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The how-to guide for increasing prices in your salon

5 Oct 2022 by Kitomba

Let’s talk price increases. A controversial and almost taboo topic, raising prices in your salon, spa or clinic can be a scary thing to do. Discussing anything financial is an uncomfortable topic for most people, even more so when the price you’re setting is for a service! However as with all businesses looking to establish themselves for the long term, it’s a necessary part of your business plan, and should be incorporated as such on a regular basis.

As costs increase globally, many businesses within the hair and beauty industry will find an overall increase of their overheads, as well as rising staffing costs, escalating supply costs and of course inflation.  

Never fear though! We’ve complied our top tips on the what, when and how of increasing prices in your salon, spa or clinic. Read along to find out how you can make this transition as smooth as possible for yourself, your staff, and of course your salon clients.

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What should you be increasing your charges to?

Every salon, spa or clinic, and indeed most businesses in general, should have a pricing strategy laid out as part of their business plan. What your strategy is will differ slightly from salon to salon, but the key is to maintain this same pricing structure so you can be implementing a similar increase as necessary – pulling prices out of thin air or changing them willy-nilly won’t help when it comes to analysing your overall pricing. How do you know what you should be charging if you don’t know why you’re charging what you currently are?

Let’s talk strategy

Don’t undervalue yourself, your staff, or your service, and don’t be afraid to implement a pricing strategy that makes you money – this is why you’re in business after all! Here are a few tips from top business coaches on different pricing strategies you could implement in your salon.

Estelle Carroll, a salon business coach from The ZING Project, recommends starting with your breakeven point, or what your total overhead costs are and working out what your hourly charge should be from there, factoring in service level, skill set, and overlap salon environment as well as the breakeven point. You can read more about her tips to increase prices without losing clients here

Malcolm Gibbons, owner of Salon Business Coach has a different take and recommends looking at how your profit margins are affected by changing prices – both by implementing sales and also by increasing prices. He suggests starting simple by putting your prices up by at least 10% to increase this margin and also keep you competitive. Read more about his position on whether you’re being paid what you’re worth as a salon owner: Are you being paid what you’re worth?

Blog Pull Quotes_Malcolm Gibbons, Salon Business Coach_2

Read more about using a salon business coach to help you strategise!

Align your pricing with your business model

While pricing strategy may vary from salon to salon, what should remain consistent is that your pricing aligns with your particular business model! It’s a great idea to look around at what other salons are charging but make sure you’re comparing apples with apples – like-minded salons offering a similar service level, staff skills and quality of products. 

Think about adding value to your services at the same time as the price increase – could you better the client experience by expanding your refreshment menu, or improving the overall ambience of your salon? Be sure to factor any added extras into your pricing.

Another thing to think about is the structure of your staff – do you have some stylists or therapists who are more experienced than others? Most salons do, so think about introducing a pricing hierarchy in line with this. It’s quite common to charge higher fees for more experienced stylists, and run it down to the least experienced, this way any clients who have concerns about pricing do have options.

When should you be increasing pricing?

Again – there is no right or wrong answer for this! When you implement a price increase is very dependent on you and your salon, although most salon business coaches recommend at least once a year. Think about regular gradual increases like an annual 10% rather than suddenly doubling prices as you realise you haven’t increased anything in the last two years.

The benefit to reviewing your overall pricing on an annual basis is that it’s easier to see what has changed, and by how much, which should give you a benchmark for changing pricing moving forward.

Blog Pull Quotes_Malcolm Gibbons, Salon Business Coach._3

Some other key things to consider when thinking about the ‘when’ of increasing prices:

Demand vs supply

Is your demand higher than you can currently supply? If you’re booking out appointments quicker than you can handle, this is the perfect time to be reviewing your pricing! 

If not, now may not be the best time to raise prices. Instead, focus on improving things like your rebooking rate, or client loyalty which will help you fill that appointment book. 

See more about how Kitomba can help increase bookings in your salon.

If certain areas of your business are full, while others are not so much, think about staggering price increases in line with this.

Numbers talk

Have you experienced recent increases in rent, bills, supplier invoices, or other overheads? 

If so, the time is ripe to be looking at your own price increases. 

Just be clear to make sure that whenever you decide to change your prices, this is communicated with all stakeholders including staff and both existing and potential new clients.

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So, how do you go about it?

Simple – communicate the price increase with your clients and staff! Although seen as a courtesy move by some, relationships form quickly and deeply in the hair and beauty industry and going out of your way to convey this information with your clients is invaluable.

Communication is key

Your staff are the face of your business, so it’s imperative to keep them in the loop with changes like this. Make sure the whole team are aware of the price increase, and when exactly it will start to take effect.

The other line of communication to be aware of is of course your clients! Think about how you would usually communicate with them, and simply use the same platforms to spread the message that your prices will be changing. 

Some good examples of ways to communicate are:

  • Email: think about incorporating this into a monthly newsletter, or in addition to something else you would like to communicate.
  • SMS: this would be a perfect way to communicate with clients who may be booked in for after the price change takes effect.
  • Social media: a simple post on your Facebook or Instagram.  
  • In-salon: a discreet notice on your reception desk. 
  • Online: you could also add this to your website, or a note on your online booking platform.
  • Staff: utilise your staff to chat to regular clients, or those you think may be difficult.

Make sure you’re giving enough notice and also advising customers of when the change will occur.

Learn how to use your salon software to help communicate the price increase to your clients. 

Say it with confidence

Remember to be confident! This is your salon and your business, if you’re working long hours, and adjusting to increased costs then price increases are simply necessary. You shouldn’t be apologising for charging what you’re worth or wanting to make money – remember why you got into business in the first place. 

Blog Pull Quotes_Estelle Carroll, salon business coach at The ZING Project

It’s normal to be concerned about raising salon prices, however if done with a strategy in mind, and efficient communication, it should become a regular occurrence, and will absolutely help your salon to success in the long-term.

Blog Pull Quotes_Courtney C. Stevens, Author

Does your salon or spa software help you manage your finances? As well as the basics required to operate your business, Kitomba also offers advanced features including Kitomba Scoreboard, Kitomba Benchmarking, and a range of other reports to help keep on track with your salon finances. Book a free demo today to see how Kitomba can help in your salon!

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