Using a Rise in Treatment Prices to Generate More Revenue
Now I shouldn’t have to remind you that your treatment prices need to increase once a year. Everything else in your business does; the cost of the products you sell and in your treatments, your electricity, phone and other utilities most likely do. Marketing does, the cost of laundering your towels, maybe your rent. MOST importantly, the cost of your people does. If there’s one thing you can rely on, is an annual increase in wages.
So, if the cost of your expenses increases every year but the price of your treatments (revenue) doesn’t, that will mean less profit. Less money for you to take home and less money for you to reinvest into the business. And if this happens year after year….well, you pretty much end up working for nothing.
Here’s something else to think about, not only is there less profit but the money you DO take home for yourself is worth less because everything in your personal life like food, clothing, breathing, has gone up!
So increase your prices. ONCE A YEAR.
When you do it, doesn’t really matter that much, although I would steer away from the Christmas holidays. Undoubtedly, your skincare range supplier has an annual price increase. If you don’t know when it’s coming, then contact them to find out and increase your treatment prices along with your retail prices so it doesn’t come at your clients more than once a year.
Let’s now move on to using this as a strategy to increase your revenue.
When it’s time to increase your pricing, as a courtesy to your clients, you should give them notice of the impending price increase. How much notice? Well enough to give your loyal and regular clients the opportunity to visit the salon at the old prices for at least one more time.
So what’s your average cycle of loyal clients? I hope you’re saying every four to six weeks. THAT’S the amount of notice you should plan on giving them. I’d go for 6 weeks.
Use this time frame as a scarcity tactic to generate increased revenue by creating a marketing campaign to incentivise existing loyal clients to book and stock up on their homecare BEFORE the prices go up.
And, if you’re wanting some extra cash flow upfront (or if you’re feeling extra generous), then you can allow clients to purchase their treatments in advance at the old prices. Now depending on the POS software you use, the implementation of this can be tricky. One way is to sell in the form of a gift voucher. You just must discount the treatment every time the client has a treatment ie. if the Hydrafacial is normally $150 going up to $160, sell 3 Hydrafacials for $450. Every time the client has a treatment, discount each one by $10.
And then for the entire notice period, promote the heck out of getting in and stocking up before the price increase.
- Sign at the reception counter and instore ie. back of bathroom door and in the waiting room/area
- Window signage
- Regular organic social media (at least weekly before the deadline)
- Regular email marketing to your database
- Above the fold promotion of this on your website ie. the first thing someone sees when they hit your website
- Text marketing
- Paid social media ads
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