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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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In the rapidly evolving veterinary technology landscape, clinic owners and managers face critical decisions about the software that powers their practices. One of the most impactful decisions revolves around how you pay for these systems. Usage-based pricing has emerged as a popular model for veterinary clinics SaaS, but is it always the right choice? Let's explore when this pricing strategy delivers value and when it might create unexpected challenges.
Understanding Usage-Based Pricing in Veterinary Software
Usage-based pricing (sometimes called consumption-based pricing) is a model where veterinary practices pay based on their actual utilization of the software. This could be measured through various pricing metrics like:
- Number of patient records processed
- Quantity of invoices generated
- Volume of appointment bookings
- Number of active users
- Data storage requirements
Unlike flat-rate subscription models, usage-based pricing scales with your practice's activity levels. According to OpenView's 2022 SaaS Pricing Survey, 45% of SaaS companies now offer some form of usage-based pricing, up from just 34% in 2020.
When Usage-Based Pricing Benefits Veterinary Practices
1. Growing Practices with Fluctuating Patient Volumes
For clinics experiencing growth or seasonal fluctuations, usage-based pricing can provide financial flexibility. A study by Veterinary Practice News found that practices experience up to 23% seasonal variation in patient volume depending on location and specialty.
Dr. Sarah Miller, owner of Lakeside Veterinary Hospital, shares: "When we expanded from two to five veterinarians, our traditional SaaS subscription costs would have tripled overnight. With our usage-based practice management system, our costs increased gradually with our revenue growth."
2. Multi-Location Practices Seeking Operational Efficiency
Veterinary groups managing multiple locations often benefit from usage-based pricing that allows them to optimize software usage across their network. This model enables enterprise pricing arrangements that can accommodate varying needs across different practice locations.
3. Specialty Clinics with Unique Workflows
Specialty and emergency veterinary clinics often have distinct operational patterns compared to general practices. Usage-based pricing allows these clinics to pay for what truly matters in their specific workflow.
"As an emergency-only clinic, we have intense periods of activity followed by quieter times," explains Dr. James Wong of 24/7 Pet Emergency. "Usage-based pricing aligns perfectly with our revenue patterns."
When Usage-Based Pricing Creates Problems
1. Unpredictable Monthly Costs
Perhaps the most significant drawback of usage-based pricing is budget unpredictability. According to a survey by VetSuccess, 67% of practice managers cite "predictable operating costs" as a top financial priority.
Practice Administrator Jennifer Santos notes: "We abandoned our usage-based laboratory software after six months. The monthly cost variations made it impossible to budget effectively, and we sometimes found ourselves limiting necessary tests to control costs."
2. Misaligned Value Metrics
Not all usage metrics accurately reflect the value veterinary practices receive from software. For instance, charging based on the number of appointments might penalize efficient practices that see more patients in less time.
3. Complexity in Understanding True Costs
Many usage-based models implement price fences and tiers that can become confusing. A 2023 survey by Veterinary Innovation Council found that 58% of veterinary professionals reported difficulty understanding the true costs of their technology solutions when pricing models included multiple variables.
Finding the Sweet Spot: Hybrid Models for Veterinary SaaS
Many successful veterinary software providers have found that hybrid pricing models offer the best of both worlds:
- Core functionality at a predictable subscription rate
- Usage-based components for specific high-value features
- Value-based pricing for premium capabilities that directly improve practice profitability
Dr. Michael Chen of Modern Veterinary Solutions explains: "We implemented a hybrid model with base subscriptions for each role plus usage-based pricing for specialized diagnostics integration. Our clients appreciate knowing their baseline costs while having the flexibility to pay for advanced features as needed."
Strategic Considerations for Selecting the Right Pricing Model
When evaluating veterinary clinics SaaS options, consider:
Budget Certainty vs. Flexibility: How important is predictable monthly spending to your practice?
Growth Trajectory: Rapidly growing practices might benefit from usage models that scale with their success.
Operational Patterns: Does your practice experience predictable or highly variable workflow patterns?
True Value Drivers: Identify what aspects of the software deliver the most value to your practice.
Discounting Structure: How does the provider handle volume discounts as usage increases?
The Rise of Value-Based Pricing in Veterinary Software
A noteworthy trend in veterinary SaaS is the shift toward value-based pricing, where costs align with measurable outcomes like increased compliance rates, improved client retention, or enhanced average transaction values.
"The most progressive veterinary software companies are moving beyond simple usage metrics to pricing based on how much additional revenue their solution helps generate for practices," notes veterinary business consultant Emma Rodriguez.
Conclusion
Usage-based pricing can be either a powerful ally or a frustrating obstacle for veterinary practices depending on their specific circumstances. The ideal approach often lies in finding a veterinary clinics SaaS provider that offers transparent pricing aligned with your practice's operational realities and growth ambitions.
Before committing to any pricing model, have detailed conversations with potential providers about how their pricing structure would apply to your specific practice patterns. Request sample calculations based on your actual or projected usage to avoid surprises.
Remember that the right pricing model should feel like a partnership, growing with your practice rather than becoming an obstacle to your success.