676: How Market Segmentation Helps You Stop Competing with Everyone
Brought to you by:
Pet Sitters Associates. Use ‘Confessional’ at checkout
Is the gig economy really destroying professional pet care businesses, or are we misunderstanding the market entirely? We share how the pet care industry hasn’t collapsed into a single low-price marketplace, but instead has segmented into distinct tiers. We explore the four layers of pet care—from exchange-based arrangements to structured professional teams—and what motivates clients in each one. It’s critical to understand why competing across tiers leads to pricing conflicts, operational strain, and unclear messaging. Most importantly, we look at how clarity about your position in the market allows you to serve your clients exceptionally well instead of defensively reacting to everyone else.
Main topics:
Four-tier market framework
Client priorities by segment
Gig economy misconceptions
Strategic positioning clarity
Competing within your tier
Main takeaway: In a segmented market, success does not come from competing everywhere. It comes from serving your tier exceptionally well and better than anybody else.
If you feel like you’re competing with every sitter, every app, every neighbor, and every daycare in town… you’re going to feel exhausted. The reality is that the pet care industry isn’t one flat marketplace. It’s layered. Different clients want different things. Cost savings. Convenience. Relationship. Risk reduction. When you stop trying to appeal to every tier, your pricing gets clearer. Your messaging gets sharper. And your operations get stronger. Clarity is not just comforting. It’s strategic.
Links:
ProTrainings: For 10% off any of their courses, use CPR-petsitterconfessional
Give us a call! (636) 364-8260
Follow us on: Instagram and Facebook
Subscribe on Apple Podcasts or Spotify
Email us at: feedback@petsitterconfessional.com
A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
Pet care industry, gig economy, market segmentation, professional businesses, client expectations, strategic decisions, marketplace care, independent providers, structured teams, operational complexity, client priorities, technology integration, industry growth, business differentiation, client needs
SPEAKERS
Collin
Collin 00:02
There's a narrative that's been floating around the pet care industry for more than a decade. We look back and see that we've also thinking this way, then it goes something like this. Gig platforms came onto the scene, turned pet care into a commodity overnight, and made it nearly impossible for professional businesses to compete. But when you step back and look at what has actually happened over the past 10 or 15 years, something very different becomes clear. The industry didn't collapse. It didn't flatten into a single low price market. It's actually segmented. What we have today is not one pet care market. What we have are multiple tiers of pet care operating all at the same time, serving different clients with different priorities, expectations and even risk tolerances. And understanding those tiers may be one of the most important insights for business owners in 2026 Welcome to pet sitter confessional, an open and honest discussion about life as a pet sitter. My name is Collin, and thank you to pet sitters associates and dog code launch for making this show possible. And we also we always have to thank our Patreon supporters who make this show possible, day in and day out. A Patreon supporter is somebody who has listened to the show, has found value in it and is wanting to give back, to continue the show and support it for all of our shows that we keep doing. If that's not something that you are interested in doing, go to pet sitter, confessional.com/support, to learn about all the ways as you can keep the show going. Today, we're talking about something that continues to shape the pet care industry in very real ways, the gig economy and how it fits into the broader pet care landscape. This is not an episode about whether gig platforms are good or otherwise. We can certainly have that conversation. And I think we can talk about how it has impacted the industry. This episode is also not about whether you should join a platform or whether you should avoid them. This episode is actually about understanding how the market actually works and functions today, because clarity around the structure of the industry is what allows us to make strategic decisions instead of just emotional ones. And this matters, because when we have the wrong mental model about how the industry actually operates and functions, and we are part of the industry and that it means that our base assumptions are incorrect. It means that how we market, how we look at our client avatars, how we look to differentiate ourselves from others in our area. It means that all of that is completely wrong, and that means that we are tilting against windmills in our marketing messages and how we connect with clients when we can understand and have a good mental model about the industry. It means that our decisions are based in fact. It means that we understand what's going on. We can change and adapt our business as necessary and make sure that our marketing messages are landing how they need to. So when, when gig platforms first entered the pet care space, many business owners, and understandably so saw them as direct competitors. The gig economy was highly visible. They had these massive marketing budgets and still do. They offered Instant Booking and lower prices. They really changed client expectations around immediacy and convenience, which felt like a direct threat to us. But over time, what we've seen is not that takeover. We've seen a stratification. Instead of replacing the traditional pet care, these gig platforms have actually expanded access to pet care. What we believe they've done is they've activated demand from people who previously would never have hired a professional sitter at all. Think of the people who would continue to use friends, families, neighbors and acquaintances, and they were just kind of locked away. They were locked out of the market. Suddenly, the gig economy, the gig apps, come along, and this, this is now elevating the awareness of the clients and what they have access to. They begin to look at them and go, Hey, I can actually use those services. Now they've really normalized the idea of hiring someone to walk your dog or check on your cat, and that it really wasn't all that of a luxury. It was simply another service available to them on demand. And in doing so, this really showed something important. There was never just this one pet care market. There was always multiple. Markets operating simultaneously. We just didn't have a clear framework of how to describe these and I think that's one of my biggest takeaways of looking back over what has happened and what has shaped the industry over the last decade. I mean, Megan and I have been doing this now for 14 years. We started really in the heyday and in the thick of the gig economy and the explosion onto the scene, and what we have found now looking back, is that client expectations are there will always be somebody available. I can always find somebody to walk my dog or take care of my cat or feed my lizard or water my plants. I love that idea of normalizing this concept. Previously, this was a whole level of service that was otherworldly to a huge swath of the population and of clientele, and now they have immediate access to it. They know about it. They are aware of it. They plan for it, they budget for it. They know what they're looking for, what questions to ask, and that's another thing. As clients have become more and more educated about their options. As they become more informed about their pet and their pets needs, both medically, socially, physically, right? All of this stuff, they begin to ask other questions. And so previously, when they would not have had access to these things and weren't thinking about it in terms of pet care, now they are, and now they're out there looking for options. Before we go any further, I want to tell you about our friends at pet sitters associates, because 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 petsit llc.com, and as a listener, you get $10 off your membership when you use the code confessional at checkout. Remember, that's pet sitllc.com because your peace of mind is just part of great pet care. I think one of the most helpful ways to understand the current landscape is to think of the pet care industry as consisting of four layers, for tiers. Each tier serves a different type of client. Each tier operates with different expectations, and each tier solves slightly or maybe completely different problems. So let's, let's start at tier one. This is the exchange based care. This is really the oldest and most informal care. This is what we all think about. This is care provided by friends, families, neighbors, acquaintances, and honestly, even more, house sitting exchange options. So think trusted house sitters or house sit Australia or house sit Mexico. These are, I want to travel. You want to travel? What if we swapped places here and took care of each other's homes? Or I'm traveling to a different place, if you want to come to where I live, you can come watch my pets in my home while I do that. In this tier, there's either little or no financial transaction. The relationship is purely based on trust or reciprocity or even personal connections. So there's this really intimate kind of connection and knowledge of this other person, what they're providing and how they're going to provide it. You see clients in this tier really prioritize cost saving and familiarity over professional structure. That's really important that we understand. They prioritize cost savings and familiarity over the professional structure. Price sensitive is how they may be described here, or they're being very frugal with their money and how it is spent, and looking for ways to barter and exchange for these services and the familiarity here, especially with the friends, families, neighbors and acquaintances, this is somebody that they all somebody they already know, like and trust it. They don't have to jump through any hoops or see any resumes or go through any of that process or pre vet them, because they know who these people are, and they really are. These clients are comfortable with flexibility and with a higher degree of uncertainty and to to a lot of professional sitters, that is unfathomable, right? We couldn't even understand somebody who's like, oh, I don't know if somebody showed up or not, but that's not that big of a deal. When we market a lot of our services, it's, you know, when we arrive, you know what happens in the update? You get the photos, you get the alerts, you get the GPS this, and the track that. But some clients will never care about that, and we have to look back and
Collin 09:45
go, okay, that's okay. That's I can't do anything about that. This tier has always existed, and it will always exist. There's sometimes no changing people from this tier into another tier. So usually, until something bad happens, they have that bad experience with the person that that was doing the exchange, and now they're looking for something different. That's usually one of the only ways that we see people move from this tier into a different tier. Is something bad happens or the other person isn't available, and really no amount of marketing, messaging, client, Avatar alignment will get us in front of this person and make them decide to jump that fence of trust and come over to us, because for their minds, their problem has already been solved. It's really easy. They call the neighbor, and we have to be okay with that. The second tier is all about the marketplace, the gig care. This is the tier most people associate with the modern gig economy. We all know of. A lot of people start on these apps, or they continue to exist here. And people come and go, yes, here we are actually talking about platforms like rover and whack. They fall squarely into this category, along with any number of other marketplaces, centralizing forces, saying, Hey, if you list on my platform, we will provide marketing, or we'll provide the booking, or we'll provide the messaging, or the matchmaking, all that stuff. There's a growing a number of these actually right, and it also falls along with independent gig sitters operating without any sort of formal business structures. In this tier, the two main drivers of a client's purchase is convenience and immediacy. Here, clients prioritize speed of booking, ease of use and price transparency. And these are things. These are themes that we as independent business owners tend to try and pick up on. We tend to try and compete here. Of like, we'll just make it super easy to book, we'll make it really easy to use, and we'll make sure that you understand exactly how much something is going to cost before you even click on a button. But there's a there's a catch here, because we tend to focus on making it easy to book right that is something that a lot of us go that I need two clicks and they need to be able to book into my system. The fourth aspect here that really differentiates the kind of clients that go to an active marketplace or platform is they want to see with clarity. They want to have the ability to quickly compare multiple providers. They want to see side by sides. They want to be able to switch back and forth between. They are looking for ways to condense a bunch of information into line item comparisons. They want to see that. They want to see what this person has, XYZ, ooh, this person has ABC, hmm. How does that fit in with me and my care and my expectations? And that's something that we can't compete on. And honestly, a lot of us don't want to be competing on that direct one to one comparison. We really want to control the narrative, control the messaging, control the marketing in that way, so that when people see us, they understand who we are and what makes us unique and different. In tier two, the switching cost is extremely low. There is no loyalty, there is no familiarity, there's no commitment, there's no longevity. They can have one provider one time and another provider the next time, and they don't really care, because it's all lined out for them. And they can just go, switch, switch, switch, switch, switch, and again, that's it. That's a choice that these kind of clients are really attracted to. The relationships are very transactional in that sense. They want to know, can you show up and for how much money can you show up and for how much money? These are things that we actively don't want to be competing on. We don't that's not a kind of relationship for our clients, and many of us are looking to grow and foster here. Here accountability is mediated through the platform, rather than through a direct business structure. It means that they have to go through a middle party, the middleman. They don't have a direct contact. This is also important because this tends to be when people kick out of this tier, when a client has a bad experience and they want to know, who do I go to to correct this? How will this actually be solved? How will this actually be handled? What is going to happen here? People also tend to move out of this tier when they start looking for more reliability, more dependability, whether that's for the kind of pet that they have medical needs or they just want to have security in knowing the person that they go to, then they start looking for ways to build that relationship and go somewhere else. And that's that's where our tier three comes. This is professional, independent providers. This tier includes our solo professional businesses and. Small owner operated companies. These are providers who typically operate with insurance, established policies, repeat clients and structured processes, the things that we talk about all the time. How do you operate as a business? Do you have the insurance do you have policies and procedures? Do you have the proper licenses to do what you do? Do you know your local laws? Can you take them to a park off leash? Or is that possible? Do you have to get licensing for that? Do you have a business license? Are you paying taxes, right? This is where we find ourselves, and we all have that strong emphasis on these personal relationships, getting to know people, building that trust, being here day after day, year after year, that's what we prioritize, and that's where our clients prioritize. They are motivated by trust and consistency. I love those two. They want to know that you're going to do what you say you're going to do, and they know that from your consistency. When you show up, see the other tiers, tier one and tier two, it's that consistency that varies and swings wildly from one to the next. Switching costs are low, whether it's my family or whether it's the person on the GIG app. I don't know who's going to show up or the quality of their work, but I guess the job still got done, and all have to put up with it when clients start to prioritize consistency of care, and they know how things are going to go, and they can know how to expect the visits to go and what's going to happen, and all that takes place now we're Talking about this third tier.
Collin 16:42
Another thing about the clients in this tier is that they are willing to pay more than the gig rates in exchange for reliability and familiarity. So see how we've gone from tier one, where there was this familiarity. Tier two was all about speed and all about ease of switching and transparency, and now tier three, we're back to familiarity, but we're looking for that reliability. So how do I merge the familiarity and the reliability? How do I bring these two together? I need my professional independence. I need the people who are going to be here for the long term, who are equally as invested in my pet as I am and are now willing to work with me for the long term as we move into the fourth tier. This is the biggest difference between tier three and tier four. We see that the market has split now again, we've got friends, families, neighbors and acquaintances in tier one. In tier two, we've got marketplace and the gig care. Tier three, we've got professional, independent providers, and now tier four, we're adding some level of operational complexity and looking at structured professional teams in tier four, this includes employee based companies with multiple sitters, standard protocols and policies, redundancy in the systems and the formalized trainings. Clients in this tier prioritize predictability, risk reduction and continuity of care, meaning that they never have to worry if somebody calls out sick, if there's an issue with something, how does that get handled if there's a flat tire while I'm away on vacation, for my sitter, do they have backup coverage in order to come in here? The clients here are also more willing to pay premium rates in exchange for professional professional what systems? It's the systems that clients in this tier are paying for to ensure reliability, even when individual staff members are unavailable. The systems now become incredibly important for this tier, and what the clients are looking for, the clients want to know that everything is being handled will be handled and will always be handled by the company, that they don't have to think about that anymore or worry about what's going to happen. And this tier really represents the highest level of operational complexity in our industry, and this is where we are. Also, again, we're seeing more and more growth in this area. In the past five years, there are more businesses than ever, and there are more larger businesses than ever in the industry. And we should rejoice in this. We should look at the complexity and the variability of tiers around the industry, and rejoice in that. And think this is the sign of a healthy industry. This is a sign of an industry that is finding its own niches, finding its own ways to serve clients because of the diversity of clients that are out there. Now, obviously we all have our opinions and our thoughts about the kind of clients and the care that they should want, but here's the thing, when clients again, if we just go back to the original assumption, oh, gig economies, they're going to come in and they're going to, they're just going to, they're going to take away everything, because everything's going to become commoditized, and nobody's going. Be able to pay premium rates for this. We do not see that. We see a more robust and diverse industry than we have ever seen before, and we can really credit this to those tier one, tier twos who are being activated up into the tier three and tier fours of the businesses and their complexity, clients become aware, and now they know the possibility, and they start to do their research. It's really important to understand these tiers, because it should change how we view competition. Many business owners, ourselves, included, can experience frustration because we believe that we are competing against every single provider in our area simultaneously. Hello. My name is Collin, and I feel this way. But in reality, our businesses primarily compete with those also in our tier, also where we are, a structured team based company is not competing with a casual gig Walker in the same way that a boutique Veterinary Clinic is not directly competing with a mobile vaccine pop up van. They serve different needs, they attract different clients, they operate under completely different expectations, both from the client and the provider. The clients, generally, in a lot of cases, know what they're getting into. That's their level of comfortability. That's what they're looking for. Confusion and frustrations arise when we try to compare ourselves across tiers instead of understanding our positions within one do I clearly communicate how I operate and how I am different from others who are like me? Because there is no direct comparison for your business in one tier to another business in a different tier. Those are completely based on client expectations, on what the client is looking for. Yes, we can educate. We can look to say, hey, I can provide this other level of care. I can do this other thing. They can't or that's not what they are operating on. So if you want XYZ, you need to come to me. But fundamentally, if that client is wanting some of those foundation expectations in tier one or tier two, we there's nothing we can do to pull them up. All we have to go is okay. They are aware, and as their needs change, they are going to start looking around and going, Hey, let me see what else is out there. Each tier is designed around a different client priority. We can never forget that exchange based care optimizes for both cost and familiarity. Marketplace care optimizes for convenience and speed. Independent pet care professionals optimize for trust and relationships, and those structured teams optimized for reliability and risk management. None of these priorities are inherently wrong or right. They aren't. They simply reflect different customers needs. The pet care industry is segmented into tiers because the clients themselves are segmented based on their needs. Recognizing this allows us as business owners to move away from defensive thinking and more towards strategic clarity on what we do and why we do it. And now a word from Michelle with dog co launch.
Speaker 1 23:39
What does it take to scale your pet care business? My name is Michelle Klein. I'm the founder of dog co launch, where pet care companies come to grow and scale. And I want to send you a case study of how one of my clients took his monthly revenue in just one year from $17,000 to over $73,000 and yes, that is monthly revenue, not annual, to get this case study and to learn more about dog CO and what we do and how we help companies go to dog CO, launch.com forward slash case study.
Collin 24:14
As we look across these tiers, I think one of the most important implications for this kind of framework and our understanding of the industry is that you do not need and should not compete across all tiers. Trying to do so will lead to pricing conflicts. If somebody in Tier one is most concerned about cost and familiarity, you as tier three or tier four should not be competing on cost. Absolutely, there's no a, there's no way that you can do that and B, you don't want to anyway. And yet, many of us feel frustrated, because we look at the people doing this and providing this for free and go, Oh, how do I compete with them? First thing, you can't compete on cost, and if you try to do you are going to lead to fewer margins. And. Compressing the margins in your business, and there's just gonna be some frustrations there, because you're not gonna be able to operate how you actually want to do next. If you try and compete across tiers, you're going to have operational strain. You are going to find that you are trying to either do too much, promise too much, operate in too many different varieties, or offer too many different levels of service and quality across the board, and it all kind of spirals out from there and thirdly, here, unclear messaging. Who are you for? Who is your business built to serve? This is a question that Megan and I have struggled and wrestled with over the past three years. Who are we really for? And how am I built to serve them? We're only built for so many people. Our business is designed to function in a very specific way. Yours is too. That means that there is a subset of the market who you need to be talking to. And if we don't understand that, if we are trying to communicate to people who only want friends and family, operationally and in the messaging that that's going to get kind of fuzzy and confusing for them to understand what we actually do instead of these things, success comes from clearly identifying your tier and aligning your operations, pricing and marketing with the expectations of that segment. What do the clients actually want? Again, I'll ask it again. Who do you actually serve? When? When we understand our positioning, we can now focus on serving the clients who actually value what we offer, rather than attempting to appeal to everyone. Ever have those clients who really you feel like are only using you slightly out of obligation or convenience? Guess what? They prioritize convenience. So of course, they're going to use you when it's convenient for them. They're not looking for anything more. They want to be able to turn on the service when they need it and turn it off when they don't. Don't ask them for more of a relationship because they're not interested in it. Or maybe you have those clients who want to be deeply involved with you. They want to know everything about your personal life. They want to know everything about what you're doing and the ins and outs and all that stuff. And you're going, I ha, I wasn't in this for this familiarity and these kind of, these kind of, you know, emotional burdens that come with this. Well, that's what those clients are looking for. So as you clearly, clearly define this, you'll stop appealing to everybody, and you'll have more alignment with your clients. Looking ahead, we believe the pet care industry is likely to continue to diversify, and technology will further reinforce that segmentation, client expectations for communication and convenience will continue to rise, and professionalization with higher tiers will likely increase as businesses invest in training systems and operational standards. It's already happening right now, and we see that continuing down that line, as technology becomes more accessible to businesses and they internalize and operationalize the use of technology, this will drive a clear differentiation from what businesses can offer versus something like gig or friends and family. They can't offer that deep integration of technology and connectiveness that businesses actually can and when clients look to the level of communication, prompt responses and the kind of updates with videos and photos that will continue to rise. They will look for that more and more, and their expectations continue to rise. And then businesses in tier three and tier four, as they invest in training, as more businesses have more and better trained employees with rock star systems and these high high standards, this is going to continue to drive these tiers upwards rather than shrinking. The industry is expanding, and it's not just expanding because more people are using the industry. And I think we have to be very clear on that it's not that there's more just more people are using and it's not just because things are more expensive. That's always a question that I have when I look at Industry Reports. Okay, the industry is set to grow by X percent into more and more billions of dollars of that. How much is inflation accounted for? How much is just price increases accounting for the growth of the industry versus the utilization of it? Right? That that's that's a key differentiator, but the industry is also expanding in the quality and nicheness. That's not a word, but the nicheness of services, the quality of pet care. Has never been better. It hasn't and the number of unique niches that are being served has it's the highest ever. As well as more pet owners, pet owners look and are seeking care. This is driving the market to find ways to serve them. More people are looking for pet care. The industry is responding. You are responding in your business by seeing your clients needs, activating and designing teams, Operations and Services to fulfill them. And they are staying and that's wonderful. The availability of multiple tiers allows the market to accommodate the wide range of needs and budgets. We should rejoice in that the pie is growing. Don't ever feel like you need to just carve out your individual slice and maintain that boundary. The entire pie is expanding. We rejoice, and we're so excited and so ready to see what the next decade holds as the business is and as the industry continue to meet the demands of the clients, the gig conversation is often framed as a story of competition and disruption, but we really believe that a more accurate way to understand it is as a story of differentiation and market evolution. The pet care industry today is not one unified market. It really never was, but now it really is a truly layered ecosystem of services serving different priorities of clients and for us as business owners, the most important question is not whether gig platforms exist or not or not, whether clients use them or not. It really is, where does my business fit within this broader landscape? Clarity about this position allows us to make decisions with confidence. We can communicate effectively to clients, and we can build a business that aligns with our goals and values. Because in a segmented market success does not come from competing everywhere. I'll say that again, because in a segmented market success does not come from competing everywhere. It comes from serving your tier exceptionally well and better than anybody else. We hope this episode was beneficial to you and it was valuable to you in some way. We'd love your feedback and thoughts on this. What are you seeing in your local market, and how are you positioning your business to serve your clients? Well, we want to thank our sponsors today, pet sitters, associates and Michelle with dog co launch, for making this show possible. And we also just want to thank you so much for listening. We hope you have a wonderful rest of your week. We'll talk to you soon. Bye, bye.
