In the wake of the COVID-19 lockdown, many salon owners were forced to temporarily increase their prices to help cope with the limited capacity and increased cleaning and PPE requirements. Customers accepted this as many hadn’t had access to beauty services for quite a long time. In this situation, increasing prices was accepted and understood. But what about when you want to raise your prices any other time of year?
Raising your prices is a touchy subject for many salon owners. Knowing how to navigate this difficult area of running a business doesn’t come naturally to everyone. If you find yourself running away from the topic, you need to read this article. We’re going to run through 10 of the top tips to help you raise your prices without raising any eyebrows.
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The top reason salon owners fear raising their prices is that they worry no one will be willing to pay the higher rates. If you have a loyal following and good relationships with your customers, they will be able to handle a 5 or 10% increase without feeling the need to head straight to your competitors. Remember you run a business, not a charity, and you deserve to make a good living from your hard work and dedication.
Still not convinced you can raise your prices? Look at the demand for your services. Are you booked up more than 75% of the time during the week? And are you consistently hitting close to 100% for evening and weekend appointments? That’s excellent news, but it’s also a sign that it is time to raise those prices. The market has told you there is a high demand for your services.
If you increase your prices and lose a few customers, the increase from the remaining customers will make up for this loss. You’ll then have more space to attract the higher-paying customers that will help your business to flourish.
Don’t just drop a price rise and hope no one notices. Your customers deserve to be told about the changes to be able to make an informed choice. Don’t be shy about announcing the price change with a clear deadline and explain why you are making the changes. If you can frame it correctly, it stops being as simple as wanting more money in the bank. You can actually sell the price increase as a benefit to your loyal customers.
Upgrading your products, offering additional services or even offering a more lucrative rewards programme are all great things you can announce with your price rises. By framing it as a benefit to your customers and an improvement of your services, it becomes easier for your customers to see why you are increasing your prices. They will see the change in value and appreciate why you took the steps.
Remember the first tip in the list when you make your price changes. You should never feel the need to apologise for charging more for your services. If your business is booming and you’re increasing prices to be able to keep up with demand, that’s not something you should feel the need to apologise for. Own your success and your loyal customers will appreciate you all the more. If people are upset about your price increases, then they don’t understand or appreciate your value. These aren’t the customers that will help your business to thrive.
Increasing your prices is a big step for any business. You might think you’re ready to go ahead with it one night, but talk yourself out of it by the next morning. But if you do decide the time is right to make your price changes, be confident and single-minded about it. Don’t be tempted to back down or reverse your decision due to a bit of negative feedback. It’s normal to amplify the negative voices while minimising the positive voices. So one bad piece of feedback can feel more powerful than all of the positive comments that are flooding in. Focus on the good!
Customers might have some objections and questions, so you need to be available to answer them. Shutting down the conversation or removing negative comments could turn your price increase into a very negative experience. Your loyal customers who have been there since the start deserve the right to ask reasonable questions.
They might feel upset that they have been priced out of your services. Take it as a compliment that they care enough to question you. To help ease the transition, you could offer off-peak pricing at the old rate. This could help to retain some of those customers that might struggle with a price increase while freeing up peak appointments for full-price customers. It’s common to pay more for peak-time services, so this is a structure customers will already be familiar with.
Price increases are easier to handle if they are part of an annual review. Some years, you might decide to leave your prices as they are, so your customers will see this as savings in the bank. They know you could have increased but chosen not to. So when the time comes to increase your prices, they will feel that they have been getting such good value for the past two years that the raise will be almost expected.
Don’t be afraid to sing your own praises in the same conversation. You’ve worked hard to reach this point and your customers might not see what goes on behind the scenes. Shine a light on your accomplishments as a salon, whether that means awards, new training or milestones.
Perhaps you’ve recently opened a new site? Or someone on your team has been recognised at an industry awards show. Shout about your biggest achievements and tie this news in with your price raises. It will help to answer some of the questions about why you feel it’s a good time to raise prices.
Don’t fret too much and don’t overthink it. Sometimes the best action is to just act! When you started your business, you probably set your prices as low as possible because all you wanted to do was be able to keep the lights on and pay your staff. But you can’t stay in this position forever. You need to recognise the value in your business and be willing to bet on your future.
If your pricing only allows you to cover the bare minimum, you will never be able to develop your staff or grow your business. Worse still, when your pricing only covers the basics, it could lead you to cut corners to save money. Which do you think your customers would prefer? A business that recognises its own worth enough to increase prices or one that cuts corners to save money? Of course, it’s the first one!
Want to raise your prices but aren’t sure if you’re ready yet? The right salon software could help you make this key decision. With Salon Iris salon software, you can generate performance reports so you’ll easily be able to see when you are consistently reaching your sales targets. Once you hit this point, you can run projections to see what you happen if you increase your prices by a small amount. Once you see the numbers in front of you, you won’t hesitate to print out those new price sheets and update your website.