Telltale Signs that It’s Time to Raise Your Prices
raising your prices series: part 2
We’ve all felt it in some way before. Business coach Jenny Shih calls it a “hunch,” and it’s the first sign that it’s time to “raise rates,” “increase prices,” “charge more,” or whatever you’d like to call it. Let’s break it down.
Does it seem like it’s been a long time since you gave yourself a raise and that you deserve more?
Does your income not go as far as it used to since everything is more expensive except your services?
Are clients consistently offering you large tips?
Are you burnt out and at a point where you’re resentful of having to spend so much time and talent with clients that aren’t paying enough in return?
Hopefully not this last one! But if you read any of these questions and thought “yes, that’s me,” then it’s absolutely time to raise your prices in your salon, studio, or booth! You want to be competitive, and sometimes a higher price can actually signal that when it matches your talents.
Now that you’ve felt that hunch, lets identify some specific categories to think about. In Beauty Launchpad, Anna Peters (@annashairretreat), owner of re:TREAT hair studio and a Sam Villa Artist, identifies three main categories of telltale signs that it’s time for a booth renter, studio owner, or salon owner to raise your prices.
“For booth rental stylists, raising prices can be a very hard and unclear task, yet it’s an essential step to succeed. It’s usually driven by education, experience and demand.” — Anna Peters (@annashairretreat)
So what do each of these categories actually mean? Our team of beauty business experts at GlossGenius has worked with successful hair stylists, nail artists, hair removal specialists, lash artists, estheticians, and barbers to get to the bottom of them. Anna Peter’s advice, however, is not just for booth renters. It’s also for salon owners, stylists who do house calls, and all kinds of beauty professionals with an entrepreneurial spirit.
You are committed to your profession. You’re always seeking for ways to improve! This could mean that you take classes from educators on specific techniques, such as balayage, layering, and creating new textures. That could mean that you’re learning on your own and providing new services, like using a SNS dipping powder method for nail art. This could mean that you pay a lot of attention to your clients and what suits each one and makes their experience special, so they’ve left you tons of amazing, 5-star reviews.
Regardless of how you’re improving yourself and your business, you’re providing higher quality services over time. Haircuts and hair coloring, acrylic or gel nail art, beard trims, and facials are all the better for it. If you see your education as an “investment,” then you should yield “returns” just like your customers have!
Here are questions to help you decide if your education deserves an increased payout. If you answer “yes” or with a list of accomplishments to any of these, then get ready to change some numbers:
How many classes have you taken since your current price went into effect?
Do you possess new certifications?
Have you been offering new services?
Have you started using pricier products to improve outcomes?
Do you own new equipment that lets you do more for your clients?
What are some things that you know you’re better at?
Have you received attention by word of mouth or social media because of your talents?
Are you in a niche? If you’re unique, then take advantage of your skills by charging more! For example, if you’re an expert at natural hair, then capitalize on it.
As Mike Sharkey , the Director of Global Education at Revlon, sees it in Beauty Launchpad, the importance of ongoing education is that “it stimulates imagination. You can’t put a price on creative energy.” BUT you can put a price on services, and the better they are, the more expensive they should be. You should never undervalue yourself.
“Whenever it’s time to raise my prices, it is usually because I have invested in education and/or added equipment in the salon. For example, my hair steaming equipment is top of the line and provides great benefit to the client's hair.”
— Face of Sola Brandie Kekoa (@brandiekekoa)
Technology improvements mean that you’re even spending money so that your clients will get the best salon experience possible! You should be compensated for your commitment.
How long have you been in the industry? The longer you’ve been in the industry, the more clients you’ve made look their best. More years in the industry entails that you’ve helped hundreds or thousands more clients look their best. Experience adds up, and you should be compensated more when you’ve put in the extra hours, and eventually, years.
What about reputation and respect? You don’t have to have been behind the chair for twenty years to have thousands of followers on instagram, won competition awards, and earned the respect of your clients and community. Popularity and praise indicate that you’re experienced not just in terms of numbers, but also in how you interact with people and demonstrate your skills. In an industry that relies on social skills, you’re a star!
“Are you a traveling educator? Do you do New York Fashion Week? Have you won awards for your work? Are you featured in the local press a lot? Do you do local celebrities or reporters? All of these things plus your level of education justify charging more for your services. For beauty professionals just starting out, you’ll be the cheapest person in the salon, so offer discounts for no longer than a year until you get busy or close to it. I’d almost rather do clients for free and get the tips instead of charging the wrong amount, which sets a bad precedent. You want to choose a price point that will attract the kinds of clients you want to have in the long run. These are clients who aren’t looking for a bargain, and if you do a good job, you’ll earn their loyalty.”
— Hairstylist and Founder of the Beauty Underground Charlie Price (@charliepricehair)
As a business owner, you’ve definitely these words before: “supply and demand.” There’s only one of you, and so many people who want your services. If you have a waiting list, then the time for a price increase has come. However, a waiting list is not the only way to tell that business is booming. Lauren Gartland (@inspiringchampions), beauty business coach and founder of Inspiring Champions, uses these three simple terms to evaluate productivity:
Potential Hours of Productivity (PHP) = How many hours could you be booked every week? Example: PHP is 40 hours if you work 9am-6pm everyday with a 1 hour lunch break.
Real Hours of Productivity (RHP) = How many did you actually work in a week? Example: You were booked for 30 hours this past week.
Average of Time Working = Divide PHP by RHP. Example: 30 hours (RHP) divided by 40 hours (PHP) equals 75%.
"Keep track of your numbers consistently over a period of two months. If your average is 85 percent or higher, then it is time to raise your prices, as your demand has exceeded your supply. If you again reach an 85 percent booking rate in two to three months, then raise prices again. You can raise them a few times a year if your client demand continues to exceed your supply."
— Lauren Gartland in Salon Today
Remember, though, that you don’t have to raise prices if you feel like it’s too soon. You don’t want a client to feel like the same service they purchased last time gets more expensive with every visit. You’re the best judge of your clients, so tailor this advice to the clients you serve and who love you for it.
4. Other Signs that it’s Time To Raise Your Prices
What are some other factors to take into consideration?
The cost of life increases yearly due to inflation! If it’s been 12-18 months, and you haven’t given any thought to raising your prices, then it’s a good idea to consider doing so. You don’t want to struggle financially if you have the choice to make more money.
Are you reaching your goals? If you’re not as productive as you should be, then what can you do to improve? Are you in a good location? Are you using GlossGenius to effectively manage your business, save money, and take advantage of social media, SMS, and email marketing? Are you trying to maximize value for every client? Are you happy with your line of work?
Location matters! If you’re in a more chic, expensive neighborhood with clients who care about quality more than cost, then you have more freedom to give top results for top dollar.
As you can see, there are many signs that it’s time for you to raise your prices. NOW let’s take the plunge and figure out exactly how much you’re going to increase your salon’s prices in our next article “How Much Should I Raise My Prices? A Step-by-Step Guide.”
“As your business develops, your services should be worth more. Briefly explain how the higher price is going to allow you to better serve your clients. Then move on. If you've proven your worth, then they won't walk away.” — Reputation Capital Media founder Mary Ellen Slayter