Business, June 2021

Pricing Strategy

June 1, 2021 | by MaryJo Reeves

How to raise prices for your spa business without losing clients

There comes a time with any successful business when the unavoidable must occur: raising prices on services. This may seem like a formidable task, but it doesn’t need to be. Raising prices can boost the perceived quality of the service.

When increasing prices, the biggest concern may be losing clients. However, the clients who shirk at paying more don’t usually see the value of the service or the practitioner’s worth.

Client attrition is a part of any business and is inevitable with or without price increases. The price increase is ultimately up to each business owner, but the general rule is between 7% and 10%. Some owners raise prices on their most popular services and leave the less popular services alone.

“There are many variables to consider when running a business, and price increases are a fact of life.”

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Think of the Pareto Principle of 80/20. Eighty percent of your business may come from twenty percent of your services. Only 20 percent of your business may come from 80 percent of your services. Focus on those treatments that increase your revenue.

Some practitioners choose to raise prices in January, as people view it as a new beginning. However, any time of the year is appropriate to implement a price increase.

The more important topic is how much notice you give your clients. Typically, six to eight weeks is plenty of time. There is no need to make a big deal out of raising prices. A simple framed note at the front desk may be enough to let your clients know about increased prices.

Some practitioners also let their current customers know about an impending price increase. They can choose to pre-purchase services at the current pricing before the increase goes into effect. This is a very nice way to increase client loyalty.

It’s essential to be confident about raising prices. Know your worth and what you offer. Your clients value your business primarily because of the non-tangibles you offer. Your establishment’s atmosphere, getting to relax and take a break from daily rigors of life, the feeling of being pampered and special are reasons why your customers will not balk at paying a bit more.

There are many variables to consider when running a business, and price increases are a fact of life. A business owner must pay for products, tools, materials, sometimes employee wages, electricity, insurance, among other things.

All of these things cost money, and pricing incrementally increases through the years. The business owner must keep up with this reality and raise their prices accordingly.

Be honest, not apologetic, with your clients about the price increase.

Aside from losing some clients, who probably were not a great fit for your business, the upside is the perceived value of what you offer goes up and will attract new clients. Increasing rates can increase appeal.

Clients who would happily pay higher rates already recognize the value offered. Realize your worth and charge accordingly. Think of all the education, experience, time, and energy you put into your craft.

Raising prices is a part of business and a pivotal component to a growing, flourishing enterprise.

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