656: The Commodity Trap and How to Escape It
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What happens when clients see your pet care business as interchangeable with everyone else? In this episode, we break down the commodity trap and why it’s not a pricing problem—it’s a positioning problem. We walk through the client, financial, and operational red flags that quietly signal your business is stuck competing on price. We explain why being more trained, more insured, and more professional often hurts more when the market doesn’t reward it. Finally, we share a practical framework for moving from commodity to chosen by selling outcomes, making your process visible, and building a business designed for the right clients.
Main topics:
Defining the commodity trap
Client pricing behavior signals
Margin and burnout cycles
Operational warning signs
Moving from commodity to chosen
Main takeaway: “If the only question a client ever asks you is how much you charge, that’s not a pricing problem—it’s a positioning problem.”
That single question can quietly reveal whether your business is being treated as interchangeable. When pet care becomes a commodity, price becomes the deciding factor, margins shrink, and burnout follows. Being better, more trained, or more professional doesn’t automatically protect you if clients can’t see the difference. Escaping the commodity trap starts by changing what you sell—from tasks to outcomes—and making your process visible.
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
Commodity trap, pet care industry, pricing problem, positioning problem, client perception, service differentiation, price comparison, profit margins, client behavior, financial red flags, operational red flags, outcome-based services, ethical switching costs, business specialization, client education.
SPEAKERS
Collin, Meghan
Meghan 00:01
If the only question a client ever asks you is, how much do you charge? That's not a pricing problem. That's a positioning problem. Welcome to pet sitter confessional, an open and honest discussion about life as a pet sitter, whether this is your first episode or your 600 and something the time listening, we appreciate you being here. We'd also like to thank our sponsor, pet sitters, associates. I'm Megan. I'm Collin. Today we are talking about something that quietly wrecks a lot of pet businesses, the commodity trap. We've often said a dog walk is a dog walk is a dog walk, right? Well, it doesn't matter who's doing. It could be a neighbor, family member, friend, professional pet sitter. That's a lot of times what clients think is anybody can do it. It's so it's super easy. The commodity trap is very damaging to our businesses, not the burnout, not the bad clients, not the lack of demand, but the slow, grinding reality of realizing that no matter how good you are, the market treats you like you're interchangeable with everybody else. Again, anybody can do the dog walk. Doesn't matter if it's the neighbor down the street or the company that has the insurance. But let's start with the definition of what the commodity trap is. A business is in the commodity trap when the customer perceives what you offer is basically interchangeable with everybody else. Because of that, the price becomes the deciding factor, and once price becomes the deciding factor. The race to the bottom starts. I'm sure you've seen this in the pet care industry, on Facebook groups. You know, can you match rover my day? My neighbor does it for less. We've seen comments like we're just shopping around this time, or we just want to get a price quote, or we found someone cheaper, but we might come back. Or we've gotten this recently. They say my daughter is going to stay home this trip, but we'll definitely reach out in the future, because we do travel a lot well, then they don't often come back. We all know that, you know, none of these statements mean that you are bad or you're offering a bad service. They mean that the client doesn't see a meaningful difference between you and the alternative. Well, June, who has my house key already. So this is just fine. She's just gonna go in and do it. It's not a big deal. And that's the trap, because when you're perceived as a commodity, being better doesn't really matter. Being more trained doesn't matter, having insurance doesn't really matter, because the client doesn't know the difference. You know, those things are nice, the insurance and the training and the certification and the bonding and the background check, the pet first aid and CPR certification. Those are nice, but they're not decisive in the client's mind. They don't say, Oh, well, because you have insurance, you're going to operate at a higher standard and have a more professional level of care, versus June down the street, who doesn't?
Collin 02:39
Yeah, the fact is, is that in a lot of markets, when somebody says pet sitter or dog walker, the client immediately has a notion in their head from a past experience. And this could be that they themselves were a dog walker in middle school, or they have a friend who does this on the side, or they know somebody who was on rover or things like this, who is just doing it a little bit here and there. And that's the first touch point that many, many people across the industry and the potential clients have about their perception of us. And so what this means is that when we take and we try and layer on top what we think are the differentiating factors, the training, the bonding, the insurance, the background checks, the pet for sale, CPR, that kind of gets lost in the meaning for them, because all they have is what they first encountered.
Meghan 03:34
Now, unfortunately, there's absolutely nothing we can do about these preconceived notions that clients are coming into our company with that's the reality. We can't change the past experiences that we've had. We can only educate moving forward. However, if their mind is already made up of well, this doesn't really matter. Or why can't this be cheaper? There are only going to be so many things that you can say to potentially convince them to go with you. This all sounds pretty negative, and it is, but let's keep going to see how the commodity trap plays out. So your service looks similar to others. Then clients compare primarily on price. That's really what they're looking at. Then your margins get thinner. You try to make up for it in volume. Okay, well, I'm not making as much off this dog walk, so I need two or three dog walks to make up for it. Then you get busier, but ultimately not more profitable. You start stretching yourself too thin, whether that's going into a new service area, or trying to serve clients that you wouldn't normally serve, and bending your rules, which leads to your training and your documentation and the Care Quality ultimately getting squeezed of that you're not providing the same level of care that you were prior to all of this, so your service actually feels more similar to those other people, and thus the price pressure really increases again.
Collin 04:48
It's this continual loop. As the price pressure increases, margins thin out. You have to cheapen the quality of the service and make it up for in volume. And then the cycle repeats. Price, because that's what everybody finds themselves doing, because they're working in an undifferentiated market of providing the same service, and then the only differentiating factor you have is price. And that's what's really important here, is that, well, one of the really important factors here is that, the fact that you get busier, but not more profitable. The fact is is many businesses getting to the point where they think, Well, I have to either grow or get out. If I don't grow my business, I can't make the money that I need, or I just have to get out of this entirely, because it's not worth it. That's the danger of the commodity trap. And then even though you grow and may scale your business and add a bunch of employees, and you add a bunch of services, and you are doing a lot more every day. If you don't have the margins, if those don't change, you're still in the same trap. Things are just a lot more complicated.
Meghan 05:57
And as a reminder, if you do have employees, the profit margin, there is 45 to 55% that you really want to aim for. If you're super low, you may think about increasing your employees wages. If you're too high, you need to think about scaling back in some capacity.
Collin 06:12
And really again, this this loop is brutal, and what makes it even more uncomfortable in the pet care industry is, here's the uncomfortable truth, the better you are, the more it hurts, because you know that you're doing more, you know you're safer, you know you're more reliable, you know you're more professional, you know you're more premium and high end, and let's be honest, coming into clients' homes, taking care of their Pets one on one for a dedicated amount of time, that is an amazingly premium service, and we don't often. We often take that for granted, is what we do, and we don't price it accordingly. And so we're going above and beyond. We're doing all these procedures and these policies and these SOPs, these multiple layers of employees and accountability and reliability, but the market isn't rewarding it for us,
Meghan 07:06
because most of the time, as you pointed out there, it's all on the back end. So yes, you can talk about the insurance you have and exactly what it outlines, and so it's for their protection and peace of mind. And you can go in and talk about these things, but most of the training and the SOPs and everything is on the back end. It does make your business better, but a lot of times the client doesn't actually see that. So let's
Collin 07:28
get concrete here. What are some ways? What are some warning signs to tell if we are in a commodity trap, and several of these may hit close to home. So what about some client behavior red flags they're really five to look out for. The first one is that prospects lead with the question of how much, and nothing else. They have no follow up questions for you, and they don't really listen as you continue to go on and explain. The second one is you'll see that in a small price difference wins or loses the job and the client coming to you, if you're just a couple dollars more expensive than your closest competitor, and you see a lot of people going I found somebody else, this is a good sign. Then third is clients switch sitters frequently. I know we see this a lot in our market, whereas people will go from person to person to person to person to person to person to person, and kind of cycle through throughout, because there's no loyalty. The fourth thing to look out for, for client behavior red flags, is that your differentiators don't affect close rates. And you'll really see this whenever you go through your your conversation with clients, and as you've got these things, if you go, Oh, this is definitely the knock it out of the park. This is what people are looking for. But whether you say that or don't say it, it doesn't really change whether clients want to go with you or not. And then finally, this one, this one hurts your reviews will praise you for being nice or responsive and dependable, but they don't actually mention a specific result. They don't actually talk about well, because I've worked with this company, my life is like X, Y, Z, or now my dog is like this, or my cat is better at these things. It's very bland and generic.
Meghan 09:11
We also want to talk through some financial red flags. We talked about client red flags now financial ones, your revenue grows, but your profit really doesn't. Also discounts become routine. You're constantly giving away new promotions and and new discounts to your current clients and potential clients to get them in the door. The third financial red flag is that you're booked solid, but you are stressed about cash. How are you going to pay your employees next week? Or how are you going to buy a new leash or a new first aid kit, whatever you need? How are you going to be able to buy it when you don't have the money? Another financial red flag is that you are afraid to raise prices, not because of the value, but because of the churn. You don't want to lose clients. You feel like if they leave you, you're not going to be able to replace them.
Collin 09:53
And finally, looking at some operational red flags, how is our business actually being run? The first one here is that maybe you. Rush visits to make the math work. You start chunking away and eating away at the end of the visit, instead of giving them the full time or, you know, you try and cram more and more visits throughout the day to make sure that you're making the math work. And the finances you also may feel like training feels like a luxury you can't afford when you go, Oh man, I would love to put you on a different visit, or shadow you on this visit, or make you watch these extra videos, or make you read this thing, but that's money that I have to pay that I don't get out on the back end, that I don't see the return on that investment and my clients don't really care about. So maybe I'll just skimp a little here, and I'll skimp a little there. You'll also see this when one sick sitter causes chaos because, again, you haven't built in. You don't have that margin in your business and that double coverage,
Meghan 10:51
again, that 8020 rule of you only want to build yourself enough capacity for 80% not 100% when those catastrophes happen, you're not going to be able to have the margin to take them on.
Collin 11:01
And finally, you'll see the operational red flag of your business only works if you are constantly involved again, because you don't have that margin. You don't have those multiple layers to make sure that you can go and focus on other things.
Meghan 11:15
Something you should care a lot about is having amazing insurance as a pet sitter. You know how much trust goes into caring for someone's furry family member, but who's got your back for over 25 years, pet sitters Associates has been helping pet care pros like you with affordable, flexible insurance coverage, whether you're walking dogs, pet sitting or just starting out, they make it easy to protect your business. Get a free quote today at pets@llc.com as a listener, you get $10 off your membership when you use code confessional at checkout. That's pets@llc.com because your peace of mind is part of great pet care. The United States dog walking to pet sitting market is incredibly vulnerable to this first it's large. Everybody is dog walking to pet sitting, especially since the pandemic, you can just pick it up on the side. Do it? It's not a big deal. It's also very fragmented. June's dog walking in Phoenix, Arizona is completely different, probably from Sarasota, Florida's Marcy's pet sitting. And while, yes, we do want differences in our businesses, how we operate, how we do things, our business structure, how we do visits, there does need to be some cohesion here. You know, pet sitters international just released their standards of care, their industry standards, and they are phenomenal. If you haven't checked that out yet, you should go and read it. But as it stands now, the industry in the United States is still highly fragmented. It's also super easy to enter. The barrier to entry is virtually zero. You don't need anything to do this job. Of course, you need things to do it well and to protect you and your business. But anyone can download an app, anyone can print business cards, anybody can post in a Facebook neighborhood group pet owners don't start by asking who has the best operational redundancy. They start by asking who can come today or who has the cheapest price. Marketplaces have trained customers to compare price and availability and star ratings. Be sure to ask for those Google and Facebook reviews. So those three things, price, availability and referrals and star ratings are efficient, but it's also commodity logic. If you don't actively position yourself outside of that logic, you can get pulled back into it by default.
Collin 13:13
But here's the good news, there is a way out to go from commodity to chosen, and the fact here is that we don't escape the commodity trap simply by yelling we're better. That is often one of the first things that we go to and that we try instead. We escape it by changing what the customer is actually buying. So the first step here is to stop selling a service and start selling an outcome. Dog walking is a commodity, but midday decompression for high energy dogs, or maybe fear free walks for anxious dogs, or senior support visits with mobility awareness. Yes, these are words, and we will have to market and educate our clients on what they mean and what they are going to provide, but these are outcome based. They imply a method. They imply expertise. They imply intentionality. Outcomes are much harder to compare on price because it's very personalized and individualized to the person who is looking at the service.
Meghan 14:20
But it's not good enough to just talk about it. You have to show exactly what you mean. Clients don't value what they can't see. So you have to make your method visible. If your process only lives in your head, it doesn't exist to the customer. Again, those back end things that we work on, that admin, that route planning, the taxes, the employee meetings, the client doesn't see any of that. But we know that at the end of the day, it makes our business better and highly structured. So we have to get our method out there. This is where reporting and notes and standard routines, care plans, consistent language, it all becomes this big marketing plan that we have. And when we think of it like that, when we think of it like marketing and not administrative, but. Back end work, it really does frame our mind differently, not because these are fancy things, but because they reduce the uncertainty in our businesses.
Collin 15:08
And I think that's really important. Here is to go from this is the administrative work that you do that really helps differentiate you, that you know that without this kind of back end work and support, the services would fall flat. So why not be talking about that? Why not be sharing with clients and potential clients about all that work and show them what's going on and why it's so amazing. We then have to create ethical switching costs here, and we have to say ethical switching costs because we're not locking people into three year contracts, and with have high prices of buyouts and things like that, right? These are not contracts for the sake of control, but really integration into their life when we become invaluable to them because we've solved such a personal and intimate problem, switching away never crosses their mind. This comes from when we know the pet deeply or understand the routines.
Collin 16:06
We coordinate the medications, manage access to the home, keep records and update the client. All of a sudden, leaving us becomes inconvenient, not emotionally here, but But practically, because we have all of this. We have the record of control. We have the record of consistent, high quality care for them, and this is fair, because this is real value. All of a sudden, we've built up this relationship, and we have everything built up to support them in their pet that's tangible value that they get.
Meghan 16:39
But that does take time, right? They're not just going to trust us from the get go. Of, okay, you've never provided a service, but I will trust you implicitly. This relationship, this bonding, does take time. The way we go from commodity to chosen is also when we choose a client that we are built to serve. If you try to serve anybody with a dog or anybody that's breathing, we've often made that joke before when we're trying to hire of I just need a body, somebody that's breathing, but we don't want to do that. When we do anyone with a dog or anybody with a cat, you're going to be compared to anyone with time. And we definitely don't want that, because we're just then being compared to literally anybody who's home in the middle of the day. But if we specialize by schedule or need or temperament of pet or household type your competitors then shrink, and suddenly price isn't really in the headlines. It's more about your specialties and what you can do.
Collin 17:31
And when we think about the business that's built to serve specific clients, it's not always about temperament or breed or service. Sometimes it's operationally.
Collin 17:41
Maybe you have a scheduling knack, or you have a different kind of team approach, or you have these things that allow you to take on different kind of requests. Well, if that's where you lean, if that's where you go, like Megan said, all of a sudden, you're not competing against anybody because they can't do the thing that you're offering.
Meghan 18:00
Here's a simple test you can run this week to see if you are in the commodity business. Write down the top five reasons you believe clients choose you. Then you ask yourself, would someone pay 20% more for this without negotiating? If the honest answer is probably not, then the issue isn't pricing. It is clarity. Think about where you need to do more education. There are lots of different platforms you can do that on, but where do you need to go with your clients in order to serve them better? And that means giving them the tools and knowledge for not only how you operate, but the excellent standard that you set for your business. The commodity trap doesn't mean that you've failed if you answer that question of No, somebody would not pay 20% more for this without negotiating. It doesn't mean you have a crappy business and you need to close your doors. It means that you've reached the point where doing good work isn't enough on its own, and the businesses that survive long term in pet care aren't the cheapest. They have a plan for where they're going to be in 1015, 20 years. They have a roadmap. It may be a very loose roadmap, but at least they know where they're going, and because of that, and because they want to be here for the long term, they are definitely not the cheapest, right?
Collin 19:13
They're the clearest. They know who they serve. They know what problem they're trying to solve, and they know why switching costs are real, and they design everything in their business, from pricing to processes to reinforce that truth to their clients.
Meghan 19:29
If this episode hit home with you, you are not alone. We have often thought of our own business as being a commodity business, and how we get out of that mindset, because we don't want to be stuck in here where every we're just operating how everybody else is, and we're just going along to get along. No we want to be awesome. We want to be spectacular. We want to be different than everybody else. So if you want help diagnosing where your business is most exposed, or how to reposition without burning everything down, we are here. You can send us an email at Pet Sitter confessional@gmail.com, or look us up on Facebook and Instagram. At Pet Sitter confessional, thank you for taking your time today and listening to this. We would also like to thank pet sitters associates for sponsoring this episode, and we will talk with you next time. Bye.
