How Much Should You Charge for a Pet License?

We will be diving into the 5 Ps of Pet Licensing by discussing Price, Product, Policy and Place. The first of which we will be reviewing is everything you need to consider when deciding how much to charge for a pet license, including:

  • market standards,
  • the cost of production,
  • and value to the customer.

Market Standards

The most common method used by Pet Licensing Organizations to determine fees is to analyze the prices of similar and surrounding jurisdictions. In early 2019 we conducted a North America-wide study of the Pet Licensing Industry and did exactly that. We compiled data on over 600 pet licensing programs to obtain regional averages regarding a variety of program attributes. We believe that this data is useful to help PLOs assess how their program compares to national, and state/provincial averages. As part of this work, we aimed to better understand the prices pet licensing organizations charge pet owners in their communities.

Cost of Production

Despite the usefulness and ease of looking at the status quo, it is not always the best methodology to price your service. It’s also important to ensure that you’re accounting for all of the costs that go into providing a Pet Licensing Program. Due to the heavy emphasis on the societal benefits of pet licensing, many communities ignore the potential source of revenue pet licensing can produce to subsidize the costs of animal services. Therefore, Pet Licensing Organizations often experience low revenues or even deficits, once all the costs of providing a licensing program are accounted for.

In order to truly ensure that your Pet Licensing Program is worth more than it’s costing you, it’s important to conduct frequent cost analyses. We’ve laid out a very basic example including some of the most frequent costs we see incurred in relation to pet licensing programs and encourage all Pet Licensing Program Managers to add any of their own unique fixed and variable costs to add accuracy. Once you’ve determined your average cost per license, you’ve discovered the bare minimum you can charge for a pet license in order to achieve break-even.

Value to The Customer

Lastly, it’s principal to keep in mind what motivates a buyer: cost vs. value. If the pet owner gets value from their license, the cost is trivial. Sharing the stories of your organization, connecting the license fee to the animal care work it supports and advocating that a tag is a symbol are some of the best ways to enhance the perceived value of a pet license.

However, often the perceived value is lost when trying to explain it through multi-tiered fees and ordinances. It’s important to make your pet licensing program as simple as possible so that you can spend less time explaining your fees, and more time communicating the value of the license itself.

Food For Thought:

Imagine if you were to order a burger at a restaurant, and after you place your order, the cashier asks you 15 questions back about your order and depending on your answer to each question you receive a separate fee. After about 10 minutes, you start to become frustrated and simply just want your meal, the thing you originally came in to order. When we compare this line of thinking to standard pet licensing, you can see why pet owners often become frustrated (or refuse to license at all) when all they really want is to keep their pets safe and happy.

So, thinking about adjusting your fees? Instead of attempting to charge the right price for the market, we want you to charge the right price for the service. Consider matching your new fee schedule to regional averages to manage pet owner expectations (but keep your financial goals in mind as you do). Implementing a proper costing analysis is essential to managing a successful pet licensing program but try to keep your prices in conjunction with the market trends and the pet owner’s perceived value.