedule of preauthorized charges to assure that you’ll be paid on time, and to save yourself the hassle of endless invoice cycles.

Walkers and Daycares: Ask for monthly up-front payments. Rather than asking clients to pay for services rendered, charge them to reserve a spot among the limited number of dogs you can take on. We discourage the use of a pass system (the practice of selling a certain number of sessions to be used at the client’s discretion). Such systems make income difficult to predict and staffing difficult to schedule, implies to clients that exercise and socialization is optional, and requires ongoing social navigations among your changing roster of dogs. Instead, have clients pay monthly and commit to set days each week. Also require a minimum number—no less than two—to reduce the impact of under-exercised dogs on you, your staff, and the other dogs in your care.

Sitters and Boarders: Ask for up-front payment at time of reservation, like a hotel, where people expect to hold a spot by giving their credit card number or paying in full in advance. This policy also deters abandoned dogs.

Discount Policies
Compassion for clients can lead to giving out too many discounts. Avoid overly generous discounts when a much smaller one would give clients the same psychological benefit.

Remember: the central purpose of a discount should be to increase your overall revenue. Before giving a discount, ask yourself: What is the purpose of this discount? Why am I giving it? Will giving this discount drive more business my way? How? If you can’t easily, soundly answer these questions, you probably shouldn’t give the discount.

Sometimes we give discounts for customer service reasons. We might want to thank a client for their referrals of friends and families. Or show our remorse over a mistake. Think of these as brand loyalty discounts. They’re part of running a thoughtful, caring business. But be judicious. Handing out too many can mean significant revenue losses.

Cancellation Policies
The purpose of a cancellation policy is to protect you against revenue loss. If your policy isn’t fulfilling that purpose, it’s time to revise. We commonly see new clients losing $10,000 a year or more from weak cancellation policies.

Trainers: Don’t allow cancellations. Training requires consistency and commitment. Your policy should state that cancelled appointments are automatically charged and rescheduled. Clients will then get the full complement of sessions, dogs benefit from a complete training plan, and you’ll earn your full income.

Walkers and Daycares: If a no-cancellation policy feels too strong, try a vacation allowance. For example, give clients ten days a year where they can keep their dog home for any reason—illness, vacation, whimsy. But any additional days after that should be charged. Child daycares, which charge monthly rates regardless of attendance, don’t allow cancellations. They have a limited number of spots and parents reserve one for their child when they register. Dog daycares need to move toward this model to avoid the heavy revenue losses the current systems, including pay-as-you-go, passes, and packages incur.

Sitters, Boarders, and Groomers: Consider a policy that allows advance cancellation with a processing fee. Make a realistic assessment of how much time you need to fill a cancelled spot, be it 72 hours or two weeks, and stick to it.

For all dog pros, decide up front what constitutes an exception to your cancellation policy, and don’t waver. You run a business, not a garage sale. Unless you make it punitive for people to cancel, and then follow through, you train them to ignore your policy.

Scheduling Policies
Trainers: Don’t allow your clients to dictate your schedule. Asking “what time is good for you?” leads to chaos for you, with small batches of time throughout the day that are difficult to put to productive use. Instead, offer pre-set slots. Doing so projects a successful business, and starts you out on the right foot with clients who acknowledge your status as a professional and the value of your time.

Daycares and Boarders: Give set pick-up and drop-off times. Failing to do so means chaotic days, with restless, unsettled dogs, and more staff needed more hours of the day. Daycares, consider charging a fee for missing these times, but a fee large enough to deter, not to encourage a regular practice. Boarders, don’t allow pick-ups after a certain hour, especially if you board from home. Instead, keep the dog overnight and charge for the extra day. Your private hours are too valuable not to protect.

Dog walkers and Sitters: If you ask each client for their preferred pick-up or visit time, every one will say, “noon.” You can’t run your business on that model. Instead, let clients know when you’ll be visiting their dog, giving a range so you can adjust your schedule and handle the unexpected as needed.

Communicating Your Policies
Put your policies in writing in your contract, using plain English, and go through them with new clients, asking them to initial each policy section. Practice your verbal delivery of all your policies to combat your qualms of offending the client. And put your marketing spin on: You have these policies in order to maintain your commitment to small walking groups, or to allow for a high daycare staff-to-dog ratio, or to allow you to take and concentrate on a small number of training cases at a time, or to keep your boarding facility small for lots of one-on-one attention. In other words, tell me why your policies are actually good for me and my dog.

Getting Started
Review your policies right now. Are they working for you day-to-day? How about monetarily? Pick a three-month period and add up what you’ve lost to cancellations, discounts, pass systems, and the like. Multiply by four to get the yearly total. The number will probably surprise you.

Decide what changes you’d like to make and add them to your contract. Draft a letter to share your new policies with your current clients, remembering that point about spin.

Then put it on your calendar to revisit your policies each year to check that they are in line with your practices and services—and that they’re still working for you.

It’s time to stop losing money. Heal those tiny cuts with strong policies and protections, and help your business grow.

Want some help or guidance creating smart rates and policies for your business? Join us for Money Matters 101: Pricing, Policies, & Packages.