Everything is going up in price these days. Rising costs for supplies, rent, utilities and salaries impact the bottom line so a price increase in your services seems in order. Yet raising your rates isn’t easy when you know clients, too, are facing higher costs in their day-to-day expenses.
Long-standing clientele may understand your need to raise prices on treatments and products. However, a price increase can impact your business and send some clients looking elsewhere. Even a modest increase might encourage some clients who always are comparing prices to look at other providers.
When to tell clients
You can’t control how a client will respond to a price increase, but you can control how and when you convey the news. No client wants to find out that you’ve raised your rates at the end of a session.
Give clients at least a month’s notice that you plan to raise rates. At the same time, put up a notice about the change by reception and/or in the treatment rooms. Indicate that prices will be going up, by how much and the effective date. This way, you make sure everyone has been informed. If you send out a newsletter, include price increase information and effective date.
Be prepared for questions
Some clients won’t be surprised at the news in today’s economy. In fact, loyal clients may be supportive, especially if you haven’t raised rates in a long time. Other clients may have questions about timing and the percent of the increase. Be prepared to answer them with credible and reasonable reasons. You even may want to write up a list of possible questions and answers before you announce the price hike so you’ll be prepared.
In discussing the change, always point out how the increase benefits both you and your clients. For example, you may be using an ingredient in a product that customers really like but its rising price is hurting your profit margin. Let your customers know that the increase will enable you to keep using that ingredient rather than switching to something lower quality or less effective.
It’s also important to emphasize your value. No doubt long-standing clients will know that your spa or massage practice stands out from the competition. Still, be prepared to talk about the value of your service offering vis vis-à-vis other establishments. You can gently remind them of your willingness to accommodate last minute appointments or the addition of an extra service from time to time for little or no extra charge.
Provide options
Another way to present a price increase is to give client options. Put together treatment options that include a skin treatment and massage bundle at a discount versus combining the two at the going rate for each. Or you might want to consider offering clients a package of treatments. Enable clients to sign up for a set number of massages, which would provide a discount over individual ones.
Prep your team
It’s important that everyone on your team not only knows about the increases, but understands the reason for them. Conduct a training class giving everyone an opportunity to ask questions that a client might have. This way, there will be consistency in the message about the increase from every member of your team
Price increases are an inevitable part of running your business. You will find most clients will be on board as long as the new rates are fair in today’s marketplace. After all, no one wants to see a valued service provider shut down because they can’t keep up with their own rising costs.