RAISING PRICES

Janet McCormick, MS, NCA

When a group in our industry discusses raising prices, their negativity shows up quickly. They don’t know when to do it. They don’t have a “strategy.” They are fearful they will lose clients to a crippling degree. And many just stay where they are out of fear!

So, when do you raise prices?

At 70-75% book, you are successful (if you are charging the right prices) and can raise your prices with little repercussion. Surprisingly, at 70-75% book, you have some built-in loyalty in your clients that will counter the negatives when they see a higher service price. At 70-75% book, most of your clientele has purchased services from you or others in the salon at least 3-4 times and can be labeled a “regular,” a client expected to come back. Even if you raise your prices (reasonably).

At 80% book, always raise your prices. A salon will stay at 70-75% for a while, due to booking tactics of our industry, but then, suddenly the book will be at 80%. You have a stable book and can raise your prices a reasonable amount with very few comments. But horrors, the abominable wait list is growing fast.

At 80%, you MUST raise your prices to alleviate those clients who complain about pricing and allow those who are eager to get in to replace them. (Over the years, I found 1-2% left – and that was great! They were the ones I wanted gone!) It won’t alleviate your wait list, but will make it more manageable.

When you get to 85-90%, you have a wait list, and you are losing clients. They find someone else because they cannot get in, even if they love you!  You MUST raise your prices to open spaces and hire an assistant or another technician. If not, you are soon going to have problem and complaining clients, and you will hate to get up in the morning!

At 90%, burn out is on the horizon and setting in unless you have an assistant to relieve the pressure or a new added technician to grow. Raise your prices enough to pay for the assistant – plus you can do more clients. “30% growth with an assistant shows quickly, with this scenario,” says Denise Baich, MNT, The PedicurePlus. Town and Country, MO, “with more to follow, and it is wonderful to see the wait list shrink dramatically.” Pay for the assistant with a reasonable raise, plus added profit. OR, raise your prices and cut back to four days to prevent burn out. OR, raise your prices and go on a four-day vacation or staycation monthly. Really. These are all great tactics that do NOT cut into your profitability.

To find percent of book, divide your booked time (hours) by the total time (hours) you are available for booking in a time period (month? 3 months? 6? Your choice) and it comes out a percentage. That is your time booked. (If you have a salon computer system, that is the report called “production.”) It can be done for individual professionals, or the entire salon.

This is heady stuff, but once you get a handle on it, it is easy and routine. Know that this is a wise piece of information to seek out often; it will show you many things about your business.

Excerpt from “Becoming a Six Figure Nail Technician,” a voiced program by Janet McCormick, to be published on NCA, Summer, 2023.