When is the Right Time to Raise Your Prices?

December 20, 2019

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Let’s answer the age-old question, how do you raise your prices to match the value of the services you’re providing without jeopardizing losing clients?

 

Here are a few signs that you should raise your prices:
·        You cannot keep up with supply and demand

 

·        You’re notoriously turning away new clients because you’re overbooked
·        The cost of running a business is not balancing out with your profit margins
·        You invest in education and quality products and are not seeing a financial return
·        Your competitors are charging significantly more than you for similar quality services

 

Now that you’ve determined that a price raise makes sense for your business, let’s go over how to best execute this new change for your business and clients:

 

Calculate your worth- Do the math and figure out how to calculate exactly how much your and your teams’ time is worth to help calculate the right cost changes. Using Meevo 2’s productivity report, you can determine that once you reach 75-80% productivity, it’s time to raise prices because you’re maxing out your capabilities, turning away new clients, and struggling to rebook repeat clients.
 

 

Millennium Tip: We recommend raising your prices by a significant percentage like 20% to achieve the results you’re looking for, as it is a percentage significant enough to make a difference in bookings.

 

Explain your costs- Be straight forward and communicative! Let clients know that you’re raising your prices and why- (the quality of your works, the education for your team, etc.) and show why it’s a worthy investment. Make sure to explain, but don’t apologize. Communicating openly with your clients is the key to maintaining strong relationships based on trust to minimize the amount of client loss that occurs with any price increases.

 

Plan the rollout- Make sure to inform your clients of the price change at least 1-2 months in advance so that they can prepare appropriately. Socialize the changes on social media, through signs throughout your salon or spa, and consider adding a small note at each station notifying your clients of the upcoming changes.

 

Coach your team- Ensure that your team is up-to-date with the price modifications rolling out in your salon or spa so they can speak to them confidently and intelligently. Coach them on key points to best equip them for customer questions or potential confrontations.

 

Provide value- Make sure your prices and services are worth it. Consider rewarding long-time clients or clients with memberships by adding a little something extra to their next few services, like a hot towel treatment, or small upgrades to thank them for their continued loyalty during this period of change.

 

Did you love these pricing tips for your salon or spa? Make sure to let us know by following us on Instagram @SpeakMillennium and liking us on Facebook.

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