How to Raise Prices in Hair Salon in 2022

With costs rising, you may wonder how to raise prices in hair salon menus without losing clients.

It’s normal to increase prices for services and you don’t need to be uncomfortable- we’ve got some strategies to help you do this with confidence.

What You Will Learn

We’ll look at raising prices and when it’s appropriate as well as how to do it. Plus, we’ll go over how to communicate price increases to your clients and employees.

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  1. Review Your Salon Business Performance
  2. How to Raise Prices in Hair Salon?
  3. Conclusion

Review Your Salon Business Performance

 

First, it’s important to review the data and recognize why you need to increase prices. This will help you to decide on the right strategy (including whether to increase some service prices or all of them) and give you the tools to deliver this information to your clientele.

Some common reasons for higher prices include:

  • Being Constantly Overbooked- If your services are always booked weeks ahead, you can often demand more money for them without losing customers. This can often be the best time to do this.

  • Offering Something Unique - If you specialize in something (like weaves or scalp treatments) that’s not available elsewhere in your area, you can usually afford to demand a little bit more for this service. Check the prices of services at your competitors first, though.

  • Improved Services/ Equipment - Have your stylists received new training or learn more about how to perform existing services? Did you upgrade to better quality equipment? These can justify raising prices to help cover the cost of growing salons.

  • Margins Have Decreased - Maybe you’re paying more in rent at your current location, or maybe your product supply cost or business hours have gone up. Perhaps inflation in general is driving the price of just about everything up in the industry. Your clientele can expect salon services to go up in price to match this inflation.

  • Staff Satisfaction (and Yours, Too) - A salons’ wages have to be enough to retain its staff, and salon management (and owners) should also be satisfied with what they’re making. Maybe you underestimated your profits in the first place and need to figure it out now. Again, this is valid.

Still unsure? It’s recommended that you start with a smaller increase if possible, such as a 10% adjustment. You can revisit this again in the coming months and if your booking rate is still at or above 85% after three months, you can consider whether your salon prices need to be increased further.

To learn more please check out our post on Salon Pricing.

How to Raise Prices in Hair Salon?

 

So, you may still be wondering how to go about raising your prices and how to announce price increase in salon services to clients. Here are some tips and industry strategies to help you go about it.

First, you’ll need to decide on your strategy. Most salons either raise their prices in increments (like the 10% mentioned above) or by service.

There are advantages to both approaches. Hair cuts can be increased by a few dollars a year (as needed) and chemical treatments by slightly more (more than a $5 increase is probably too much and will upset clients). You can set these amounts by service.

  1. Raising Each Price Periodically: Doing this annually or biannually gives you the chance to check your profit margins and booking rates- you can track the effect of this change and make sure that your profits increase and business is stable. It’s also easy to communicate an inflation-based increase across the board.

  2. Increase the Costs of Specific Services: If you do this (maybe you’ll charge more for hair color but haircuts will cost the same amount), this lets you recoup what you spend on supplies or make money on a unique service. Be aware that you’ll have to explain the change to clients.

  3. Charge New Clients the New Prices: Maintaining the original price as a discount for loyal clients, or rebranding the name and description of the service- this is especially effective if your stylists have received additional training or if you’ve upgraded the quality/ brand of your products.

  4. Rebrand the Name and Description of the Service: This is especially effective if your stylists have received additional training or if you’ve upgraded the quality/ brand of your products. Often, clients will readily pay slightly more for something that’s been upgraded.

    You can show customers that your salon prices reflect the additional value of the services. You can have each stylist provide small, complimentary treatments (such as a scalp massage or a free bang trim) for the first week or two after the price increase to make it a success.

  5. Offer BundlesThis is a great way to raise salon prices and encourage each client to schedule multiple treatments. If you increase the price of each item on your menu, but give clients the option to bundle them together and save, you stand to make everyone happy.

How to Communicate Price Changes

The way that you break the news to your clients is just as important as your strategy for increasing prices. New clients will not be surprised by this, but you definitely don’t want to risk losing any loyal clients when you make your announcement.

Some ways to do this effectively are:

  • Be Confident- Don’t be scared of making this announcement, and be ready to answer any questions that clients have. Inform them in advance of what’s going on and stay firm. After all, you’re doing the right thing to keep your salon successful.

  • Be Clear- Tell clients in advance what to expect, the exact date it will begin and why. If necessary, you can provide a comparison between previous prices and the new ones. Be positive and thank them for their past and continued support.

  • Keep Your Team Well-Informed- They’re your best asset when it comes to client communication. Meet with each stylist and discuss the change in detail (as well as how it can benefit them). Decide on a strategy for speaking to your clientele.

Finally, you’ll want to send out a salon price increase notice. You can inform each customer by letter, email or SNS. You might also put a sign up in your salon’s reception area to explain the price increase.

See our post here for a hair salon price increase template that you can use or customize to fit your needs.

Conclusion

 

It’s normal for a salon’s owner to wonder whether it’s the right time for a price increase and consider the right strategy for going about it. In fact, it’s important that you think carefully about your reasons for making these changes and come up with a plan to implement them.

Deciding how to raise prices in a hair salon is just as crucial as your reasons for doing it in the first place. Above all else, make sure to have a plan ready to explain the changes to your customers and get your team onboard and excited about the change.

Citations

Interest and prices
https://books.google.com/books?hl=en&lr=&id=2__gv

Price theory and business behaviour
https://www.jstor.org/stable/2663449

The right game: Use game theory to shape strategy
http://www.elmayorportaldegerencia.com/Documentos/Est

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