How Much Should I Raise My Prices? A Step-by-Step Guide
Raising Your Prices Series: Part 3
Congratulations! If you’ve made it here, it means you’ve overcome your doubts, know your value, and are ready to take the next step in your salon business and raise your prices. Now, you might be asking yourself, just how much should I raise my prices if I’m a nail artist? Hairstylist? Cosmetologist? Esthetician? Barber? The beauty business experts at GlossGenius have you covered with proven tips and formulas to do just this. We’ll lay out everything you’ll need to make the best decision for you and your business.
First of all, we know that when it comes to raising your prices, hairstylists, barbers, nail artists, estheticians, and other beauty professionals worry. But the Number One thing to keep in mind is that you need to own your worth and charge your worth! Your craftsmanship speaks louder than any negative thoughts you may have.
“I think of myself as an artist, not a technician who does roots. If you don’t know what it feels like to create a work of art on canvas, go to a museum and look at the paintings.”
— Celebrity hair colorist Brad Johns (@bradjohns333)
You’re a talented creator of looks, so your prices should reflect that. Read on to find out the steps to make everything match up just right!
Step 1: Evaluate Yourself and Your Business
If you’ve read our article Telltale Signs that It’s Time to Raise Your Prices, you know that your education, experience, and productivity deserve a raise. Now, you’re ready to decide how much to raise your prices. Here are some questions you should be asking yourself:
Have you been getting burnt out? You want to strike a balance where you know that you’re charging an amount that will make you want to go above and beyond while demonstrating that that effort is worth the money.
How will a price increase change how you work? Will you be paying more attention to your clients?
Have you raised your prices before? If you have, how much did you increase your rates by and what happened? How can you learn from that experience?
Do you want to raise by a larger margin so as to reach a higher tier or is this just a normal adjustment? Regardless of which one, remember that price increases can be consecutive. Even if you want to reach higher income clients and have the skills to do so, take it one increase at a time rather than a huge bump all at once.
Is your client base and location able to handle an increase? Can the majority of your clients or potential ones in your area actually pay more?
Now that you have a better sense of yourself and your business, it’s time to pick the numbers!
Step 2: Resonate Rather Than Compare
You probably have a general idea of what your competitors are charging. That’s good to know, but don’t compare yourself! You’re your own beauty professional, so you need your prices to resonate with what you have to offer. Think about it this way: If the nail artist across the street has no talent and low reviews, then why should your A+ work be worth the same amount? People care about quality and weigh cost into what they’re receiving.
That being said, here are two solid ways to raise your prices in your salon or booth:
Increase across the board by 10 percent. Beauty business expert Lauren Gartland (@inspiringchampions) echoes this option in Salon Today. She states, “Do not drastically raise your prices at one time. Start with a 10 percent adjustment. This will instantly increase your profits, but it won't affect your clients' service tickets too severely.”
Increase by specific dollar amounts. For example, if you’re a barber and your current price is $18 for a standard haircut, do you feel like it should be worth $3 more now than 2 years ago? That’s an increase of over 16%, but more importantly, do you think your combination of education, experience, and productivity now is worth $3 more per service than it did then? Vary prices accordingly since trims, for instance, may not merit a similar boost.
Choose the method that best suits you!
Step 3: Reward “Regulars”
We know how much your client base matters to you, and how much you matter to them! Because of this, make loyal clients feel special by giving them a discount when the new prices take effect.
How does this work?
Reward repeat clients by charging them the “old” price until 2-3 months after you started charging new clients the “new” price. After those 2-3 months, everyone will pay the same amount for your services.
Kim Bennett Horvath (@kimikisses), a Senior National Educator for Paul Mitchell Pro, uses a slightly different two-tiered pricing system that lets regulars (or “advanced clients” as she calls them) keep the “old” price longer. Despite the difference, the result is the same:
“With this structure, the clients who have been with me the longest always feel like they are getting the best rate in exchange for their loyalty. And my new clients love to know that at the next price increase, they will get grandfathered in with the advanced customers. All of my clients are happy with this system and are aware when the next price increase will happen.”
— Kim Bennett Horvath, Paul Mitchell Pro Educator
Step 4: Time It Well
There’s no avoiding it. You’re going to lose clients (and probably about 10 percent of them). BUT as Gartland says, "You need to lose them! Even though you are losing clients, you will be earning more while working less. You also want to replace those clients with your ideal clients, those with the higher service tickets." However, you don’t want to lose more clients than you need to by picking a bad time to announce your increase.
How do you avoid dropping regulars that would otherwise stay? Pick a time of the year when they can’t leave! Rather than increasing your prices right after the winter holiday season, for example, do it beforehand. Clients aren’t going to want to find new beauty professionals during a time when they’re already spending more money than usual and have to look their best for family and friends.
This could mean that if you’ve hit that 85% mark that we talked about in our article Telltale Signs that It’s Time to Raise Your Prices, you might have to wait a month or two until a holiday or graduation season comes around, but it may be worth it, especially if you want to start doing consistent increases every 12 to 18 months. In the end, the choice is up to you, so if you’re really super busy right now, then raising your rates right now rather than later could also be the right decision. Your judgement matters!
Now that you know how much to raise your prices, you have to decide when and how to make your announcement (with a letter template included)! Find out from GlossGenius more insider tips by reading our next article in this series, How to Announce Your Price Increase --> Free Letter Template Included!