10 Tips To Raise Your Salon Prices Without Losing Clients

It’s no secret that the price of living has gone up and customers’ habits have changed over the last few decades. Yet, within the hair and beauty industry, there’s still a fear associated with raising prices. It’s important to realise that sometimes your salon prices just need to be adjusted. And if it’s done for legitimate reasons and you have numbers to back yourself up, then you shouldn’t feel insecure about your decision. Nowadays, trust often comes hand-in-hand with a brand name and leadership position. Think about raising prices as a given for heightened reputation. The good news is, there are strategies you can use to make your announcement go smoothly and ensure your clients stay loyal to the services you provide them.

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A Step-by-step guide to raising your salon prices

1. Know what you’re worth

How much does it cost to keep your salon open? What’s your break-even number? And most importantly, how confident are you with your level of services versus what do the numbers say? When Killian and myself were chatting with David Barnett, my first question was, “Right, but how do you know what you’re worth?” Let me tell you; it’s not as hard as it sounds. It’s all about your numbers and the experience you provide. He explains:

“Let’s say it’s 1,000 bucks or 1,000 Euro a month to keep the lights on. Well, if your average ticket, then, is 50, 50 Euro, $50, whatever it may be, then how many clients have you got to see in order to do that?

Then we break it down to a daily basis. All right? So obviously, you know, if it’s… if it’s 1,000, you’ve got to see 20 clients, right, which, of course, wouldn’t be hard to do. So you’re seeing one a day, you can afford to keep the lights on. But you know, if it ends up being 4- or 5,000, then, you know, obviously, the numbers are a lot higher.

But you need to have that number. It’s so crucial. And the majority of salon owners that I work with, when we first sit down, and I say, “Okay, what’s the break-even to begin with,” they don’t know it, not off the top of their head. And we’ve got to know that number. You know, you’ve got to be… have that intimate relationship with your business that you know exactly how much it is in order to keep the lights on.

And then you can start to say, “Okay, this is where my prices need to be. This is where I can afford to have them.” Once you’ve found out that price point, then it’s like, “Okay, now how much more am I worth?” You know, so, you know, my experience, obviously, comes into that, you know. Where you’ve worked previously. How many years you’ve been in the business. What the experience for the guest is like, you know.”  (click here for the episode’s full transcript)

Of course, added to that you can look at what extra services you’re providing, what others aren’t offering that you are and which makes you unique. You can also have a look at other similar salons’ pricing lists and use them as benchmarks.

“The thing is, first and foremost, is that of salon owners and stylists are fearful of raising their prices, right? They are actually more fearful than the guest, you know. I mean, they’ve kind of got this thing in their head that, ‘If I raise my prices, nobody is gonna come in.’ Right? Or, ‘Everyone is going to be so upset with me. And if I keep them low, I’m gonna be packed.‘”

– David Barnett, Salon Coach & Educator at The High Performance Stylist on Phorest FM Episode 72

Listen to David Barnett’s full interview and subscribe to the Phorest Blog Podcast here:

2. Make sure the numbers show that you’re ready

From here, there tends to be two scenarios:

  1. You’ve figured out that you’re worth more than what you’re currently charging.
  2. A stylist/therapist has come to you asking for a raise.

Now what? Well, based on his experience in the industry, David has got it down to a science. In Phorest FM episode 72, he describes the formula in detail.

Here, we’ll share some bullet points:

  • Make sure that the stylist/therapist is 75 percent booked.
  • Track the number of services (not clients, actual services) the person has done in a month. Make sure that number is at 130 at least.
  • From three months ago right up until today, track the retention rate. Make sure it’s at 60 percent.
  • Especially for new staff, track new clients. Get them to have at least eight new clients per month. Don’t get bogged down with this one if the stylist or therapist has an established clientele and is booked out.
  • Get the retail per client ticket to at least €/$/£10.
  • Make sure you seek ten add-on services per client.

As he says, if you are hitting those benchmarks, then it’s a guarantee there won’t be a problem for you to raise your prices.

3. Aim for added value rather than plain profitability

While you want your salon to be profitable, increasing prices for profitability is the last message you want to convey to your happy and loyal customers. Instead, add value to your product or perhaps add bonus services. It doesn’t need to be big; just a little something that would cost you little to nothing, but would give your clients the impression they’re getting more for their buck.

For instance, you could offer gift wrapping for your retail products or possibly re-evaluate the TreatCard points attributed to your product and services affected by the price increase.

4. Plan your communication strategy

Negative reviews and complaints left online can quickly get out of hand, inherently hurting your overall online reputation. The first thing you probably have to consider when raising your prices is yes, your current costs, but also any cost increase probable to happen in the next year or so. Communicate your changes internally, and make sure your staff members have the same explanations to the questions you might get from clients.

Next step, the general announcement. Send your clients an email, post your press release on your salon’s website and announce the changes on your social media channels.

5. Think numbers and packages

This works exceptionally well for retail products in your salon or spa. By creating different-sized or additional packages, you can make your old packs seems like a bargain, even at the new price. For example, imagine you were selling five products for £/€/$ 100, but you need to raise that price to £/€/$ 120. By creating additional 3-products retail packs for £/€/$ 80, you make the 5-pack seem like a deal – even at its newly increased price. Clever, right?

salon prices

6. Just do it

I came upon this quote the other day and thought it was worth sharing as it sums up this whole point: “Don’t beat yourself up; don’t lose sleep over your decision. Here’s a secret: Your best customers will be surprised that you didn’t raise prices sooner because they value your work.”

7. Explain, but don’t apologise

Robert Cialdini, in his book Influence, illustrates the importance of explaining your actions to customers. In his example, he asks you to imagine a woman in line at a copy machine. When she asks to cut in line, sometimes she’s successful. When she explains she’s in a hurry, however, her success rate jumps up to 94%. If you don’t give your clients a valid explanation for raising your salon prices, best believe they will invent or speculate on one.

8. Thank your clients & celebrate your stylists or therapists

Why not celebrate your stylists and therapists achievements and experience? Make it a time to say congrats – to your staff – and thank you – to your clients. Sarah Schupp, from UniversityParent, explains: “The first thing I do when I increase prices is say thank you to customers. I sincerely express my appreciation for the risk they took on me, and then I’m transparent with them about why I need to raise prices. I make sure they understand why we’re asking for more money and why our product is worth more now than when they started. It doesn’t always work, but most customers tend to be understanding.”

9. Make yourself available to chat

When you’ve announced your new salon prices, be prepared to answer any questions. Don’t brush these questions off. If you’re worried about negative backlash, taking the time to chat with your clients will smoothen the entire process.

10. Offer a transition option

If you can afford this, offering transition options – slimmed-down versions of your re-thought/re-priced service – can help ensure your customers on a tight budget stay with you. People will be drawn to compare your new salon or spa packages prices and find the one they feel offers the most value for their needs. Another option is to give your clients an opportunity to purchase or redeem products and services at the old rate for a limited time only – time you need to define.

Sorting through all these details allows you to remain fully transparent and adds an incentive for clients to stay loyal while you increase your salon prices! Don’t forget to download your free email announcement template! Got feedback? Let us know either in the comments below or tweet us @ThePhorestWord! (Pssst! We’re on Instagram too!)

Thanks for reading! #LetsGrow

David Barnett is offering free 30-minute consultations for anyone looking for some advice or help with an aspect of their business. Pick a date and time that works for you – it’s fast and easy:

This post was originally published in July 2016 and has been updated for accuracy and comprehensiveness. Featured imaged shot on location of GMALE Barbers, in Dublin. © 2017 Phorest Salon Software.

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