Since our formation in 2014, DocuPet has been taking a measured look at how traditional pet licensing programs have been performing all across North America. We found that just 23% of dogs are licensed, even though 90% of communities have compulsory licensing requirements and 60% of funding for local animal care and control comes from pet licensing revenue.
DocuPet’s mission is to help pet licensing organizations raise that compliance (by selling more licenses) so that local animal care and control in our partner communities is better funded and supported. If you are like us – you will agree that a 23% compliance rate isn’t good enough.
Unfortunately, raising compliance is easier said than done. There are often unexpected costs to selling more licenses that put a lot of added risk on municipal budgets – and in turbulent times, it is simply impossible to take that risk. Let’s first remember what actually drives an increase in license sales:
- Improved and expanded annual renewal notices, and
- Marketing efforts that are more robust, not unlike how a philanthropy engages a donor base.
The Cost of Growing a Renewal Communications Program
Far and away the most effective tool to securing the sale of a pet license is the direct notice sent to a pet owner reminding them to renew their active license. Consider this: if you were to maximize your renewal rate – the worst that can happen to your compliance is that it remains the same. We know however that traditional programs are not maximizing their rate as pet license sales in average licensing jurisdiction are decreasing year over year.
So is the solution simply to send more letters? Not quite. Ask yourself two things first:
- For every letter that you send, do you anticipate 1 license sale in return? Certainly not – letters get missed, avoided, or people move or are out of town.
- Do you have email addresses in your database and can you save some money by not needing to print letters? Most traditional licensing programs fail to ask pet owners for email addresses. This is a big opportunity to drastically reduce costs, as sending an email is essentially free compared to the costs necessary for letter supplies and postage.
You can see now that simply sending more letters is a surefire way to increase your costs rapidly for a return rate that is in no way guaranteed. Pet licensing organizations must focus on improving letters and making sure to find less expensive ways to communicate with pet owners, or else the financial risk in expanding their program will not support the results.
The Cost of Expanding (or starting) Marketing Efforts
A highly effective way of encouraging the sale of new licenses is to market your pet licensing program and its benefits to your community. If you are like the traditional program, you may already be buying newspaper ads or radio spots to announce the local licensing requirements, or to share information about how a license provides a free ride home for lost pets.
Similar to mailing out letters however, consider if every dollar spent on marketing produces one new license sale for you. The reality is that it takes many dollars invested in marketing to produce just one license sale – and the only real way to increase the conversion rate is to do months of testing and research on which messages are successful against different demographics of people. We don’t think, given the budgetary environment many municipalities are operating within, that investing in this high level of marketing science is going to be deemed possible despite its potential to raise license sales and revenues.
So what does this mean for your compliance growth future?
Investing in compliance growth is expensive and in a traditional program the costs actually increase per license sold over time. It doesn’t have to be this way though. DocuPet’s social enterprise financial model is built to actually reduce your per license costs overtime, while increasing compliance and completely reimagining what a license can do for pet owners in your community.