Raise your prices once a year, by an amount you have worked out from your own costs and time rather than from what the salon down the road charges, and tell clients before it happens: a short message to regulars about four weeks ahead, a line on your booking page and at the desk, and every listed price changed on the same day. Keep existing bookings and vouchers at the price they were sold at. Clients rarely leave over a modest, well-explained increase. They leave over a surprise at the till, or a price that changes three times in a year.
Work out what you need
Start with what an hour of booked time costs you before you have earned anything. Add up a normal month's rent, power, insurance, software, laundry, wages and your own pay, and divide by the hours you are actually booked with clients, not the hours you are open. That gives your cost per booked hour. Then, for each of your ten most-booked services, add the product it uses to its share of that hourly cost.
Compare each result with the price. Services that barely cover their cost are where an increase is needed most. Services with a healthy margin may not need to move at all, and leaving them alone softens the overall change.
Decide the amount and the shape
- Round figures. $130 reads better than $128.50, and nobody has to work it out.
- Not everything at once. Raise the services that need it. A salon that lifts the facial and leaves the brow wax alone has made a smaller change than the new menu suggests.
- Once a year. Pick a month and stick to it. Clients cope well with a predictable yearly change and badly with several small ones.
- Mind the timing. Straight after a run of complaints is a poor moment. A quiet month with good notice is better.
Tell clients before it happens
Regulars deserve to hear it from you, not from the till. Send a short message about four weeks ahead saying what is changing, from when, and one plain sentence of why. For example: "From next month our facial will be $130. Product and running costs have gone up this year, and we would rather tell you now than surprise you on the day." No long apology, and no essay about inflation.
If that message also promotes anything, such as a new treatment or an offer, it becomes a marketing message, and the Spam Act's rules on consent and unsubscribing apply; ACMA explains them. Keeping the notice to the price change alone avoids the question.
Put the same notice on your booking page and at the desk for the same four weeks.
Change every price on the same day
Write down every place a price appears: the menu at the desk, the website, the booking page, your online profiles, the price list in the window, the gift voucher page and whatever answers your phone. On the day of the change, update every one of them. A price on your website that is lower than the one charged at the till is the kind of thing consumer law takes an interest in, and it is certainly the kind of thing clients remember.
That list is also a good reason to keep your service menu in one master copy and update the others from it. If an answered line quotes your prices, change its services list at the same time. On Glow Line, the next call after you press Save uses the new price; see change what the assistant knows.
Honour what was already sold
Appointments booked before the notice went out should keep the old price, and saying so in the notice heads off the obvious question. Vouchers sold with a dollar value are worth that value. Vouchers that name a service are best honoured for that service, which is one reason to print a value on them in future; the details are in gift voucher rules that do not bite.
Answer the question of why
Most clients will not ask. The few who do deserve a short, confident answer, the same one every time: costs have gone up, and you would rather keep doing the work properly than cut corners. Do not compare yourself with other salons or offer a private discount at the desk. A discount given to whoever complains is a price rise for everyone else.
A worked example
Juniper Ledger Beauty is a two-therapist salon. The owner works out that the business costs about $68 for every hour the therapists are booked with clients, before product. A 60-minute facial uses about $14 of product, so it costs $82 to deliver against a price of $120. A 20-minute brow shape and tint costs about $26 against a price of $35. Waxing has plenty of margin and is left alone.
She raises the facial to $130 and the brow shape and tint to $38. The salon does about 90 facials and 160 brow appointments a month, so at the same volume that is 90 times $10, or $900, plus 160 times $3, or $480: $1,380 a month more.
Could she lose enough clients to cancel that out? At $120, 90 facials bring in $10,800 a month. At $130, she would have to fall to 83 facials a month, losing 7 of her 90, before the change cost her anything on facials. She sends regulars four weeks' notice and keeps booked appointments at the old prices. Three months later she is doing 88 facials a month.
Mistakes to avoid
- Apologising at length. One sentence of why is enough. A long apology suggests you think the new price is unfair.
- Leaving one price list behind. The window display or an old profile showing last year's prices causes arguments at the till.
- Raising everything by the same percentage. It ignores which services actually need it.
- Staff who do not know. Tell everyone who answers the phone before the notice goes out, so the first client to ask gets a confident answer.
What to do this week
- Work out your cost per booked hour from last month's figures.
- Cost your ten most-booked services and mark the ones under margin.
- Draft the new prices and the four-week notice message.
- List every place a price appears, including the services your phone line quotes from.
- Read how to write a service menu that sells before you reprint the menu.