Quick Summary: A dog daycare membership can create predictable recurring revenue, but launching one too early can lock existing problems into your business. Before introducing a membership, pet business owners should improve their pricing, create more things for existing clients to buy, communicate and sell more often, increase client frequency and test paid enrichment services. Do those things first and you'll have a much stronger business, and eventually, a much stronger membership.

In 1962, Rolls-Royce came up with a rather ingenious way to make more money from jet engines.

Which, I'll admit, isn't a sentence I ever imagined would have anything to do with dog daycare.

But bear with me...

See, Rolls-Royce had a pretty big problem.

They could spend years, and millions of dollars, developing an engine, manufacture the thing, then find someone willing to spend an absolute fortune buying it...

...and then they'd sell it.

Transaction complete.

Next please!

Now, often they sold multiple engines to the same buyer, but they were trapped in the one-time transaction business model, which is a bad model to be in...

Because every time you want to make another chunk of money, you need another transaction.

 

Another engine.

Another order.

Another sale.

Another customer required.

This is bad because having to go out and make a brand-new sale every time you want to make some money is incredibly hard, expensive, time-consuming work.

It's much better if you can sell someone once...
...then keep getting paid.

Think about Netflix automatically collecting your subscription every month.

Or the razor company that sells you the handle knowing you'll keep coming back for the blades.

 

Or the country club where you pay to join, pay your monthly membership AND then spend more money once you're inside.

These businesses have been deliberately designed so they don't wake up on the first of every month with the scoreboard reset to zero.

And that's exactly what Rolls-Royce started thinking about.

How could they change the way they made money from the engines they'd already sold?

The result was something called Power-by-the-Hour.

Instead of simply selling an engine and waiting for the next transaction, Rolls-Royce created an ongoing engine support service where customers paid according to the number of hours the engine flew.

In other words, they'd found a way of generating ongoing revenue from a customer AFTER the original sale.

Smart.

And, more than sixty years later, I found myself standing in a hotel conference room in Chicago talking to a bunch of dog daycare and pet resort owners about essentially the same problem.

Because, when you think about it, most pet businesses have a bit of a recurring revenue conundrum too.

We have clients who use us regularly.
Sometimes several times a week.

They might stay with us for five, ten or even fifteen years.

They spend thousands and thousands of dollars with us over the lifetime of their dog.

But we still make them buy from us one transaction at a time.

They book daycare.

We charge them for daycare.

They book again.

We charge them again.

They need boarding.

Another booking.

Another transaction.

Then Monday morning rolls around and we're looking at next week's numbers, wondering how many dogs are booked in and how many spaces we've still got to fill.

Which is a little bonkers when you consider how incredibly well suited the pet care industry is to recurring revenue.

We don't sell wedding dresses.

We aren't estate agents.

Our best clients need what we sell over and over and over again.

So, this was the topic of my talk at Eve Molzhon's Dog Handler Academy Leadership Summit.

Memberships.

And specifically, how pet business owners can use memberships to create predictable, recurring revenue instead of starting every month wondering how many dogs need to come through the door before the bills are paid.

 

Now, I LOVE memberships.

I've helped a bunch of my clients introduce them.
Including some where clients pay a monthly fee simply for the privilege of being a member...

...and THEN pay separately for daycare, boarding, grooming, training, enrichment and everything else they buy.

Imagine having 150 clients paying you $49 a month.

That's $7,350 landing in your bank account every month.

$88,200 a year.

Before you've sold a single day of daycare.
And if Rolls-Royce can find a way to create recurring revenue from a bloody jet engine, I'm fairly confident we can find a way to do it with a Labrador.

However...

After spending a good chunk of my presentation explaining why I think recurring revenue is the holy grail of business...

I told most of the people in the room they probably SHOULDN'T launch a membership.

At least, not yet.

Because there's a danger when you hear about a pet business generating thousands of dollars in recurring membership revenue.

You immediately want the same thing.

I don't blame you.

But there are a bunch of things I'd want you to fix, test and improve FIRST.

Things that can make you considerably more money right now...

...and make the membership you eventually launch considerably more profitable.

So, before you start dreaming up membership names, designing shiny membership cards or deciding whether someone gets 10% off a doggie birthday cake on the Gold Plan...

Here are five things I'd do first...

Starting with the biggie...

This should come as absolutely no surprise to anyone who has been reading my stuff for more than about seven minutes.

Because if your prices are wrong now, wrapping a membership around them doesn't magically fix the problem.

And, in most pet businesses I look at, there's a ton of money being left on the table.

And the fact is you don't need a fancy membership name, you don't need new software, you don't need a paper and ink newsletter or a new funnel.

You might just need to charge more.

I've had clients increase prices by 25%, 40%, 50% and, in some cases, considerably more after we looked properly at what they were charging, what the service actually cost them to deliver and how much value they were providing.

And here's the other advantage...

You can make that money almost immediately.

If you've got 200 existing clients and increase what they spend with you, you've improved the economics of your existing business without adding another dog, another member of staff or another square foot to the building.

Then, when we eventually DO introduce a membership...

We're building it on top of much healthier numbers.

Which brings me to number two...

This is another big one.

Because, before I start worrying about how to get a client to pay you every month, I want to know whether you're maximising what they could already be spending with you.

If your daycare basically has one service at one price...

...there's nowhere for your best clients to go.

Instead, think good, better, best.

Premium daycare options.

Enrichment.

Solo care.

Training.

Grooming.

Boarding upgrades.

Extra, exciting 'dog centric' experiences.

All the things your best clients would happily spend more money on if you actually gave them the opportunity.

One of my DDSA members, Amber, recently did exactly this.

She introduced a price increase alongside new tiered daycare services and improved her onboarding.

The result?

July revenue increased by $32,000 compared to the same month the previous year.

Thirty-two grand.

In a MONTH.

No membership required.

And, just as importantly, introducing different services and price points teaches you something incredibly useful.

What do your clients actually WANT to buy?

Because I'd much rather discover that before we start deciding what should go inside your shiny new membership.

This one sounds stupidly obvious.

Yet, when I asked the room in Chicago how many of them had sent an email to their clients promoting a service in the previous seven days...

Let's just say I wasn't overwhelmed by the number of hands that went up.

This is something I see ALL the time.

Pet business owners tell me they need more clients.

Then I look at the hundreds, sometimes thousands, of existing clients and prospects sitting in their database who barely hear from them.

Or they'll tell me nobody buys their enrichment activities...

When was the last time you emailed clients about them?

Erm...

When did you last explain why they're valuable?

 

Erm...

When did you last make an actual offer?

You get the idea.

Before you add another product, service or membership to your business...

Get better at selling the things you've already got.

- Email your clients.
- Educate them.
- Make offers.
- Tell stories.
- Show them what's available.
- Give them reasons to buy more often.

 

Because a membership isn't going to suddenly turn you into a better marketer.

And if you can't get your best clients excited about spending an extra $10, $20 or $30 on something valuable now, that's useful information to have BEFORE you ask them to commit to paying you every month.

This is where most pet business owners immediately run in the wrong direction.

They want more revenue...

So, they assume they need more clients.

More leads, more Facebook ads, more enquiries, more dogs...

But what about the clients you've already got?

Could they come more often?

Could you increase frequency?

Could you stop allowing valuable daycare spaces to be occupied by clients who turn up once every blue moon?

A couple of my members, Kellie and Sam, recently made some pretty ballsy changes to their daycare.

They doubled their daycare prices.

 

Tripled the price of solo care.

And introduced mandatory weekly attendance.

Now, before they made those changes, their facility could accommodate around 75 dogs a day, but on some days they were down in the 40s and 50s.

Within a month they were regularly hitting the mid-60s and 70s.

And here's the interesting bit...

They'd also lost around 100 infrequent clients.
Read that again...

They reduced the number of clients, but increased attendance with more regular visits.
This is a much better use of capacity, and gives the business much stronger economics.

And they haven't even launched their membership yet.

That comes NEXT.

And now, just like with price increases and selling more often, Kellie and Sam have got something much more valuable to build it on.

And this one is particularly important.

Because enrichment is one of the fastest ways I know to start changing the economics of a dog daycare without needing more dogs.

You've already got the dog.

You've already got the client.

You've already got the building.

You've already got the relationship.

So instead of constantly asking...

"How do I get another dog through the door?"
Start asking...

"How do I create a more valuable experience for the dogs already here?"

This is why I'm constantly telling my clients to test enrichment activities.

Package them differently.

Bundle them.

Create premium versions.

Test higher prices for them.

Educate clients about WHY these services are valuable and essential to the future happiness of their dog, instead of sticking a photo on Facebook and hoping somebody notices.

Because every time you do this, you are making more money, you are training your clients to look out for offers and upsells AND you're discovering what your clients value, what they get excited about, what they will happily pay extra for.

And all of that becomes incredibly useful when you eventually sit down to design your membership.

In fact, one of the dumbest things you could do is spend the next three months agonising over what benefits to put into your Gold Membership when you could be TESTING those ideas with paying clients right now.

Which brings me rather neatly to something else...

Because if you've read this far thinking...

That's exactly the conversation we're having at this year's Summit.

We've brought together some of the smartest people in pet care to help you deliver better experiences for the dogs in your care...

...AND build a better business around them.

Which, if you're currently looking for the fastest opportunity to increase what your existing clients spend with you, is a pretty damn good place to start.

You can worry about your membership later.
First...

Let's give your clients something worth becoming a member for.

A dog daycare membership is a recurring revenue model where clients pay a regular monthly fee to access the facility, services or specific member benefits. In some of the membership models I help pet businesses create, clients pay a monthly fee simply for the privilege of being a member, and then pay separately for the daycare, boarding, grooming, training and enrichment services they use.

No. A membership can be a fantastic way to create predictable recurring revenue, but that doesn't mean every dog daycare should launch one right now. If your pricing is too low, demand is weak, clients aren't buying your premium services or you aren't regularly marketing to your existing database, I'd fix those things first. A membership works much better when it's built on top of an already strong business.

I'd consider introducing a membership when you've got strong pricing, healthy demand, regular clients and additional services or experiences that people already value and buy. Ideally, you've also tested different offers, upsells and price points. That gives you real information about what clients value before you decide what your membership should include and how much you should charge.

Memberships are one way, but recurring revenue starts with changing how you think about the relationship with your clients. Instead of relying on individual bookings and constantly needing the next transaction, look for ways to increase attendance frequency, introduce regular payment arrangements and create services clients want to use repeatedly. The aim is to make more of your future revenue predictable rather than starting every month at zero.

Don't start by guessing. Test different premium services, enrichment activities, experiences and upsells with your existing clients first. Find out what they actually buy, what they value and what they're willing to pay extra for. That information can then help you create a membership based on proven client behaviour rather than filling Bronze, Silver and Gold packages with a load of benefits nobody actually cares about.

Absolutely. Enrichment can increase the amount existing clients spend without requiring you to find another dog to fill another daycare space. You already have the dog, the client, the building and the relationship. By creating, packaging, promoting and selling valuable enrichment experiences, you can increase revenue while learning which experiences your clients value most, information that can also help you design a stronger membership later.

Every Sunday, I deliver the unfiltered marketing and operational blueprints I've used to help 2,500+ frustrated dog daycare owners, to stop running a low-margin facility and start building the most expensive (and most wanted) pet destination in town.