Raising the prices of your services is a difficult topic. On one hand, beauty professionals tend to encourage one another to do so, arguing that you should always charge your worth (which is true!). On the other – many salon owners and solo specialists are afraid of losing their customers, as they are aware that for many people, the price is one of the most (if not the most) important factor when choosing a place to get their hair, nail or lashes done. Is there a way to raise your prices without hurting your beauty business? How big should the raise be and what’s the best way to announce it?
How to tell if it’s the time to raise your prices
The prices, in general, are going up
Let’s begin with a harsh, yet unavoidable fact – the cost of living increases yearly due to inflation. What’s been reasonable pricing twelve or eighteen months ago may no longer be relevant today. If the operational costs are rising, it’s only logical that your prices rise along with them.
You notice gradual financial losses of unknown origin
Running detailed reports on your business’ finances is vital, as it allows you to notice both rapid and gradual changes in its performance. Perceiving a disruption in the cash flow and catching the reason behind it at an early stage is the only way to withhold an upcoming crisis, so get yourself a tool delivering detailed statistics on your salon’s operations.
When you have such statistics and observe a slight yet undeniable decrease in your finances, and you cannot find any other possible cause for this situation, it’s possible that your prices are inappropriate, considering the costs you incur.
It seems like a long time since you raised your prices
Do you remember when was the last time you updated your price list? A year ago? Two years? You don’t recall? Or maybe your prices haven’t changed since you started operating? If you can relate to any of these, it’s most probably the right time to start thinking about charging more.
You’ve updated your services (new certifications, pricier products, advanced equipment)
Your prices being inappropriate does not always mean that you initial set them up incorrectly – it’s just that your services change, and so should your price list. What worked a year ago may no longer be relevant – maybe you bought new equipment, earned new certifications, began using pricier products that ensure better effects, started offering niche services, widened your menu or employed people that truly enriched your salon. Remember that by paying for your services, your clients pay for your education, knowledge and overall excellence. Major (positive) changes in the quality of experience you provide should be reflected in your pricing.
You offer niche services
There is no way to tell which services are niche without a wider context. What is considered unique for one location can be quite common for another, so anything really can be considered niche under given circumstances. The rule of thumb is that if you offer something other salons (or solo professionals) in your area don’t, and there is a demand for this service, you are delivering a valuable niche service. And by doing so, you are in the right to require a higher price for it.
How much should you raise your prices
Be honest with yourself
Try to evaluate your business realistically and objectively. Toss aside false humbleness, as well as generic self-motivational quotes. Try to see your hair or beauty business for what it is. Do you deliver real value to your clients? Are your services competitive? Do you care enough about your customer service? Remember that you are working in the service industry – your experience, education and productivity alone cannot be considered a business value if they do not reflect in your clients’ satisfaction. You can have over twenty years of experience and deliver mediocre work. You may have the most impressive education and your customer service may be terrible. You can have an extremely wide range of services and not be good at any of them.
With all of that being said – always evaluate your business from your clients’ point of view. Analyse the feedback you receive, both positive and negative. Clients will be willing to pay more if they see the value – make sure the value is there.
Do your research, but avoid blunt comparisons
The evaluation part doesn’t end on your training or the number of years in the industry. You have to take into consideration a number of factors – real expenses, local economy, weekly operating hours and annual operating days, the prevailing minimum wage, and so on. This is why asking your favourite Facebook group for hair and beauty professionals how they would price given service simply won’t work in your favour.
What can you do instead? Begin with a local market analysis. Research your area’s economy and your competition – but do it thoughtfully. The more similar a given competitor is to you (operating strategy, number of employees, range and excellence of services) the better source of comparison they are, though you still have to keep your distance.
Consider your target audience
Who are your clients? Go to your Booksy account for the much-needed oversight – you have all of the information on your client’s age, appointment history, retention rate and purchases stored here. With such help, you will be able to create your business’ client profile – a description of an average user of your services. What’s their age? How often do they visit you? Which services do they choose? How much money do they spend on average? Do they purchase retail? By looking into these criteria, you’ll be able to see whether or not a price increase will be a great deal for your average client – and what amount may be a breaking point for them.
How to announce you are raising prices
Inform without the need to defend
By raising your prices you are not doing anything “wrong”, and therefore requiring justifying. It’s best to word the announcement in a way that allows your clients to understand your decision, but you shouldn’t act like you are begging for forgiveness for what you are doing.
The announcement should:
- Be short, clear and sympathetic in tone
- Explain the reasoning behind the raise – remind that higher price means higher quality (but do not elaborate on how bad suppliers want more money!)
- Contain the exact time of the raise
Be upfront about the change
Let’s begin by stating one important fact – it’s in your best interest to ensure clients are aware of the price change. In the worst-case scenario, a client may argue that you tried to hide the real price and therefore they aren’t obligated to pay the difference.
This is why it’s best to:
- Inform your clients in advance – they may need to reassess their budget or consider alternative options and yes, you owe them this possibility. One month is a minimum, the perfect period will be two.
- Announce it directly – when you have a regular in the chair, plainly tell them about the incoming change.
- Post the update on all your social media fan pages and on your website.
- Display the information around your reception area.
- As soon as the raise comes into force, update your price menu everywhere – immediately!
Tip: Use the Message Blast feature in your Booksy system to send a direct and elegant announcement to all your customers.
You are going to lose clients. It’s unavoidable – about 10% of them will not rebook after the price rise. However, some clients are worth losing – remember that not everyone is your target. And the new pricing will quickly make it up for you.
Remember to keep track of your statistics – they will be the best indicator of whether or not your raise was effective. An advanced salon management system that delivers financial reports and allows you to communicate with your customer base directly will be your most effective supporter during the process of adjusting your price list. Get yours today and see what a change it makes!