In the business world raising prices is normal. A salon price increase notice is fine when the demand is higher than the supply. For example, when bookings are more than 85% of capacity for a period of two to three months, this is a good time to increase the prices.
A periodic increase in prices is also normal. The cost of living generally increases constantly. Operating costs rise, and consistent work and quality deserve a salary raise, usually after. 12 to 18 months.
Raising prices for good performance within a salon might seem contradictory. On one hand, it is a reward for good work. On the other, some feel that it could chase away loyal clients.
Experience shows that it does not lead to the loss of long-time clients. At least not when the reasons for the increases are legitimate and supported by the figures.
However, announcing the rise in prices can be an awkward experience. When it is done with confidence and the guarantee that the quality will remain constant or even better, most clients will accept it.
This article is a guide for this process. It offers suggestions and tips on how to inform your clients of the price adjustments and shows what channels can be used to transmit the new pricing.
Know Your Value
Knowing the value of your business requires taking a couple of factors into account. One of the most straightforward is the cost of keeping the salon in business and how much is needed to break even. Other factors to consider are the quality of the business and its services and the time and effort put into maintaining and improving.
Any business owner who is eager to improve quality and invest in it will be able to rationalize adjusting their prices accordingly. It might be difficult to discern the right time to raise prices The following are some useful questions to guide your decision-making.
- In the past couple of months have I finished any relevant courses or obtained new certificates?
- To continue providing the same, or higher, quality of service, am I still using the same products? Has the price of the product increased?
- Was it necessary to purchase new equipment to guarantee a great service?
- Is the salon busier recently? Is it because customers are so happy with the treatments that they tell their friends about it?
- Are you receiving big tips, not in proportion to the current price of the treatments received?
If any of these questions can be answered with yes, then maybe it is time to raise the prices.
Give Advance Notice
It can be challenging to advertise the salon prices increase. It is often best to let your clients know that there will be a price increase. It is always possible that some will stop coming, but that can be taken into account.
Advising clients in advance of the changes is considerate and often appreciated. It gives them time to arrange finances and decide when they can next visit the salon.
Include staff in the announcement of the price changes.
Consider how often the average customer comes for treatment. Some may come irregularly, so if the average is once every six weeks, ensure the notice is given at least six weeks before the new prices become effective. Thus, the clients will see the notice at least once before their new appointment.
Practical ways of announcing the price increase are with a notice on the counter, the website, a social media page, or via an email. Make sure that the notice is worded in a kind, polite, and professional way.
An advantage of the advance announcement is that some may want to book an appointment beforehand so they can pay the old price. This means extra busy times. Use this time for special deals and discount packages.
Transparency and Confidence
The secret to gaining a customer’s confidence is transparency. Notifying in advance is a way of being transparent. It might seem easier to raise the prices without advance notification but that will likely be a shock to loyal clients. The advance notice honors the trust of your valued clients and gives the salon owner a basis for following through with the new pricing.
Keeping the former prices for some of your oldest clients might seem fair and reasonable. In reality, it undermines the strong brand that has been earned over many years. It implies that the rise in prices is not fair or necessary. Neither is it fair to the newer customers who must pay the higher price. Raising prices is the business owner’s right.
Focus on Adding Value
You can make the salon price increase process smoother by finding ways of adding value to the services. The reasons for raising prices may be different. It could be to offset any increase in rent, pay for an upgrading course, or the annual salary raise for the employees. These are necessary costs, but generally not the client’s concern. They will usually expect an increase in quality, or quantity, of the services.
So, to counteract the price rise for your clients, you can give them something extra. Especially during the first couple of weeks after the increase.
This can include small complementary services or a point system for loyal customers. Assure them that your staff has excellent training and is completely up to date with the latest trends. Show that their favorite products have also increased in price. The COVID-19 pandemic can be used as an argument to raise hygiene standards.
Do not just use well-chosen words. Give the best service possible. Make every customer feel special and pampered. With these efforts, they will appreciate and accept the price increase.
Thank Clients, Stylists, and Therapists
Take time to openly congratulate the skills and experience of the therapists, stylists, and other employees. They work hard to make the salon work well.
Take time to sincerely thank clients for their loyalty. They have taken their hard-earned money and spent it because they trust the salon and the employees. Take the opportunity to be transparent about the price increase.
Make sure that they understand why the costs have risen. This might not work with every customer but most are understanding.
Use Direct Communication
Direct communication, especially with the most loyal clients, brings the best results. Give them a call and tell them that the price of their favorite treatment has increased. Or take time, when possible, while performing the treatment. That allows them to ask questions and to have an honest, open conversation.
For other customers, an email, a letter, or a text message suffices. Tell them about the price increase and take the opportunity to communicate updates in the menu. When composing the message make sure of the following:
- Be brief and to the point, but keep the tone kind and sympathetic.
- Give the reasons behind the rise. Focus on maintaining the quality levels. Avoid complaining about rising costs of living and suppliers demanding more money.
- Be clear about the date the new prices will take effect.
Make Reasonable Changes
How much should the prices be increased? Maybe prices have not increased for some time. However, do not take one opportunity to make up for all the lost finances from the past. Make sure to review the costs once a year. That makes it easier for the client to come to terms with the increases.
The price increase depends on many of the factors described above. However, as a general rule, a price increase should not be more than 10%. Usually, a ten percent increase should cover the increases in costs, without scaring customers away.
Be Prepared to Defend the Changes
After announcing the price increase, customers will likely come with questions and some may try to argue against the new prices. This is the time to be firm yet kind and explain why it is necessary to raise the prices.
A positive way to do this is by showing how the salon is different from all other salons. This could be because of special treatment that no one else offers or anything else that makes the salon stand out.
Hopefully, it will not come to a strong discussion, but it is good to be prepared and have a few comments ready. Some things to keep in mind are:
- Explain that suppliers continue to raise their prices and also increases the cost of the rent. Simply state the facts. Do not complain about these increases.
- Show the customer that the salon and the workers have reached an exceptionally high level of experience and skill. Also, the demand for the salon’s services has increased. The prices are at a similar level as salons of a comparable quality level, but that the salon’s prices continue to be competitive.
- Emphasize how the increase benefits the client. They will receive better quality products and the treatments are performed with the best equipment. This will improve their experience. In the case of over-capacity, raising prices can help to free up time and give an even better service to the most loyal clients.
Ending thoughts on salon price increase notice
Salons need to raise prices occasionally, to continue in business. Communicating a salon price increase notice effectively is an essential part of the process. An increase is needed, but hopefully without losing clients.
A price change will make it very clear who comes only for the low prices and who enjoys the quality of the salon. So, if some choose to leave, do not take it personally. They are simply looking for a cheaper option. It is their choice. The business, not a personal hobby project, it is your career.
Investments are necessary for the salon to thrive. A price increase is a form of investment and it should bring returns. It is possible to lose around 10% of your clients after a price rise, but the remaining ones love your salon and services and are willing to spend a little more.
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