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Articles > Read This Before You Raise Your Prices
April 23, 2019

Read This Before You Raise Your Prices

kim Kardashian, meme
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A Simplified Guide To Raising Your Prices

Business is good, your book is full and it feels like the right time to raise your prices. But four (very common) questions prevent you from making it happen: Is this the right time? How much should I raise them by? How do I tell my clients? How do I avoid losing clients? Below, we’re answering all four with the help of industry pros who know a thing or two about business so you can start making more money ASAP.

 

 

1. The Signs That It’s Time To Raise Those Prices

One of the biggest indicators that it’s time to give yourself a raise lies within your books. If you’re booked out 6+ weeks in advance, Kristen Ewing (@kristen.lumiere) says it’s either time to hire an assistant or time to raise your prices. Here are some other signs:

 

  • You invest in your education and stay up-to-date on the latest techniques. A higher knowledge and skill set equals higher prices.

 

  • Your name/handle has industry recognition. Whether it’s from hair competition nominations, sponsorships or someone else accrediting you as being at the top of your game, these are all huge indicators that it’s time for a price raise.

 

  • Your space has upgraded. Things like a high-end location, decor and amenities should be at a higher price.

 

2. How Much To Raise Them By

“It’s not just a $10 across the board type of scenario,” says Rochelle Golden (@rochellegoldenhairstylist). Here’s Rochelle’s formula for determining how much to raise your prices by:

 

  • First, add up all of your expenses for one month.

 

  • Then, calculate the hours you’re available for one month.

 

  • Divide your expenses by your available hours. “That is how much you have to generate to simply make it,” she advises.

 

  • Next, double that number. Rochelle says doubling that, for the most part, is the standard approach to setting prices.

 

  • If all of the above align, increase the doubled amount by 10 to 15 percent.

 

Check out the example provided by Rochelle below!

 

3. Telling Clients About A Price Change

We know, this part in the process is anxiety-inducing because you don’t know how clients will react. Will they be angry or completely understanding? Or worse, will they move on to another stylist? The most important thing is giving clients enough notice. Here’s what Kristen recommends:

 

  • Send out a mass email one month in advance about the upcoming price increase. “I add exciting things to the email that are happening in my career and add the price increase as a detail but not the highlight,” shares Kristen.

 

  • Once the new prices are in effect, be sure to let clients know about any price changes AT THE BEGINNING of an appointment. That way, they’re not totally taken off-guard when their routine root touch-up now costs 10 percent more.

 

And if raising your prices results in losing a client or two, don’t sweat it. “It can be disheartening when clients complain about price increases but you also have to realize that creates a space for new clients who are willing to pay,” shares Matt Swinney (@matt.swinney), L’ANZA Healing Haircare Global Creative Director. “In the end, people will complain either way, but be firm in your belief and your value.”

 

4. Stagger When New Prices Are Introduced

If the thought of increasing all your prices at once is causing you to lose sleep, Marion Shaw, author of “Waiting For The Busy Bus,” has two alternatives. The first is to pick and choose which services will get an increase this time around. “This organized approach can ease sticker shock and keep clients from spacing out their regular appointments,” says Marion. “After a year, pick two new services to increase and follow the same steps.”

 

You can also grandfather the new prices in based on existing vs. new clients. For example, Marion says to have a price increase be effective immediately for new clients but offer existing clients the price they are currently paying for two extra months. Trying this tactic could help prevent losing clients over higher pricing.

 

 

CLICK HERE to read the BTC community’s best advice for what to do with clients who are triggered by a price increase!