How to Inform Your Clients of a Price Increase
In a world of ever-increasing prices, wage demands and reducing margins we all need to increase our prices from time to time. Here, we look at some ways to increase prices without alienating clients.
Any price increase needs to be thoroughly thought through before it's put into place. When considering a price increase you should consider, amongst others, the following questions:
- What is the business goal for this increase? Is it to maintain your margin in light of supplier price rises, cover an increase in rent or to increase your own profitability?
- When did you last increase prices?
- How much do you need to increase prices by to meet your business goal?
- Are you comfortable with this increase or do you think you need to increase by more or less?
- What about your clients? No client is going to say they are happy about a price rise, but most will understand. If you think you'll lose some clients as a result of the increase will the extra income you generate cover losing them?
Once you've decided how much you are going to increase prices by the next step is deciding when you're going to put this in place. Price increases are often put into place at the start of the calendar or financial year (often April).
The next step is to communicate the increase and reasons behind it to your staff.
After all they are the ones who are face to face with the client and have to have 100% confidence in the reasons why this is happening.
Once you've done this it's time to tell the news to your clients. A price increase letter or statement outlines a change in the price of your services and the reasons for the change. Explaining to your clients about your price increase allows you to present your reasons for increasing your prices in a concise and persuasive manner.
Here are five examples of price increase statements which you can tailor to suit your salon and use as you wish:
1. At (salon name) we always want to keep our customers informed and up-to-date on every aspect of our business as soon as possible. Your business is extremely important to us and we feel that we need to share in advance with you our intention to increase our prices by (x) percent as of (date).
We hope that informing you of this up-and-coming change we will be able to ensure that our impact to you will be minimised.
2. To ensure that we can continue to provide the same level of excellent hairdressing and support to you, regretfully we will have to increase our prices on our hair and beauty services by (x) percent. This price increase will be taking place from the (date). (Salon owner/manager’s name) would be delighted to discuss this with you should you have any concerns.
3. Due to considerable increases in the price of professional hairdressing products and colour we have no option but to pass a small percentage of this increase on. As of the (date) our prices will be increasing by (x) percent. (Salon owner/manager’s name) would be delighted to discuss this with you should you have any concerns.
4. At (salon name) we pride ourselves on providing products and services to you, our valued clients, that are not designed to simply be cheap, but are high quality, professional treatments. In order to continue to do this we’ve had to increase our prices by (x) percent effective as of (date). Should you have any questions or queries please do not hesitate to contact us.
5. At (salon name) our clients always come first, and as our loved customers we strive to show you loyalty and honesty in every aspect of our business. As such we’re informing you in advance of an up-and-coming price increase to our hair and beauty services.
We’d like you to let us know if there is anything, we can do to assist you with increasing our service level to you to help compensate, or if you have any feedback that you’d like to pass on to us – we’re always here listening.
As with any change you, as the owner, needs to be on hand to support your staff and discuss with your clients the reason why this is absolutely necessary.
For further advice please give us a call or to download this as a fact sheet, please click here.