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Raising Salon Prices? Here's How to Do it the Smart Way

Rising prices might be a business reality, but salon owners can manage them effectively by emphasizing value and being upfront with clients

Raising prices is never easy, but it is usually necessary. As the cost of goods increases, business owners must increase some product and service prices to keep pace. But salons still have to introduce changes carefully — carelessly marking up every price tag is irresponsible, jarring to clients, and will drive your most loyal patrons to other self-care businesses.

The good news is salons can raise their prices in reasonable and thoughtful ways that even paying clients will respect. For a start, owners can lean on reporting tools to model strategies, rework their service offerings, and see where they stack up in a competitive market. From there, they can identify a pricing sweet spot for specific products and services before communicating the changes to clients. Let’s take a closer look at how salon owners can navigate this challenging task.

Is there a right time to raise prices?

There’s a right and wrong time to raise prices, but no single factor can answer the question for you. Instead, salon owners must look at the big picture that considers the broader economy, their business size, the overall self-care market, and more. Here are a few questions you should ask yourself periodically:

How long have you kept the same rates?

It’s always a good idea to adjust your prices periodically to reflect growth, inflation, or even changes in your market. Consider reviewing your service menu and products every year — you don’t necessarily have to change prices each year, but it can help you identify trends and craft an appropriate response. For example, minor biannual price adjustments can be more effective than a significant change after five years that feels more drastic.

Are operational costs rising?

The most pressing reason to raise prices is to meet operational costs, such as more expensive products or higher rent. Unfortunately, salon owners can be reluctant to raise prices when this happens for fear of losing clients for what might be a short-term shift. That’s understandable, but what if that shift is a long-term trend lasting for years? Never ignore rising costs out of worry for how clients will react — for your business to survive, you need to address these economic realities before they become problems.

To better understand these warning signs, check out Boulvard’s blog post, “Is the Recession Impacting Your Salon?

What are your competitors charging?

Since you’re probably not the only self-care business in town, it pays to keep an eye on competitor prices, especially if you offer similar services. Compare your offering to those from other salons, but remember that the goal is not to match or undercut the competition. Instead, you want a balance between an attractive rate and a price that reflects what your service is worth. After all, you’ve spent years training your staff to provide the best care possible, and you continue to do so every day — clients who see the continued results of that commitment to quality will understand why prices need to rise commensurately.

How are you managing the current workload?

Sometimes a high volume of clients makes a business look healthy when it’s actually overworked. If a salon team struggles to keep up with high volumes of clients interested in a low-priced service, this can be detrimental in the long run. Even worse, owners will spend far too much time on appointments instead of addressing leadership matters — like creating new services or hiring new staff — that contribute to a more sustainable workplace. Consider this: Even if you double prices and lose half of your clients, you’d still make the same amount you are now. And the most effective price increase doesn’t have to be nearly so drastic.

The difference between product and service prices

When it comes to pricing strategy, there isn’t usually a difference between calculating prices for products or services. This is because both offerings are subject to economic factors like cost, client demand, and even available supply once you factor in available labor. But BDC Senior Business Advisor Alka Sood did note one vital difference. Products have a tangible value that anyone can see, while services have hidden value that might not be obvious to clients.

Always remember that services are just as valuable to your bottom line — if not more valuable — as any product. That means it’s vital to price your offerings based on their actual cost instead of what clients perceive. For example, if a client doesn’t know about their stylist’s expertise, the demands on their time, or the local market value of salon treatments, they might think your competitively-priced service is too expensive. That’s why it never hurts to find ways to make the value behind a service more visible, such as upselling or offering seasonal treatment bundles. In the long term, it’s crucial to prioritize actual costs and service value instead of misconceptions so your business can grow.

Making an informed decision

Once you know price increases are necessary, the next step is determining which products or services need them and by how much. A robust reporting tool is essential for analyzing sales data and leveraging the most important findings. For example, a platform like Boulevard can conduct a cost/benefit analysis of products and services to determine which ones clients like the most — and therefore which could be priced a little higher. And that’s before getting into how Boulevard can identify and resolve scheduling gaps, potentially eliminating the need for a significant price increase.

While reporting software may seem like an unnecessary expense when you have a perfectly good spreadsheet, don’t underestimate its importance. The savings potential of identifying performance bottlenecks or unnecessary costs is well worth the entry price even before considering profit opportunities.

Communicate price increases to clients

So you’ve determined a price increase is necessary and defined which products or services need it most. Now comes the hard part: telling your clients. The good news is that most people will understand if you present the information clearly and transparently.

  • Give advance notice: Clients should never find out about a price increase on the day of their appointment. Use email or SMS communication tools to share your announcement. Give them at least one month before new prices take effect.

  • Be honest and upfront: Don’t try to hide the increase behind vague or gimmicky language. Be clear about what’s changing and what isn’t, such as whether the new prices reflect a unique service offering. You should also be transparent enough to give reasons for this change instead of letting clients assume the worst.

  • Leave opportunities for feedback: Making an announcement in the 21st Century doesn’t have to be a one-way communication. Give clients opportunities to provide feedback about changes, especially if those changes come with new service offerings. An email address, social media account, or phone number are ideal, but remember that you’re also implementing this increase for a reason — don’t apologize for it or backtrack unless a client points out a serious blunder on your part.

  • Highlight your value: When you’re breaking bad news, it’s a good idea to remind clients why they came to you in the first place. Emphasize how these price changes will make it possible to provide high-quality salon services. You might even implement some customer service concessions for loyal patrons. For example, consider honoring the old price for existing appointments as a sign of appreciation.

  • Update your marketing materials: When so much of today’s marketing is automated, you want to be absolutely sure you don’t advertise old prices or services. Update all of your branded messaging, from client emails to web ads. Don’t forget to take down any physical brochures or posters with the previous pricing while you’re at it.

Updating your prices is never easy, but some tools make the job much easier. At Boulevard, we help salons and other appointment-based self-care businesses achieve profitability at scale, whatever the economic circumstances. Whether using our Precision Scheduling technology or customizable data reports, Boulevard can provide all the insights you need to supercharge business performance. Book a demo today for more information.

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