The spreadsheet below is an active document that you can edit yourself. If you make a mistake or want to start over just refresh this webpage. NOTE: All cells shaded in red in columns B, C & D are cells that you input with your own information – everything else will automatically calculate for you.
To get started, input the name of your service in column B, as well as the current price that you charge in column c. Under “Avg # Services/Mo” in column D you will input the number of these services you do on average each month. The row below it is to input your anticipated additional # of services you will be doing in the future. If you do not see yourself increase the # of this service in the future just leave it the same as your current monthly # of services.
The differences that are displayed under “Monthly Revenue” & “Yearly Revenue” tell you what kind of additional money you would earn as a result of the price increase you put in. Play around with this handy spreadsheet to see what kind of money you could be making by increasing the price of some of your more popular services. You’ll be surprised at how small increases in just a few of your services will equate to thousands of dollars of additional income at the end of the year.
To download an Excel Spreadsheet with these formulas CLICK HERE.
Be sure to visit our other blog post titled “10 Steps to Raising Prices” that gives you helpful resources and best practices, as well as a sample letter for clients indicating your upcoming price increases.
[iframe src=”https://docs.zoho.com/sheet/published.do?rid=34tnz7978fad0fcfd446fbdefb1cdeda674e8″ width=”100%” height=”1000″]
While the need to raise prices is usually good news for your growing salon, it’s not always music to your client’s ears, especially for those clients who have been with you for years (maybe even from the beginning of your career as a salon professional). We interviewed several industry professionals to see what best practices they’ve employed when raising prices successfully and compiled these top 10 steps. We also have a template letter you can display or mail to your clients to help get you started.
1. Be Honest. Don’t try to hide it. Explain to your clients upfront that you’re raising your prices. Be sure to tell them that you’re moving with the industry and increasing your level of expertise, which has improved dramatically since they first started coming to you. You should still try to offer some form of bulk discount so they can save more by purchasing several gift certificates at a discount. This not only gives them a discount up front, it also generates cash for you up front.
2. Thank Your Clients. The first thing you should do when you increase prices is to say thank you to clients. You should sincerely express your appreciation for the risk they took on you when they first came to you, and then be transparent with them about why you need to raise prices. Make sure they understand why you’re asking for more money and why your product(s) and services are worth more now than when they started coming to you. It doesn’t always work, but most clients tend to be understanding.
3. Explain Your Costs. Sometimes you just need to raise your prices. How many years has it been since your last price increase? Explain to your clients why you are raising your prices and how you are using the additional funds they will be paying each visit. If your own expenses are going up, then explain to your clients why that is happening. If you are spending more money on your products and services, then explain to your clients how the additional features will benefit them.
4. Add Features. When you add a value feature to your services, it gives you a reason to increase your prices with your clients. Early clients will understand that they joined you at the beginning stages of your career and that with your improvement and growing skill set, your prices may change.
5. Give a Lower-Priced Option. Let clients focus on value by giving them a second, lesser-priced option to their service. Then there’s a decision to be made, which focuses on the value that your service sets rather than the price increase. This is especially helpful if the lower plan is a little less expensive than what the client currently pays. For example, if you typically do a 5-minute scalp massage with every shampoo, you could offer it without the massage for a few dollars less than your current price.
6. Over-Deliver. First, be sure you can demonstrate that the value you provide is increasing more than the price. This way, clients know that they’re still getting a good deal. As a rule of thumb, over-deliver and really impress your clients for at least 100 days before communicating a price increase. Simple ways to do this would be to add new features to your studio: new furniture, mood lighting, soft drinks, snacks, wine, etc.
7. Add More Value. It’s important to add more value to sweeten the deal. Your services should always be improving, but it’s simply counterintuitive for somebody to pay more for the same thing they got for less before. Justify the price increase by adding features or providing some other type of added value. Some ways to add value include can include eyebrow waxing, eyelash tinting, scalp massages, shoulder massages, makeup touchup, etc.
8. Explain, But Don’t Apologize. As your salon grows, your products and services should be worth more. Briefly explain how the higher price is going to allow you to better serve them. Then move on. If you’ve proven your worth, then they won’t walk away.
9. Inform Your Customers Ahead of Time. Give clients a heads up about price increases at least a few appointments prior to it taking effect. Make sure your price increase notice is posted on your mirror around 2-3 months before the change takes place. There is nothing worse than a surprise price increase!
10. Send a Letter. To help communicate your price increases it may be useful to send a formal letter to your clients as a personal communication regarding the change. The letter should be carefully written so they understand what is changing as well as what they will get out of it. You could even hand them the letter as they are leaving your salon and explain to them that you have something for them regarding upcoming price changes and how it will affect them. And remember, smile and be positive when communicating price increases.
Even if you don’t need to increase prices, Norm Brodsky’s classic piece, “The Case for Higher Prices,” presents plenty of reasons to do so, such as maintaining your brand image. “By not raising prices on a regular basis,” he asserts, “…You’re gradually undermining the perceived value of your products and services. Like it or not, there’s a natural tendency to link quality and price. We’re not saying you always have to charge as much as the most expensive stylists out there, but if the gap between your prices and theirs gets too large, customers will start to regard you as the cheap alternative in the market.
BELOW IS A SAMPLE LETTER REGARDING A PRICE INCREASE:
To my wonderful clients:
I would like to take a moment to thank you for your loyalty to me as your hair stylist, beauty consultant, and friend. Some of you have been with me since the beginning of my career in this industry, but regardless of how long we’ve know each other we have all made lasting memories together at my salon.
As always, I am committed to constantly improving my skills and abilities as your hair stylist to ensure you are getting the best service, the best style, and the greatest experience possible at every appointment with me. And on top of that, I promise to always make you look beautiful J
In every industry prices rise year after year, and I do my best to operate my salon as efficiently as possible without compromising your experience with me. In addition, my skills as a hair stylist are being constantly improved with ongoing education to keep me at the top of my game so you get the very best service possible. As a result, some of my prices will be going up starting January 1, 2014. The following services will slightly increase as follows:
- Women’s Cuts : 40+
- Men’s Cuts: 27
- All Over Color: 115+
- Partial Weave: 75
- Color Correction: 125+
- All other services will remain the same price as before
To show my appreciation for your loyalty I am allowing my existing clients to purchase gift certificates 10% off until January 1, 2014. This will allow you to lock in an even lower rate on my services than you pay now if you choose to do so. To purchase these gift certificates, please call or text me at 801-555-5555 and I will be happy to help you.
Owner, Studio 101 @ Image Studios
To download a Word Doc of this letter template, click here.
Do you have clients who have been coming to you for years, and then have other clients who come for a couple of appointments, only to never be seen again? Most of us shrug it off as no big deal, but when you realize the value of a lifetime client (the actual $$$ that client brings to you over their lifetime with you), it may make sense to reach out to past clients you haven’t seen in a while to try and get them back in.
To calculate the value of a lifetime client you would do the following:
- Estimate how many times one client visits you per year on average (EX: 5 times per year)
- Estimate what your average ticket is (EX: $75.00)
- Estimate how long you typically retain clients (EX: 4 years)
So if a client with an average ticket of $75 visits you 5 times a year, then that single client brings in about $375. If you typically retain clients for an average of 4 years, multiply $375 per year X 4 years and you get $1,500. This would be your typical lifetime value of one client. ONE. It’s a little scary to think what you lose when a client stops coming!
With that said, what discounts or special offers would you do to gain just one more retained client? What could you do to contact them to get them back in? Do you know when their birthday is? How about their anniversary? If you have no client info records, that is a whole other topic, and will be addressed in an upcoming blog.
Reactivating old clients and getting them back into your schedule is also the cheapest way to build your business quickly and effectively. They already know who you are, they’ve been to you before, all you need to do is figure out how you can get them back in your chair!
Think of it this way – they are sitting in someone else’s chair. Why? If they are going to sit in any chair, it needs to be yours! Start today with an action plan on how you can make this happen. Your wallet will thank you!
Are you looking for some marketing ideas this holiday season? Take advantage of the busiest time of the year and generate more sales and revenue to help make up for the painfully slow months after the holidays are over.
Use this day as a springboard to sell gift certificates at a discount or offer a discount to any current clients who book a future appointment in January/February. An incentive now will help motivate people to book that next appointment after the holidays which means you can be confident your schedule will stay booked solid, even after Christmas.
This relatively new holiday has become more and more popular each year that drives people to find deals online. If you have a website or webpage (which everyone at Image Studios has already, contact us if you don’t know where to find it) you can post a deal online that offers clients a discount on product, a % off any gift certificate, BOGO offers, etc. You can have them call you to complete the purchase or you can use an easy-to-use online web form (100% free) called www.wufoo.com to create a form they fill out that will take them to a checkout page to purchase everything online. This takes about 10 minutes to do and all you need is a paypal account to accept payment. Don’t have a paypal account? It’s easy and takes 5 minutes to do, go here to sign up now.
CONTACT ME DIRECT if you want help setting up the Wufoo form and payment page. I would be more than happy to help you do this and you will find it an invaluable tool you can use for future offers down the road. Also, if you want to update your info on your webpage within the salon directory let us know immediately so we can update that for you in time for the holidays.
Christmas Gift Certificates:
This can be one of your most successful ways to sell gift certificates this holiday season. We have pre-printed blank gift certificates (Image Bucks) you can purchase here, or you can use your own. The purpose of this is to sell as many gift certificates during the holidays to your clients. Here is how it works:
- You mail four (4) gift certificates to your client (or hand to them in person), each in its own envelope.
- Three (3) of the gift certificates are blank except for the dollar value that you choose (typically $25 or $50 value), the fourth certificate is made out to your client for the samedollar value as the other three certificates.
- Enclosed with the gift certificates is a letter from you with something like this:
The holiday season is coming up quick and I want to help make your gift giving a little easier this year. Enclosed are three gift certificates for $25 each(or $50, whatever you choose). These are for you to give as gifts to friends and family and can be used for (product, service, etc) at my salon. To show my appreciation for you I am giving you the fourth gift certificate (the one you made out in their name) to you free of charge. To purchase these certificates call me at (XXX) XXX-XXXX and I can complete the purchase over the phone. All gift certificates must be pre-purchased for the offer to be valid. HAPPY HOLIDAYS!
You will need to keep track of who calls and pays for their certificates to ensure none get used that were not paid for (since you are sending them blank ones with no names on them). Also, it is important that you make purchasing these gift certificates as easy and seamless as possible. You can take a credit card over the phone using Square or you can create an online form for them to go to where they can complete their purchase online through Paypal. Again, please feel free to contact me if you would like help doing this, it only takes a few minutes and once I walk you through the first one you will be set to do them on your own after that.
The idea of the gift certificate offer is to facilitate the hassle of buying gifts for so many people by putting them right in front of your clients. To show your appreciation for them you offer them a gift certificate of the same value at no charge for them to use. If you do the math you are giving 25% off all four certificates, or three at full price and one for free, whatever way you choose to look at it. Keep in mind that the three gift certificates they purchase to give to friends and family most likely will be new clients who have never been to your salon before. The value of a lifetime client is worth thousands and thousands of dollars, so never underestimate the cost or discount it takes to acquire just one new client. It pays for itself ten-fold.
In addition, these gift certificates will be given at or around Christmas time which means these recipients will be wanting to use them come January or February, typically the slowest time of the year for salon owners. This will help keep your books full after the holiday season. Best of all the gift certificates are pre-paid up front, so you get the money at the time of sale and can set this aside for the new year.
I highly recommend you take advantage of the holiday season to help generate more income for your salon!
By Peggy Aagard, Hair Stylist Extraordinaire at Studio 101 Image Studios SLC.
In a market where hairdressers are a dime a dozen, (and let’s be honest they are pretty good too) why is it that we have stuttered collectively as an industry here in the Salt Lake area, and for the most part, not charging what we are worth?
There are some really simple things that we can do as individuals to create and increase our value as stylists and professionals collectively in our market.
There is a small percentage of stylists that are living the life that we all want. And you know what life that is; working less, full books, more vacations, financial freedom, and perfectly behaved children. The perfectly behaved children part is an entirely different blog, but I can share with you some tips and ideas to help you think about the overall guest experience, and how everything we do impacts our value.
Startling fact alert!
85% of the weight our guest puts on their visit with us is about the overall experience and shockingly only about 15% is about the service we perform. Seriously. I know, I had to take a moment after discovering that myself. So what are they evaluating us on? In a word, EVERYTHING. Want to charge 100.00 for a haircut? Then you must consider every detail of the following list.
Remember, the devils in the details and our guests are seeing it all.
Peggy’s Pay attention to details (and make what you deserve) list
- Our appearance
- Continuing education
- Greeting upon entrance
- Conversation topics during service
- Reading materials
- Beverages offered
- Music playing
- Energy and flow of your space
- Quality of service (15% guys)
- Did I mention cleanliness?
Our guests are making a lot of these evaluations instantly and often subconsciously within moments of being in our presence . The great news is if you work at Image Studios you are already in control of everything I’ve listed above and can start increasing your value and Working toward that life we all want! If you aren’t already a part of the Image Studios team, there is still great news for you. We still have studios or chairs available at some of our locations!
Seriously. We do, and you should really consider joining the family. We’d love to see you.
I am always hearing a lot about where to spend your marketing time and money in the salon. Well, the best marketing tool you have is already sitting in your chair – your guest.
Word-of-mouth is still the best way to get new clients, and making sure to keep your existing ones is the best way to spend your time, energy, and even money. The service experience must be the most important thing you act on every day.
The average haircut is probably around 45 minutes, so here is what I recommend you do with that time:
Any new experience must start with a positive, emotional connection. When we enter any new business, we are doing a split-second assessment of whether it’s a place we’re going to be welcome, comfortable, safe, and happy when we leave.
Making sure to greet every client with a hello or even a smile, even if they are there to see someone else, is essential. Make sure to greet your own client as soon as possible and inform them when you are going to be ready for them.
Make sure to use their name as often as you can – it makes them feel good and makes it easier for you remember it later.
The consultation is where you’re going to lay down the plan for the service. It’s the key to success.
First, speaking to them face-to-face, and not through the mirror, is important.
Ask open-ended questions about hair history, maintenance, and desired result.
USE PICTURES! Research shows that the most effective advertising contains pictures of people. PEOPLE magazine is the most successful magazine ever launched because it’s called PEOPLE and it contains pictures of people and stories of people inside. Save yourself a lot of time and heartache by using GOOGLE to find a picture that best represents the desired end result.
Everyone’s favorite part of his or her hair experience is the shampoo. Make sure it’s a good one. If you charge $50 for a haircut, make sure it’s a $50 shampoo experience.
Learn to read body language. Does she want to talk? Does she want to read her magazine? The worst thing you can do is have a conversation with everyone around you except her.
As you are finishing the hair, teach her how to do it at home. Explain how the products work. I will even hand the product to the client and teach them how to do at least one section of their hair on their own.
This is where we really make sure they come back to us.
At the end of the service, thank them, hug them, shake their hand, whatever feels natural to you.
Recommend the products necessary to recreate the look at home. With the right products, they will love their hair even more and remember you the next time they need an appointment.
Lastly, book them for next time. Close the sale by setting up another appointment. I never ask, I simply say, “Let’s get you booked for your next appointment.” Easy-peasy.
If you’re looking for new clients, let them know you need their help in building your clientele. People want to be part of your success – gives them something to brag about. Make sure they talk about you when they’re gone. Make sure they love you and you won’t need to spend a dime on advertising.