When to Raise Your Treatment Prices

When to Raise Your Treatment Prices

I am writing this in late November and I imagine all of you salon and spa owners are busy planning and preparing for the busy run up to Christmas with special offers, Christmas retail kits and products as well as a promoting your gift vouchers at every opportunity. If not then you really should be!

However, some of you may be also thinking ahead to next year and wondering where to take your business in 2015? This may involve a number of things, but most common as we head towards a new year is the idea of reviewing your treatment prices. After all, you work hard and you value what you do so you want to make sure that you are achieving the very best possible price for the treatments and services you offer.

But . . . how do you if it’s the right time to raise your prices?

Does the above question even matter, can you just raise prices whenever you feel like it? Well I guess that depends on whether or not you plan on keeping the majority of your existing clients. Sure, you can go ahead and simply jack up your prices if you want to, but in todays world of information it is not going to be difficult for your clients to find another salon or therapist locally that is offering a similar treatment for a lower price.

“But I have loyal clients . . .

. . . they won’t go somewhere else!”

Great! It’s fantastic to have loyal clients. If you have been following our articles and putting in to place some of the advice in them, you will have worked on building up your client loyalty. But any loyalty has a breaking point and if you suddenly increase all your prices beyond a certain point then you may just find that loyalty stretched beyond its limits.

Experience has shown me that there are many wrong ways to go about increasing your prices, but only one real way to get it right without the risk of losing customers. The whole process starts with knowing when it is the right time to raise your prices.

Treatment Price Rise Indicators

One way to see if it might be the right time to increase your prices is  by lookinging out for certain indicators as they apply to your business. Some are more subtle than others.

Examples of these indicators are:-

  • Have you raised your prices in the last 12 months?
  • Are you significantly cheaper than the competition in your local area?
  • Are you covering your costs by the same amount as you were last year?
  • Have your client numbers or client referrals increased noticeably?
  • Have you recently had a refurbish or launched a new product line?
  • Have you started to offer a new service?
  • Are your customers telling you to raise your prices?

Yes . . .believe it or not I have heard from a number of salons where their own customers told them that they should really raise their prices. Now that is when you really know it is time to think about a price increase!

But wait . . .

Before you go wildly hiking up your prices, these indicators are only one part of the story. This is one extremely important criteria that you must meet before you can go ahead and raise your prices safely, without any negative effects.

The 80:80 Rule

My 80:80 rule means that in order safely raise your treatment or service prices, without losing customers, you need to make sure that you are at least 80% fully booked for a minimum of 80% of your time.

How to Work This Out?

There are many ways you can work this out, if you have a a management software system this can probably calculate this for you. If you do not have software or you prefer to work this out manually here is a quick and simple way that will do the trick.

Take your last 4 weeks of bookings, whether this is on a computer system or in a paper diary. For each day over that period work out the total number of hours that you and/or your team were available to perform treatments. Take out any admin time, cleaning, meeting, lunch or break time. Make sure you are only working with your available time.

Then for each day work out the number of hours you spent performing treatments or treatment related work such as consultations, patch tests, set up or turnaround time etc.

At this stage for each day that you worked or were open over the last 4 weeks you should have 2 numbers. One is your available hours for each day and the other is hours booked in treatments.

Next, for each day, take the Number of Hours Booked and divide that number by the Number of Available Hours. Then multiply this by 100 to give you a percentage.

If it helps you, the formula for this look like:

Do this for each day over the last 4 weeks, only for the days that you worked or were open for business, although if you are like most salon owners this is likely to be every day!

So now you have a whole bunch of Daily % Utilisation figures, hopefully you have a number of them that are 80% or higher?

Next you need to work out the % of your time you are over 80% fully booked.

To do this you need to take the number of days you are over 80% Fully Booked and divide this by the Total Number of Days you worked. Then multiply this by 100 to get a percentage. This is the % of your time you are over 80% fully booked.

The formula for this would look like:


Let’s say that over the last 4 weeks I was open for business on 24 Days. After the first calculation above I now have 24 Daily Utilisation figures ranging from 64% on some days to 100% on other days. On 20 of those days my Daily % Utilisation figure was 80% or higher.

Using the formula: 20 Days (over 80%) / 24 Days (worked) = 0.83333

0.83333 x 100 = 83.33%

So in this example I am over 80% Fully Booked for 83% of my time . . . . . its time to raise those prices!

Hopefully you have a figure similar to the one in my example above, if your figure is over 80% then you are in a fantastic position where you can look to increase your treatment prices, safely, with a minimum risk of losing any clients in the process.

Working out whether or not now is the right time to raise prices is an essential step when considering whether to adjust your prices, but it is just the start. There are still a number of steps to cover to ensure a smooth price increase and more importantly that your new prices do not result in any negative effects for you, such as fewer clients.

Fortunately I have spent the last few months working on a new guide “How to Raise Your Prices Without Losing Any Customers” that covers not only the “When” to raise prices, but also the “Why” and the “How” in step by step detail. It is the result of many years of experience and a lot of hours of writing, experimentation and testing . . . which is why I have released this as an ebook, checklist and spreadsheet (to help with all the calculations) rather than as an article. It even tells you how much to raise your prices by!

If you would like to know more . . . click on the advert at below to be taken to the information page to learn all about it!



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