How to price your salon services without losing clients

Let’s talk about the conversation every salon owner dreads: raising prices.

You know your costs have gone up. Rent is higher. Products cost more. Your team deserves raises. But every time you think about increasing your prices, a voice in your head says: “What if my clients leave?”

So you don’t raise them. You absorb the costs. You work harder for less profit. And slowly, quietly, your margins shrink until you’re barely breaking even despite being fully booked.

Here’s the truth: most salon owners are undercharging. Not because they’re bad at business, but because they’re guessing at prices instead of calculating them. And when it comes to price increases, they wait too long, raise prices too much at once, and communicate it poorly.

Let’s fix both problems. Here’s how to price your services correctly from the start, and how to increase prices strategically when costs go up – without losing the clients you’ve worked hard to build.

Why most salon owners are undercharging (and don’t realise it)

Before we talk about what to charge, let’s understand why so many salons are underpriced.

You’re pricing based on competitors, not costs

You look at what other salons charge and price yourself similarly. Maybe slightly lower to be “competitive.” But here’s the problem: you don’t know their cost structure. Their rent might be half yours. They might be using cheaper products. They might be barely profitable too.

Pricing based on competitors without knowing your own costs is guessing. And guessing doesn’t pay the bills.

You’re not accounting for all your costs

Most salon owners think about obvious costs – products, rent, wages. But what about:

• Your time as the owner (even if you’re not paying yourself a salary)?
• Equipment depreciation and replacement?
• Marketing and advertising?
• Professional development and training?
• Insurance, accounting, legal fees?
• The time you spend on admin, ordering, scheduling?

If you’re not factoring in ALL costs, you’re undercharging.

You set prices years ago and never reviewed them

Many salon owners set prices when they opened and haven’t adjusted them properly since. Meanwhile, everything else has gotten more expensive. Your costs have gone up 20-30% in the past few years. Have your prices?

You’re afraid of being “too expensive”

This is the big one. You worry that if you charge what you’re actually worth, clients won’t pay. So you keep prices low to feel “accessible.”

But here’s what actually happens: you attract price-sensitive clients who don’t value your expertise, and you repel the clients who would happily pay more for quality service. You end up exhausted and underpaid.

How to calculate what you should actually charge

Stop guessing. Let’s calculate your prices based on actual costs and desired profit.

Step 1: Know your total costs

Add up everything you spend to run your salon for a month:

• Rent and utilities
• Product costs (color, treatments, styling products)
• Staff wages and your own salary
• Insurance, accounting, legal
• Marketing and advertising
• Equipment maintenance and replacement fund
• Bank fees, merchant fees, software subscriptions
• Any other regular expenses

Let’s say your total monthly costs are $15,000.

Step 2: Calculate your working hours

How many hours per month are you actually doing paid services?

If you work 40 hours/week but spend 10 hours on admin, ordering, and managing staff, you only have 30 billable hours per week.

30 hours × 4 weeks = 120 billable hours per month

Step 3: Calculate your minimum hourly rate

Total monthly costs ÷ Billable hours = Minimum rate to break even

$15,000 ÷ 120 hours = $125/hour just to break even

But you don’t want to just break even. You want profit. Add at least 20-30% for profit margin.

$125 × 1.25 = $156.25/hour is your target rate

Step 4: Calculate service prices

Now price each service based on time + product costs:

Example: Full color service

• Time: 2 hours × $156.25 = $312.50
• Product cost: $20
• Total: $332.50

Round to $335 for pricing.

The easier way: Use a salon pricing calculator

Don’t want to do all this math yourself? Kitomba’s free salon pricing calculator does it for you.

Just enter:

• Your monthly expenses (rent, utilities, products, wages, etc.)
• How many hours you work
• Service time and product costs

The calculator shows you exactly what to charge to cover costs AND make a profit. No guessing, no complicated spreadsheets – just clear numbers based on your actual business.

When to increase your prices (and how to do it right)

Let’s say you’ve calculated your costs and realised you’re undercharging. Or your costs have gone up and your current prices no longer work. Time for a price increase.

Here’s how to do it without losing clients.

When to increase prices

Definitely increase prices when:

• Product costs have gone up significantly (10%+)
• Rent has increased
• You’re giving staff raises
• You’ve added new certifications or training
• You’ve upgraded your space or equipment
• It’s been 2+ years since your last increase
• You’re consistently fully booked (high demand = you can charge more)

How much to increase

For regular annual increases: 3-5% keeps pace with inflation. Most clients won’t even notice.

For catching up after years of undercharging: Don’t jump 30% all at once. Break it into stages:

• Year 1: Increase 10%
• Year 2: Increase 8%
• Year 3: Increase 5%

This gets you where you need to be without shocking clients.

For different client segments:

• New clients: Charge new rates immediately
• Existing clients: Consider a 3-6 month grace period before increases apply
• Long-term loyal clients: Optional – grandfather them at slightly lower rates

How to communicate price increases

This is where most salon owners mess up. They either:

1. Don’t tell clients at all (they find out when they pay – awkward!)
2. Apologise profusely like they’re doing something wrong
3. Over-explain and make it weird

Here’s how to do it right:

Timing: Give 4-6 weeks notice

Tell clients well in advance. This shows respect and professionalism.

Method: Multiple touchpoints

• Email to your client list
• Notice in salon (at reception, in bathroom)
• Mention during appointments
• Update website and online booking

Tone: Confident and matter-of-fact

You’re not asking permission. You’re informing them of a business decision. Be warm but confident.

What to say:

In email:

Subject: Important update about our pricing

Hi [Name],

We’re writing to let you know that starting [date], we’ll be updating our service pricing to reflect rising costs in products, rent, and ensuring our team is well-compensated.

Our new pricing will be: [List key services and new prices]

We’re committed to continuing to provide you with exceptional service and the high-quality products you’ve come to expect from us.

If you have any questions, please don’t hesitate to reach out.

Thank you for your continued support, [Your Name]

In person:

“Just so you know, starting next month, we’re adjusting our prices slightly to keep up with our rising costs. Your cut and colour will be $X instead of $Y. Everything else stays the same – same great service, same quality products.”

That’s it. Don’t apologise. Don’t over-explain. State it and move on.

What NOT to say:

• “I’m so sorry, but…” (Don’t apologise for running a business)
• “I hate to do this, but…” (Sounds like you’re doing something wrong)
• “We have no choice…” (Sounds weak)
• “Everyone else is raising prices…” (Not relevant)

Handling client pushback

Most clients won’t push back if you communicate well. But some might. Here’s how to handle it:

“That’s too expensive”

Response: “I understand costs are a consideration. Our pricing reflects the high-quality products we use and our team’s expertise. If you’d like to discuss options that might fit your budget better, I’m happy to chat.”

(Offer lower-cost services if appropriate, or accept that they might not be your ideal client.)

“Why are you raising prices?”

Response: “Like many businesses, our costs have increased – products, rent, and ensuring our team is compensated fairly. This adjustment allows us to continue providing the quality service you expect.”

“I can get this cheaper somewhere else”

Response: “You certainly can find lower prices elsewhere, and I understand that’s important. We focus on quality, expertise, and client experience. If that’s not the right fit for your budget right now, I completely understand.”

Don’t negotiate. Don’t match competitor pricing. Stand firm.

The bottom line

You didn’t start a salon to scrape by. You started it to build something successful – to use your skills, serve your clients well, and make a good living doing what you love.

None of that works if you’re undercharging.

Pricing correctly isn’t greedy. It’s smart business. It ensures you can pay your team fairly, use quality products, invest in your skills, and actually make a profit.

Your expertise has value. Your time has value. Your business deserves to be profitable.

Stop guessing at prices. Calculate them. Charge what you’re worth. And watch your business transform from exhausting to sustainable.

Ready to price your services correctly? Use our free salon pricing calculator to get personalized pricing recommendations based on your actual costs and profit goals. No guessing required.

Have questions about pricing strategy or managing price increases? Our team has helped thousands of salon owners optimize their pricing. Book a free consultation to discuss your specific situation.