Why, When, and How You Should Raise Your Prices

Hey, friend. Welcome back to the Modern Hairstylist podcast. So I wanna tell you about the story that made me want to record this episode that you're listening to right now. So about a year ago, I was in my first, uh, suite building, uh, f- where I first opened up my first salon suite.

And I remember walking past a suite maybe, or I- I don't know. Maybe I was, like, getting a, a drink of water, or I don't know what I was doing. But I w- I was close to a fellow suite mate of mine. Um, I was close to their suite, and I was accidentally eavesdropping on the conversation.

So if you're listening to this, sorry friend. I love you. You're amazing, okay? Um, but I was accidentally eavesdropping, and I was hearing that stylist talk about having a price increase.

And I was like, "Yes, like, have that price increase, boo. Like, pop off. Like, do what you gotta do, friend." And then I quickly realized as they kept talking that it wasn't as great as I thought it...

It turns out that the stylist was telling the client, who I was assuming was, like, an existing client for a while, that, "Oh, no, don't worry. You aren't included in the price increase. Like, all of my existing OG clients, they're grandfathered into your price, so you don't have to worry about that. It's really just $5 to $15 more dollars for all the new clients who are coming in."

I was like, "No!" And then to make it even worse, the stylist said that they have not had a price increase in two or more years. I was dying inside. Now, I want you to give yourself grace and know that I care and love for you, and that's why I'm making this episode if this sounds like you, right?

If you have not had a price increase in a long time, if you're grandfathering your existing clients into, uh, into your old prices, and if you're not having big enough price increases right now, then I want you to know that it's the norm, you know? This has been the norm, and, and we just unfortunately don't have the education that we need to be able to continuously grow our businesses as any other business would, and that's why I'm making this episode. That's why I'm an educator, because I want you to be successful. So pat yourself on the back, and I want you to take this podcast, uh, episode as educating you a- and keeping an open mind.

I don't want you to feel shamed. I, I want you to celebrate yourself for how far you've come and, and the hard work that you've done to get here, and I want you to celebrate yourself for the commitment and decisions that you're gonna make moving forward. Okay? Let me guess.

You are a hustling, bustling hairstylist behind the chair working so hard to build a beautiful career for yourself, one that gives you time, freedom, and energy to spend with yourself, your family, and your friends. But you feel like you're always working in your business even when you're not behind the chair. My name's Hunter Donia, and I help you automate your systems and implement really beautiful strategies so you can grow your business without the overwhelm. And this is the Modern Hairstylist podcast.

So like I said, I was dying inside. Like, a pr- hasn't had a price increase in two plus years, grandfathering their price, their prices in, and freaking $5 to $15? That's no price increase. Especially after two years, right?

Because prices of things go up, right? Prices of things goes up. Cost of living goes up. Rent goes up, especially in suites, right?

So literally if you are grandfathering your existing clients in, then you are losing money. Like, your income is not increasing. It's declining. And people are like, "Oh, well, I'm comfortable with my income that I'm making right now."

It's like, no. You're comfortable with it right now, but guess what? You're not gonna be comfortable when you realize in five years that you're making significantly less than you were before, right? Because you need to have price increases to balance out the inflation and the cost of living and all of your expenses and all of those things.

Okay? So that's why I'm saying, like, more than two years, like, oh my god. And, you know, when I say price increases, I think there's, like, two different types of price increases. I think that there's just like, you know, like, your good old, like, inflation price, price increase, like, your good old, like, oh, like, things are more expensive price increase.

That can be, like, a good, like, $5 to $15. Sure. Whatever. But when we're talking about, like, a real price increase, a price increase that is, like, essential for your business as you grow, I am talking, like, like, $10 to $20 to $25.

Like, that's the types of price increases that, you know, my students in my programs are making because they're growing so fast and they're booked and busy hairstylists, right? So first thing's first, if you are not raising your prices across the board for every single one of your clients and services at least by, like, $5 to $15, like, per year, if not twice a year, then you are most likely running into the negative, friend. And I would recommend that you have some sort of bookkeeper, uh, somebody who can help you track your finances and your profit and loss and see what your growth is. We need to look at our numbers.

We need to make sure that you are running a profitable business. Okay? So that's kind of my rant about, you know, an inflation price increase. Like, it's essential.

There's no arguing it. Like, that is just, it just needs to happen, period. So now that that's out of the way, I want to start to get into the juicy stuff, right? So when are you ready for a price increase, right?

Uh, how much should you raise your prices? And how do you talk to your clients about your price increases, and what do you do if they're upset about it, right? Do you put a frame on your station saying that your prices are gonna go up? Uh, do you tell every single one of your clients every single time?

Do you send out an email? Do you not tell them?Right? Do you just not tell them at all?

Now, where I wanna start is, how do you know if you're ready for a price increase? How do you know if you can actually sustain one? How do you know if you're ready for one? How do you know if it's the right time?

So first off, I wanna disclaim that, you know, you are responsible for your own business. So I am just giving you my advice based upon, you know, what I've learned from my mentors, such as Briceva, uh, what I've seen from my friends, what I've seen from my students, what I've seen from my own business, and, you know, just the industry in general. That's the perspective that I'm gonna be speaking from today. Now, when it comes to, uh, are you ready, there's a couple things that we need to look at.

So number one, we need to look at how well are you retaining your existing guests, right? So when a f- a client first comes to see you, how m-... how long does it take until they maybe don't see you again? Are you keeping them around?

Do they come back and see you, right? Are you giving a really fantastic experience and nurturing that client in between appointments so that way they will come back to you, right? Um, and then we wanna look at how far booked out are you and, um, you know, how long it would take for a new client to get an appointment with you. Now, this could differ based upon what your specialties are and if you pre-book yourself.

But regardless, if a new client has to wait four weeks to get in with you, maybe even a little bit more, then that's when we really do need to consider a price increase. Because new clients really don't wanna have to wait that long most of the time. Sometimes they do. Sometimes they're like, "Yeah, well, I'm looking for somebody who I can see, uh, maybe in a month or so."

But the problem is, if your books are full of people who don't want to pay a higher price and you are blocking new potential clients who would wanna pay your higher price from getting in, then you're doing a big disservice to yourself, those new potential clients, and to your existing clients who would pay that higher price but they can't get an appointment at a time that's convenient for them because your book is full of clients that would not pay your higher price. Does that make sense? So when we don't have our prices as high as they need to be and you are blocking new clients from coming in because they don't wanna have to wait so long and you can't even get your existing clients back in your book who would pay more, right, that is a problem everybody's losing at the end of the day. So you need to consider those things when we are thinking about making a price increase.

Like, that is how business works. It's supply and demand. Now, speaking of supply and demand, you also have to take in consideration how many new guest requests you're getting. Now, it is possible, if you are booked out, like, four weeks at a time or more, then, you know, you might not be getting new clients on your books just because they can't get on your books in a convenient time.

So when we look at new guest requests coming in, we kind of have to, uh, we kind of have to, like, take that in consideration. However, the way that I set up my system and I teach my students in Pre-Visit Pathway, um, you should be able to measure how many people are interested in getting an appointment with you without them even booking on your books yet. So they have a little bit of a better measure in analytics to be able to see how many guest requests they're getting, but then if people are actually going ahead and booking online or not, right? Because, uh, I coach to not having your online booking open to the public until you know who's trying to get on your books.

So anyway, you really wanna take in consideration how many people are requesting to get an appointment with you. Now, if you have a lot of requests, um, I would say ma-... and it depends on your specialty. It depends on, um, a lot of different things.

But if you're getting a fair bit of requests every week, every month, right, and they're ideal clients, and you are booked four-plus weeks out, then you are probably 100% definitely ready for a price increase, okay? Also, if you are delivering an amazing guest experience, if you have, uh, leveled up your guest experience, if you've gotten, uh, specialized in some really interesting things, like, yes, that is super awesome and definitely can, can justify a price increase, but not by itself. You need to know that you are ready to possibly lose some clients if we're gonna have a real price increase, right? Five dollars, will, you will not lose anybody.

I promise you. You might lose one person, and if you do weekly clients, right, like if week, week, like, a lot of weekly styling, then maybe, possibly, but five dollars is nothing. You do not have to be scared of five dollars, friends. But when we're talking about, like, a $20 price increase, 25, like, a little bit higher, um, that's when you know you, you need to be ready and you need to be very okay with losing people.

Now, it's gonna suck. It's gonna be scary. It's going to suck regardless, but the whole point of a price increase is to make sure that you're weeding out people who don't wanna pay your higher price so you can make room for people who will and want to pay your higher price, right? So now that you know that you need a price increase, how do we actually roll it out?

How do we make sure that all of our clients know about it? Do we even need to make sure that our clients know about it? The grocery store doesn't tell us when they're raising their prices, so why should we have to tell our customers when we're raising our prices? Friend, here's the difference between you and the grocery store.

You don't have a really special, uh, relationship with the grocery store . And as much as I talk about boundaries, as much as I talk about, you know, splitting yourself from your business, at the end of the day, in your client's perspective, you've created a strong relationship with that person. That person loves to come back to you and talk about your kids and what's going on, and they trust you. You touch your clients.

You literally touch them, right? And that's a really, really big trust-builder. That's something that is really, really deep psychologically. Although, you know, we don't think about it that way, it truly is.

So-That person trusts you. And when you go ahead and you raise your prices and, you know, your client maybe notices and you haven't told them, they may think that you're trying to pull the wool over their eyes. They might think that you are trying to just, like, get one over on them and, uh, you know, not talk about it and that is not okay. That is not a good thing.

We want to keep the trust going. Money is in a very deep thing for people sometimes and, you know, people are down to pay your new prices most of the time but they need to sometimes r- know what to expect and they expect transparency from you to be able to know the tea, okay? Some people literally just need to be communicated with to feel good about the experience that they're having, so make sure that you tell your clients about your price increase. All right.

Let's talk about the other ways that you can d- go about it. One way is having a cute little frame on your station that says, "My prices are going to raise," and this that and the third. That's fine, you know. You do definitely run the risk of your clients not reading it, claiming that they never knew about it.

Um, you know, you may run the risk of not leaving that frame o- up long enough for your clients to all see it. Um, it may just seem like as not, you know, uh, transparent. It may not seem as, you know, up front and center. However, I don't think it's necessarily the worst idea.

So, um, I think that by itself, meh, it's not my favorite method. Um, maybe w- along with something else, yes, I think that's great. But by itself and nothing else, meh, I don't know if I absolutely love it or I'd recommend it. It's fine.

It's not, like, absolutely terrible. I think not telling your clients is borderline absolutely terrible. Um, next one, telling every single one of your clients in person at their appointments. This one, I definitely like better than the past two that I just mentioned.

However, it's still not my favorite and we'll get into my favorites in just a moment. But here's the really awesome thing about telling people in person, is that you are extremely transparent. You know for sure that that person got the message. You're able to have a conversation about it if that's something that you would view as a good thing, um, which it would be a good thing in one way or another at the end of the day.

But, uh, it i- it is a very effective way of doing it. However, it definitely has its cons and, um, I'll list a few of those cons for you. So number one, I can't keep track of who I told and who I didn't tell. I have no idea who I told and who I did not tell, um, especially with a low-maintenance clientele.

Like, I mean, I'm only seeing my clients every three months, so I mean, what am I gonna do, like drag out my process over three months, you know? I- I- I- I can't do that. I don't know who I told and who I didn't tell and it's- I'm too lazy to keep track of it. So I really don't love this for me personally for that reason first and foremost.

Okay, couple other cons with this one. I feel like I don't love having to do this with every single client through my client experience. Like, I don't love adding this into my guest experience. I think it's just quite annoying.

Uh, I don't wanna have to have the conversation at the end of my appointments. I don't love taking away from the guest experience. I don't love having to add five minutes onto the end of somebody's appointment when I have shit to do. Like, it's just quite honestly, like, I just don't want to do this.

Like, it's just annoying, right? And I think there's a literally a better, more efficient way to do this versus taking away from the client experience and forcing you to put more labor into your job, right? And the last reason is I don't love that y- I have to rely on myself to stay strong, have those hard conversations with every single one of my clients. It is exhausting.

It's exhausting! And I wanna make sure that it comes out the right way, I wanna make sure that I don't let my ADHD get in the way, I don't wanna make sure I forget, right? I- I really want it to be a consistent, clean, intentional announcement that I make to every single one of my guests, so I don't believe that I'm able to carry that out very well, um, in this method. That's not to say that I haven't done it.

I did it with my first price increase in my, uh, own suite. I- I did it this way and it was just a mess. I literally could not remember who I told and who I didn't, I was forgetting things, um, I would hate myself when I would forget. Uh, it was just all over the place.

I did not like it at all. I will say, having those conversations in person, um, and, you know, making sure that I was transparent and honest with my clients, it was a really big eye-opener. I think it was a very strong exercise for me and a growth point for me to be able to see, like, my clients, like, reacting in real time in front of my face, um, to my price increases. I think it was a really special, beautiful thing, um, that helped me grow.

However, I still don't think it's the most efficient way, so let's get into the efficient ways. So my absolute favorite way to roll out a price increase is with an email. It's with a damn email or maybe two or maybe three, telling your clients, all of them, all at the same time, right? It's getting it all done in one click of a button with all of the words that you wanna put in there.

You have the receipts. You can, if you have a email marketing system or software, you know whether they opened that shit or not, right? Uh, 'cause you can check what- what they've clicked and what they've opened. Um, you can make sure that you just get the message across to everyone all at the same time with the- with- with links to services, you can talk about all of the value that you're adding into your service, um.

You won't forget. You won't stand down. It's just, like, a really clean, easy way to get it done and it's on your client if they didn't see your email, right? Especially if you send, like, a follow-up reminder that you did, which I sometimes recommend that you do.

Um-And so I love to do a price increase with a good-ass email, right? And bringing it a step further, I love doing it with a video. So in Pre-Visa Pathway, at the very end of the course, I teach my students how to roll out all of their newfound systems and boundaries to their existing clients and a lot of the times, because people bring their guest experience to the next level with PVP, they always, almost always, are rolling out a price increase as well when they finish PVP. So therefore, when they send out, um, this video, they're also going to have a price increase and so I teach them how to make a video and how to send out an email blast to every single one of their clients that's breaking down all of the new changes and boundaries and systems, but also their price increase.

And I teach them how to do it in a really sleek, professional-ass way. Um, the reason why I started to teach people this was this is how I did my, a really big sketchy, crazy, um, uh, announcement and price increase that I had at one point. I, I was drowning in my books. I was like three months plus booked out, I wanted to change to online booking only, I wanted to only book two months out at a time, I was changing my pricing structure, I was raising my prices by like an astronomical amount.

I was like, "What is the best way that I can make this a, a personal connection with my clients, but not have to do it with every single client when they sit in my chair, um, in person?" And it just seemed to be the best way, so I sent out an email blast to all of my clients with a recorded video of all of the things that I was changing and announcing, they had links and resources to go to to double-check all of the things, read what categories they fit into with my pricing, and it was beautiful. It was amazing. I- it went down so well and so I was like, "Shit, I need to teach people how to do this shit."

So in PVP, uh, that's what I teach my students to do and they freaking love it and it makes you look like a professional-ass person, but also a thoughtful, kind person who cares about their clients and understands the trust and the relationship that's been built. Okay, last but not least, what if your client's upset about your price increase, right? Do we back down? Do we grandfather them in?

Absolutely not, you already knew the answer. No, we don't back down. We stand strong in our boundaries and our decision and our choice of protecting ourselves, our family, and our friends, right? With this price increase, making our cli- our, our service to our clients more convenient, serving the potential clients who are begging, pleading to get on your books at a convenient time, right?

They need you. Your community needs you and they need you to have a price increase, period. If your clients want you to be in business in five years and they don't want you to go under, then you need to have a price increase, period. Okay?

Price increases serve you and your clients and your family and your friends. They serve everybody. Okay? When we set these boundaries down, when we have these scary changes, that's what you're doing.

You are not just helping yourself. This is not a selfish act and a lot of the times you just balance out because you need to freaking have a price increase for how fast everything is, uh, raising in price, right? Anyways, going on rants. What if your client's upset?

If your client's upset, then it's time to have a conversation with them about exactly what I just said. It is to serve them better. "Listen, Karen, I just noticed that, you know, it's really been hard to get you back on the books at a convenient time without me coming in earlier, staying late, or on my days off, and I wanna make sure that I can get you in at a time that works really well for you, and if I have any clients who are on my book, like taking up your spot who aren't willing to pay this higher price, then that's not fair to you. So I just wanna make sure that, you know, that you have the space and that you are able to get in at a convenient time.

This was essential for me to be able to serve you better." And then your client's gonna be like, "Okay, cool." If they're not like, "Okay, cool" after you have that conversation with them and if they're still upset, "All right, Karen, I totally understand where you're coming from and I really, really do appreciate your business and the loyalty that you've had to me over the past couple years and I understand why you'd be upset about this and I understand everybody has their own budget. Um, if you truly don't find these new prices to be, uh, you know, as valuable and, and worth it for you, then I would be happy to, um, re- suggest other hairstylists/salons in the area that may charge less than me for the services that you're looking to get done if that's what you would like.

So if you would like me to send you some, an email full of those things, then please let me know, uh, and I'll get back to you with those recommendations personally for you." Then, then they're gonna be like, "Okay, I'll suck it up," or they'll ask for the recommendations and then you bless and release, right? Because that's just sometimes what we gotta do, even if it's a client that we love, you know? Even if we really enjoy serving them, at the end of the day, this is a damn business and there's gonna be plenty of people who you are also going to love to serve and make a relationship with who can't get on your books right now because they're full of people who don't find you to be worth what your value is.

Okay? So stand strong in your decision, try to explain the tea, and if they don't sip the tea, then you give them the tea and then you tell them, you know, that you'd be happy to recommend them elsewhere for future services. This is not a negotiation. Your prices are not negotiable.

This is a freaking increase. It is a operational business decision. It is set in stone. It is happening, friend.

And if you can do this all over email, then you can choose all the right words, you can get it done. You don't have to hold back, you don't have to apologize. You should never apologize. You should just give them the tea and you should stay positive, you should, um, you know, make sure that you reiterate the value and you should show gratitude always when you're rolling out your price increases.

So I hope that this episode was helpful for you, my friend. Um, if it was, I would love if you left a five-star testimonial, little blurb about if you enjoy this podcast. Um, I would really, really, really appreciate it. It helps me get to even more beauty professionals just as yourself who are looking to set boundaries and grow their freaking business like a damn modern hairstylist.

So, so much love to you. I will see you in the next episode. Hit me up on the Instagram and I'll see you next time. Peace out, girl scout.

Bye-bye.

End of transcript. © 2022 Hunter Donia LLC.