434: Affordable vs Cheap Services in a Slowing Economy
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How do spending habits change in a slowing economy? How should we respond? We break down possible options for making your business and services more valuable to your clients. It’s not about being cheap, it’s about finding an affordable way of serving our clients. There are pros and cons to consider when offering a more affordable option in your service line-up. Everything from a possible wider market appeal, to administrative overhead, you must have a clearer picture of whether introducing a more affordable service aligns with your business goals, the needs of your target market, and your operational capacities.
Main topics:
Spending Habits
How we can respond
Affordable services?
How to know if it’s a good fit
Main takeaway: Affordable services can still mean high quality, it’s all about how to shape and market them to the right people.
Links:
https://www.forbes.com/advisor/investing/is-a-recession-coming/
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
clients, service, offering, affordable, pet sitters, business, pet, market, cost, more affordable option, price, visit, walk, economy, potentially, existing clients, slowing, options, budget, work
SPEAKERS
Collin, Meghan
Meghan 00:03
Hello, welcome to pet sitter confessional an open and honest discussion about life as a pet sitter. Thank you to our sponsors, pet sitters Associates, and our lovely Patreon members for supporting today's show Patreon members give a little bit of their hard earned pet sitting and dog walking company money each month, and they want to see the podcast continue. So if you have listened to any of the over 400 episodes and want to support the show as well, you can go to pet sitter confessional.com/support, to see all of the ways that you can keep the podcast going. If you try to keep up with the news and look at market trends, you probably know that we are potentially in a recession right now, depending on who you talk to the answers can vary. We've included some articles from Bloomberg, The Guardian, and Forbes covering the topic from both sides down in the show notes. So check those out if you are interested in that. The reality is though that whether we're technically in a recession or not, it's something that we need to be prepared for. Because cycles do happen. This does happen because when the economy starts to look uncertain, people are going to do several different things, including the upper middle class and more affluent clients. So it's important to focus on them since those are who many of us target or are already our clients.
Collin 01:17
So how did they and how do people in general, our clients? How are they going to start changing their purchasing decisions? In a slowing economy? Well, one, there's gonna be an increased overall caution in spending, they are going to look at their discretionary spending. And this is going to make them think twice on those luxury goods, the vacations that we're going to take or going to the high end dining and other what they deem as non essentials. And again, this is unique for every single person. So as we walk through this list, it's not saying this is how everyone behaves. But this is just general trends of what kind of decisions people make when they look at their budget. Look at the shrinking finances are a slowing economy, and they don't have growth potential ahead. What are they going to do with that,
Meghan 01:59
they're also going to not purchase as many big things, maybe no new car or new home, those big ticket investments aren't going to be in their pocket anymore. They're also going to cut costs. Even affluent households might look for ways to cut costs, maybe use coupons more, or downsize their living arrangements. Even looking at more fuel efficient vehicles, the rise in electric cars is through the roof right now. During an economic downturn, clients might also focus on the value of something that they're going to get for their money. So if they perceive that their money is going further, because they're getting a lot out of something, they're going to be more likely to purchase it
Collin 02:36
in slowing economies, there tends to be a surge in things like nationalism, or a pride of local economies and local businesses. So supporting local becomes really important whenever the economy slows down, whether that's locally or globally. So there's a shift towards supporting local businesses, products, and the people that they know and interact with on a daily basis, will also start searching for experiences versus material goods. So there's this growing trend among the athletic just everybody in general have value, they want more experiences more than stuff in the corner. And again, thinking more local if overseas travel or long distance travel is very cost prohibitive or not quite in the budget, as people look to cut those costs, they may try and find local experiences, local venues, local bands, those kinds of things, too, versus just going out and buying more stuff.
Meghan 03:26
For us as pets, any businesses when a slow economy comes, we want to grow our client base as much as possible, because that means that more people potentially need our services versus just a little bit because we don't have a lot of clients
Collin 03:39
will not just grow our client base, but retain our existing ones because we all know that it is way more cost effective to keep an existing client than gain a new one.
Meghan 03:50
But how do we do that without lowering our prices, nobody wants to do that we want to keep raising the bar raising the prices. Because we are worth it. We provide an invaluable service. And so we don't want to raise we don't want to lower our prices. We still have bills to pay, we still want to have a roof over our head, our operating expenses don't go down the software still stays the same or goes up in price leashes that we need. They go up in price as well. So why should our prices lower when everything else is going up as well, you can think about a value add a service. So instead of reducing your prices, consider offering additional services for the same price. For example, you may want to do a complimentary basic grooming or a pet report card detailing the activities and health during their stay. If you have a software already, this is likely built into it. But there are little things that you can do to increase the value of a service without lowering the price. You may also consider offering a referral or a loyalty program in your current clients are your biggest raving fans. So encourage them. Encourage your friends and family who are trying to support you the best that they can by offering them perks that don't necessarily mean a direct discount. It could mean after they give you five I've referrals and the referrals stick with you for 30 days or you put some strictures around it to make sure that you're not giving away the farm. But you could also give a small gift as well. Maybe you have some company swag that you can give them after they give you a referral and that referral sticks around with you. You can also reward those long term clients that you have that consistently bookie week after week and I've been with you for years, maybe you want to create a point system that can be redeemed for services rather than, you know, direct discounts of you get 20% off or whatever it is,
Collin 05:30
economic downturns and slowing economies are a great time to lean into your community engagement as well. So these these are hosting or even sponsoring your local community events, whether they're online or off, like pet owner meetups, training sessions, or other pet related workshops that you can build together or partner with other businesses in the area. This not just keeps you top of mind, it also helps position your business as a community leader, and is going to attract potential clients because again in slowdowns when people turn local and are supporting the businesses that they see around them, and they know where they are going to community events. Being engaged and visual and being known in your community is even more important, you may also consider something along the lines of a flexible payment option. So consider offering these payment plans or installment options for long term bookings, or long term clients making it easier for clients to commit to them, especially if they're an existing client, a loyal client, this is part of your loyalty program that they sign up for, they can get access to these kinds of flexible payment options. Instead of having everything do day one, and an economic slowdown where you are trying to be as attractive as you can to your existing clients and retain them. Just make sure they have everything paid by the start of their services. So they can pay in four, or five or six installments in the months leading up to that long expense, making it more manageable for them to cope and balance their own budget.
Meghan 06:56
I will say that for us in our business, this may be a little hard because we for some reason have a lot of clients booking last minute and we cannot seem to get them out of that hamster wheel, they keep doing it over and over again. And I know we're going to try different tactics to get them out of that. But it does seem that at least for our section of the world, that is the way that they're going, they don't want to over commit to something that they may not be able to agree to in the end
Collin 07:18
well. So then instead of just flexible payment options along with that would have to be a flexible cancellation policy. So again, these are all programs that people can sign up for with agreements and term ends and all sorts of things with them. But if you are trying to retain all the clients that you can, and you have really good ones that want to book with you, but are concerned about finances, and concerned about making it work for them, consider how you can serve them best, as long as it protects you in the end
Meghan 07:46
for that client retention. During a slowdown, you also want to focus on customer experience. Because without your customers with your without your clients booking you, you don't have a pet sitting and dog walking business. So go the extra mile for them and making sure that their owners and the pets have a memorable experience with your service. That doesn't mean going to their dry cleaner. This doesn't mean taking the coffee driving their coffee to work. This is things that are in your wheelhouse that you want to do that you are getting paid to do. But ultimately, the word of mouth from your satisfied clients can be the most effective marketing tool out there. Along with those community engagement events that you just mentioned, you may also want to collaborate with non competing businesses. We know a cookie dough shop that makes a pet friendly cookie dough. And we have been really in talks with the person that the owner of the shop that we can host an event there, they don't compete, they don't do dog walking petsitting they make cookie dough. But we can definitely do an event we can partner with them. We always want to understand and meet our client's needs and expectations. So consider changing your marketing messaging, make sure that it still aligns with your mission, your vision and values. But maybe you want to target a new sector of people or a different than you have before. So more people are staying at home. That has been a thing for the past few years. Some people have gone back to work, but there are still a large portion of people who are at home working in their offices and dealing with letting their dog in and out and potentially barking during zoom calls. So maybe change up your marketing message and see if it resonates with a different group of people that you're trying to target. But in all things make sure that your communication is transparent with your clients with your potential clients, your your messaging and your branding. Keeping things consistent will allow people to trust you more that is the crux of our business trust. So keep clients informed about the measures that you're taking to ensure their pet's safety, especially if there's a health related concern while they're away.
Collin 09:42
Ultimately remember that the key to offering our clients their perceived value without compromising the sustainability of our business. That's key. We cannot compromise the our ability to show up tomorrow. If we make prices too cheap. Today we cut those too deeply. We have to understand our client's needs By continuously enhancing our quality, and being proactive in our marketing efforts, like you mentioned, making of getting ahead of this, testing out new verbiage, testing out new aspects of our brand and who we're actually speaking to, because as we've talked about, our clients are going to begin to look for value and more affordable options. So instead of lowering our prices, what if we added a value walk or a more affordable pet Set option. And what's important here is to understand why we can't just make something cheaper, why we can't take our standard visit and make it cheaper. Well, besides leading to something called deflation across the broader economy, which would actually be more impactful to a lot of other people, but just us personally, us locally, we have a lot invested in our brand in premium aspects of who we are and who we are serving. cheapening our service is actually going to impact the perception of who your brand is, and who you're serving to, in your community and who people think you are for and how you're going to serve them
Meghan 11:04
well, and then just as the personal human level, we never want to feel like we are less than or we never want to burn ourselves out. And by making our services a few dollars less simply because we think that's going to attract more people. I mean, in the end, it will attract more people, but you are going to be doing yourself as a person, you're going to be doing yourself a disservice. And then obviously your business, you may not be able to provide as much food on the table for your family if you do this. So it's the differentiation between making it more affordable, and cheapening something continuing to provide as much value as you possibly can and explaining that to the client.
Collin 11:40
And that is really the hard part about this is that when people start to look for more affordable options, or cheaper options, those are different. Just because something is cheaper, doesn't mean it's we all understand Oh, if it's cheaper, it's not of the same quality. But if something is more affordable, that can still be something that is of a high quality. It's just now within my budget. So how do we as pet services to a dog walking, pet sitting? What are all all the all these different services that we offer wedding photography? How do we take our services that we work so hard on? We all we all offer premium, high quality, top notch professional services to people? How do we make something that more people can afford, or are going to be able to continue to use if the economy slows down? So when we are creating this more affordable service offering, it is it can be a very strategic move, especially during downturns. But it does come with potential pitfalls we have to be aware of. So what are some of the benefits here were well, definitely a wider market appeal, just like we started off the show talking about how do we how do we grow during this? How do we retain our existing clients? Well, a wider marketing appeal, this is going to be very appealing to a lot of people. So introducing this, this lower price service, this lower tier service is going to help you tap into a segment of the market that's much more price sensitive, potentially leading to more clients that you can get access to later down the line.
Meghan 13:04
Well, I know you were just talking about this with me the other day, we currently offer a 30 minute and a 60 minute visit. That's it. That is what we do. I know a lot of pet sitters do like a 1530 45 5060 of all the minutes. But we do this at 30 and 60. And I know you are talking to me about potentially doing a 20 minute service 20 for 2020 minutes for $20. And that is we've never offered a 20 minute service before. It's something that we're going to have to really put boundaries on. And we had discussed of how many animals what types of animals, what are we doing in the home? What kind of activities, what are we not doing. And so putting the the boundaries on it is really crucial. Because we don't want to overextend ourselves, have the clients think, oh, I can just get the exact same services for 30 minutes, but it's just going to be 10 minutes shorter, and it's going to be a little bit cheaper. We don't want that. We want clients to know exactly what they're getting for their money and say, Okay, if you want any if the bare bones is 20 for 20, if you want anything other than that, you have to go up to the next level.
Collin 14:04
And you're absolutely right Megan, it is important to note is that we are not taking an existing service and making the price cheaper. What we are doing is we are maintaining our pricing across the board and crafting our own unique, affordable option. So this is up to all of us as business owners to understand what does it mean for me to be affordable to more people or not just more people, but what would it mean to for me to be more affordable to my existing clients if the economy took a downturn and that wider marketing appeal that went to market appeal is a key aspect of that of not just wider market to new clients, but even existing clients who you may become too expensive for if their budget takes a hit.
Meghan 14:43
And if you offer varied pricing options, you can again really cater to a broader range of clientele, allowing you to retain your current clients so they don't leave you this could potentially also give you a competitive edge above everybody else above those who are only offering the higher price over says and don't offer something more budget friendly. So it will set you apart and make you potentially more attractive to clients.
Collin 15:06
So other so we talked about the benefits of having a wide marketing appeal that increased volume of bringing more people to your door flexibility for clients, allowing them to pick and choose what's gonna be the best fit for them within also your professional opinion and guidance, and then that competitive edge.
Meghan 15:21
But as with everything, there are cons. So you may dilute your brand. If your business is known for premium services, and you introduce a lower priced tier or a lower priced service, it could dilute your brand image, if you only want to service the affluent clients, existing clients might question the value of the higher priced services, they may go, oh, I don't want the 30 minute visit when I could just get the 20 and be just fine. With more affordable services. It could also come with thinner profit margins, you really need to work your numbers on this one, because you need a significant increase in volume to maintain or grow your profits. If you want to introduce a 20 minute service, you could potentially get two to three done in an hour period. But you need to make sure that it is profitable for you. And as I just mentioned a minute ago, making sure that the client expectations are crystal clear, you telling them exactly what they're going to get for this more affordable option, it's not going to be all the bells and whistles and all the roses, like the other options, it's going to be a little bit less. And then there runs
Collin 16:19
the problem unfortunately, of if you make a more affordable option, and then you have to raise prices on it later, the optics of that don't quite come off well. So you have to keep all of this in mind and keep looking down the line five years, 10 years of how you want this to be structured. Anytime something is labeled cheaper or viewed to be inferior, there's a risk that this service might be perceived as lower quality, even if it's not the case. Another concern of adding an additional service at a lower tier is that there's always chances your existing clients might want to opt for this cheaper this more affordable service, thereby reducing your overall revenue, impacting your margins and impacting your ability to continue to run your business when you have all of this volume. And it might be hard to keep up with that pace. But you're not actually making the profits you need to run a sustainable business.
Meghan 17:07
But there are some things that we can do about this. As I mentioned earlier, if you offer a more affordable service, make sure that it is different than what you currently offer. You want to ensure that the client knows that this is something new or different. There are different perks, there's a different service duration, or any other tangible differences that you can possibly point out to them. Because ultimately all of this affects your positioning in the market when the market has a new service as a response to the economic challenges, maybe a slowdown, make it clear that you're trying to cater to a broader audience during these tough times.
Collin 17:40
Something as simple as we know, it's tough out there, but you still love your pet. To help you with your next travel, we're excited to offer our new insert name of affordable service that you've come up with.
Meghan 17:51
Obviously, you don't have to use that exact language, but whatever, something along those lines, and you could do a pilot test as well. So before you do a full scale launch of this, if you aren't quite sure if a market if your market is able to handle this, or if they're even interested in it, consider doing a pilot test in a little area or with a client or two, for a limited time to gauge that demand and the potential issues that may come across the board as well. Because that's the last thing you want to do is launch something and then it not end up working out. So testing it before you really get to the full blown stage, it will also ensure that this other service that you're offering, or other products doesn't compromise the overall quality and reputation of your business. Because again, that trust is paramount. The Quality Assurance here, you really need to know is this going to work. And obviously we can never know fully if something is going to work. Sometimes things fail for many reasons. But you definitely don't want to make clients feel like you've done a bait and switch during tough times. Because again, that trust is so crucial well,
Collin 18:50
and they are already emotionally charged and worried about their finances and trying to figure out who they can trust and how they can get the most bang for their buck. And so those clear communications or an asking for feedback is really important, because it's
Meghan 19:05
going to help you refine the process the offerings that you have. And it's going to address any concerns but like again, before you go to that full scale process. So for example, let's take a standard 30 minute walk you charge $30 For what would a more affordable walk look like? The key elements here are that you want to make it different than what you're currently offering. But you still want it to be attractive and full of value. So the client thinks, Oh, yes, I want this because I'm getting the most bang for my buck here. So you could make it a shorter duration. As we've discussed, maybe not a 30 minute walk could be a 20 minute walk or a 15 minute quick walk or express walk something that you a little pithy title that you give them to differentiate of this is not a full lunchtime walk. This is just a quick lead out our quick walk.
Collin 19:50
This is probably one of the most straightforward ways that you can make a service more affordable and it's really the easiest thing for us to do in a service based industry where we aren't hind based usually in what we offer of going, okay, my full service is longer, so my affordable one must be shorter. What's important to see here is that you don't get in over your head with taking on visits where people are trying to cram in everything into a short service when they have no right to be and you actually can't make that work. And then you find yourself going over on time. And they just need to book the more expensive experiments at that point.
Meghan 20:26
Or you try to book clients with these Express visits, but they are across town from each other. That is a that is a great way to make sure that you are not profitable during this, it doesn't matter if the walks are shorter if the clients are further apart. If you serve as a very small radius, or do a lot of clients and apartment buildings, you could consider walking multiple dogs at once. So doing a little bit of group walks, it can increase your efficiency and allow you to essentially produce the price per dog however, the you must ensure that the group size remains manageable and safe. We love tiny horse leashes for walking more than one dog.
Collin 21:00
Also, in this process, consider limiting the extras this goes back to what we mentioned earlier about adding other values. If you're trying to increase the perceived value of one service to a client, you're going to add extras to it stay with your 30 minute walk here for a minute. Maybe when you add this second service, this more affordable service to the original $30 Walk, you're going to add chilled water a light massage other extras to that that the limited service does not get so while or maybe your premium service does include that full report that GPS tracking, the more affordable walk doesn't really get that it doesn't get the GPS one except of course, if you're trying to maintain safety and that is at the core of your brand, then you need to keep the GPS walk in there. But you can start to see how now that I have two services. One premium one more affordable, what can I add to the premium one to make that make it seem more premium, and what can I take away or not have to the affordable one to really differentiate those two,
Meghan 22:03
when people book dog walks, they typically book the mid day visit from 11 to one are the highest, the highest number of dog walks I think in the entire world are done at that time. So consider offering a more affordable walk during off peak hours when you might have fewer bookings if you don't have a lot of morning visits, and you're an early riser, but you really don't have anything from seven to 9am. Maybe consider offering walks during that time, it can help you optimize your schedule and provide the value that clients are needing with the flexible timings. With the more affordable option that we have been talking about. We've also been thinking about the again the boundaries that we want to place on this and maybe only allowing one pet so if they have two dogs that need walked, this one isn't for them, because they'll need to choose the other tier, the higher tier
Collin 22:46
that that gets that gets back to keeping these manageable for you that if you do offer a 15, you do offer a 20 minute visit, or walk Are you going to be able to realistically get that done and make it worthwhile with two talks there. That's for you to decide on how you want to have that structured, but finding ways to differentiate the service that are meaningful, and are going to keep it manageable and worth your time is really crucial.
Meghan 23:10
And with the service area that I just mentioned, if you have a small service area, maybe localize it to a specific block or a specific neighborhood during the times that you want to reduce the travel time that you need. And the expenses that you have, again, you don't want to be driving across town for more affordable services, just because more people are going to book them that's ultimately not going to be the most profitable for you. When you consider offering a more affordable option, make sure that you have the short term and the long term implications for your business in mind. Because just because you offer a 20 minute for $20. That doesn't mean that that's going to be what you do for the next five years.
Collin 23:46
Yeah. How are you going to get out of that? What if that becomes insanely popular? And a lot of people want that? Are you able to take on that scale? Are you able to take on that drive time? Is it still affordable at the at the high rate that people will start booking you? Or how are you going to adjust that? What's your messaging over time? There's a lot it's not just as simple as quickly adding it, you do have to think through? What is this going to impact? Is this going to make me run the business that I want to run at the end of the day? Or is this a short term fix or short term step to get through this slowdown and continue to serve my clients in the best way that I know I can.
Meghan 24:22
But there is also something to be said for adding it to your website and see what happens if this is really something that you want to do and you think that it's going to be again profitable for you at the end of the day. You could add it to your website and see if there's interest. Something that's always interesting is pet sitters associates. As pet care professionals, your clients trust you to care for their furry family members, and that's why pet sitters Associates is here to help for over 20 years they've provided 1000s of members with quality pet care insurance. Because you work in the pet care industry. You can take your career to the next level with flexible coverage options, client connections and complete freedom in running your business. Learn why pet sitters Associates is the perfect fit for you and get a free quote at Pet set llc.com You can get a discount. Who doesn't love that when you join by clicking membership petsitter confessional and use the discount code confessional when you go to checkout to get $10 off, check out the benefits of membership and insurance once again, at pets@llc.com.
Collin 25:11
We just walked through several ways that you could approach making a more affordable service for your business. Let's say you focused on making a shorter visit, how would you go about pricing that no pricing is always a point of contention and frustration for many of us, as business owners, making sure that it is workable is affordable for our clients, but we can still make a profit off of it. So just because we make something shorter, let's say we had a 30 minute visit, and we're going to make it a 15 minute, just because we have the amount of time doesn't mean that we are going to also have the price of that because there are fixed costs associated with every single visit that we go to there's the time travel, there's the fuel administrative tasks, the basic care tasks that don't decrease linearly with time. So a 15 minute visit should cost more than half, then it's a 30 minute period. So let's say you charge $27 for your 30 minute visit, here are some ways to think about finding that pricing. Well, we're actually going to start with 50%. But that's our starting rate. So half of $27 is 1350, then we're going to add back a premium for those fixed costs. And that is calculations that you are going to have to do, what are your fuel costs? What are your administrative tasks? What does it cost to you to get there, and given that each visit has these inherent fixed costs, regardless of duration, we need to add this to every single one. So for argument's sake here, let's say it's $4, you arrive at $4. However, you did that. So now we're at 1750, then we're going to go and we're going to look at those market rates, we're gonna look at competitors in our area, because if we're trying to be competitive or trying to grow the market share here trying to see where the need is, this will give you an idea of the tolerance. And that's really when we say go look at the market rate. We're not saying copy the rate, we're not saying go and undercut them, what we're trying to see is what can the market support right now, that's when we're doing our market research, we then have to then go and look at our own personal budgets and understand, at the end of the day, am I taking home enough to make this worth my time after those fixed costs? Then we look at the factor factoring in the client's perceived value of these visits. Even though the visit is shorter clients still value the peace of mind knowing that their pet is cared for by you. The pricing shouldn't dip too low as it may undervalue your services and undercut your expertise that people see that you have. And then we're going to look at our bid demand and our business costs. Think about the volume of clients you might attract with this new offering. And the associated costs that may rise linearly with this, if the shorter service becomes popular, is you're going to cover your operational cost at the price point that you're considering. Those are all calculations across, start multiplying a bunch of things together.
Meghan 27:59
Yeah, because at the end of the day, if we're going from client home to client home, gas is the same and it doesn't really seem to be going down here, it's only going to go up over time, or at least stay the same of where it is now. So that is never going to change, we're still going to have gas costs, that will never be five cents again.
Collin 28:17
Right. So considering all those above factors, if your 30 minute visit is $27, you're really looking around between 17 and $20. For that 20 minute visit, it's going to it's going to be better, it's more than half, but it still offers a considerable discount that is noticeable by your clients. But obviously, you are going to need to adjust this to your operational costs, market dynamics, and the value of your service in your particular area.
Meghan 28:43
If you want to consider offering a more affordable service, you need to make sure that it's a good fit for you, you need to do that market research. Do that introspection of your business model, can your business support this due to the number of clients you currently have? And the ways that your marketing? And how many clients client acquisition you're getting every single month? Does that line up with the potential for this new offering? And then again, look at that market research that look at your competitors? Are they offering similar things to what you want to do? Or what what kind of prices are they looking at? Again, we're not saying you must be matched them, you must undercut them. We are simply saying this is this is just research that we are doing, then doing that cost analysis of looking at internal looking at your budget, looking at what things cost and what you pay for and what your expenses are every single month, so that you can get an idea of your profit margin,
Collin 29:33
because a cost of even the administrative overhead of scheduling these because if you have a shorter visit, I knew what we talked about earlier about how Oh, now now I can fit three of these in an hour. Right? But that's three services that you have to get on the schedule that you may have to talk with clients that you may have to make sure the notes are updated up to date that you are going to have to put in the route plan for that day. So just because you get more that may mean more headache of making sure that they get on the schedule. In the first place, and are you being compensated enough for that to make this worth your time, because if you spend all of your time just doing the schedule, because this go go, these go by gangbusters here, but that but you aren't actually making money from this, it's not going to be worth it in the end.
Meghan 30:15
So that's why you need to do that profit margin, you might offer a more affordable service, but and you might have a smaller profit, but it could pinch to potentially bring in volume. So knowing those numbers of how many services do I need to get to actually reach my revenue goals.
Collin 30:29
And then what's tied into that is your capacity analysis to do you actually have the capacity in terms of time staff have the resources to handle any influx of clients if this more affordable service becomes popular, because if now all of a sudden, you're needing to hire people to take on the services that you don't have time for, but you still need the services to be in paid profitability, to meet your personal budget, this all of a sudden starts to look really a whole lot not worth it. If you never want to go down that road in the first place.
Meghan 30:57
If you're really unsure if your market can hold this new service, you might want to consider a trial period doing something on a limited basis, maybe for three months saying, I am offering dog adventure hikes for the next three months in the spring, from February to April, here we go. It'll allow you to test the waters without fully committing and then you can gather real world real world data on the demand and the profitability and the operational changes that you may have. But also knowing that you have the trust of your clients at the forefront of your mind of you don't want them to feel like they're they're being bait and switched it and you're changing things about your business all the time. So communicating that this is just a limited time trial basis for this specific service is going to be important. Because you want to position your brand well consider it consider how this new service this new affordable product or service that you're offering is going to affect your brand's image. If you've again, if you position yourself as this premium service, but you're offering something more affordable, is that going to dilute your name, just something to consider. And then again, that feedback, you're getting feedback before you start offering the service. And then once you do offer it you were saying you're asking clients how they feel about it? Do they do they enjoy this? Did they see the value in this? What did they think about it?
Collin 32:09
It's important to go through each one of these aspects before we offer a more affordable service so that we can make sure that we have a clear picture of whether even introducing in the first place aligns with our business goals, the needs of our market or our operational capacities again, that scalability can we actually take on the increased volume that will be necessitated by offering this more affordable option. Remember, your business decisions need to be revisited periodically as markets, clients and business capacities evolve as your business changes as you hire more people. As you fire more people. As you bring on more clients as you lose more clients as markets go up and down the services that you offer, need to be adapted to make sure that they are fitting what is what you are exposed to and what is being put at your plate.
Meghan 32:56
And with all things offering the most value as you possibly can, because we never want cheap services, right? We don't want to be known as cheap people or cheap companies. That is not at least for us. That is not a word that we want to be associated with. So with a slowdown with an economic downturn, you can potentially offer more affordable things, just making sure that you do it in a wise way. Right, really,
Collin 33:18
it is really difficult for a premium service to offer a more affordable option, but it is done to time and time and time again, go look at a Porsche 911 Right now you can get a Porsche 911 for I don't know $100,000. You can also spec it up to half a million dollars if you really want to, and it's all a Porsche 911. So people who can afford, we can't afford $100,000 car but people who can afford $100,000 car all the way up to people who can afford a $500,000 car can say they drive a Porsche 911 It's still viewed as a premium brand is not viewed as a cheaper brand. And that's what's important here. Same thing with iPhones, iPhones go all the way up to $1,400 for an iPhone or more these days, but they offer a more affordable option. But it's still known for its high quality, its integration of software and hardware and user experience, which is why people go for that. And they can get that experience where they use the $800 phone from Apple or the $14 phone.
Meghan 34:17
We know that you do quality work, you provide a lot of value to your clients. So if you have done something like this in your own business, we would love to hear feedback from you. You can email us at feedback at Pet Sitter confessional.com Or you can call us at 636-364-8260. Thank you very much for taking your time and listening to this today. We are appreciative of you. We also want to thank pet sitters associates for sponsoring today's episode and we will talk with you next time. Bye
