Raising prices while keeping clients happy is a difficult balancing act, but not an impossible one.
Clients are aware that prices may increase at some point to adapt to market conditions, but complaints are likely to follow when this happens, and we may even lose some of them along the way. However, we can't hold back our business's growth because of this.
The
need to implement a price increase can arise from different reasons, which we'll outline below, but in any case it's necessary to have the knowledge and confidence to implement the price increase correctly and professionally.
Reasons that may lead us to increase prices:
- Price increase due to strong demand.
- Price increase due to rising overhead costs.
- Price increase due to a new technique or specific training.
Price increase due to demand:
If your salon is full of clients waiting and you and your staff are working long days trying to keep up with demand, it's very likely that you'll soon start to feel the physical and mental strain of this — it's simply a fact.
If your appointment book occupancy is around 80%-90%, the price increase that could be implemented would be around 10%, and the drop in clientele would probably also be around 10%. We'll serve fewer clients, but earn the same amount of money or more, while gaining time we can dedicate to improving customer service, training, staff motivation, and so on.
Increase in the business's overall costs:
For example, due to a change of location, a renovation of the premises, higher rent, switching to a higher-quality brand, etc.
In this case, it's essential to calculate the cost per service including all the variables that affect it (disposables, laundry, patches, lashes, adhesives, etc.). In general,
the cost of supplies should represent 10% of the service cost.
It's also important to consider the time each treatment takes, because, for example, a price of €60 for a 60-minute treatment can be profitable, but it's not as profitable for a treatment that, for the same price, takes twice as long. You should therefore consider that you need to charge more if the time involved is greater.
Specialization
It makes sense that if you invest in training, this investment should generate a return in the form of income. New techniques such as volume extensions have created a level of service and luxury that more than justify a price increase for the service. Specialization is a fundamental part of the business and comes at a price, especially when it sets you apart from the competition.
Whatever the reason behind the price change, it's important to inform clients of the change at least a month in advance, either by sending an email if you have a database, or with the new price list displayed at the salon.
Of course, there will be complaints from clients, which is why staff need to be properly briefed so they can give clear, concise and consistent answers, but providing information is important so the client understands the situation.
One final recommendation: try to maintain a “clean,” transparent pricing strategy, and don't get drawn into price wars with your competitors.
We hope you find these tips useful; if you think they could be helpful, don't hesitate to comment and share.
