Money Matters

Time to Up the Ante

Is your salon ready to raise prices? Getting clients to accept a price increase gracefully depends largely on how it is presented to them.

In February 2003, Lauren Cawley, owner of Volpe Nails and Hair in Johnson City, N.Y., raised the salon’s price of a permanent French manicure fill by $5. Not one of the nail techs who worked there lost a client. With a 20% increase in the price of the service, how is it that she didn’t lose a single client to another salon?

The success of Volpe’s client retention can be attributed to a number of different factors, all of which can be duplicated by any salon. Price increases can be a positive experience for your salon — and your customers — if you tailor the suggestions listed here to fit your specific needs.

Start From Within

A salon won’t have a successful price increase until it has the support of the entire staff. Notify staff members about the increase in advance — individually or as a group — and ask for their input. The transition will go much smoother if the staff is involved and supportive. There may be a technician who is worried about losing clients if you increase prices. It’s the job of the salon owner or manager to help her become comfortable with the increase. The technician will be able to respond to the client with confidence if you clearly present the reasons for the price increase.

If a salon rents booth space, it is very important that all renters agree to a price increase. Otherwise, the client who has to pay more may resent one tech for raising her price when the person at the next table did not.

Once there is unity in the salon, there are three things you need to decide: how, when, and why.

Notifying Clients

There are many different ways to let your clients know about an impending change in price, but the most effective way is by putting signs up in all high traffic areas. On the sign, state the date the price increase will take effect and what the new price will be.

Put one sign in the waiting room, one sign in the bathroom, and one sign where the clients dry their nails. Do not put signs at the nail technician’s desk. You don’t want the client to read it 15 times during the hour she sits getting her nails done because it will be the topic of every client’s conversation for the entire three weeks it takes for each one to come in for her appointment. Rather, let the client bring it up to you — just once — after she has read the sign you placed in a strategic location.

As with most things, timing is everything. Obviously, nobody wants to read the sign that says she needs to pay more money for her nails. She wants to read it even less when she is already thinking about bills. For that reason, do not increase your prices at the holidays, or at the beginning of the school year, when parents are buying school supplies or sending a child off to college.

now Your Reasons Why

Don’t raise prices because you want to make more money. This probably seems like the most obvious reason, but it is a poor reason, and more importantly, it is one that is hard to explain to clients. If clients perceive that you are increasing prices solely to give yourself a raise, it could cause resentment. Clients often look at what you charge an hour as what you earn an hour. To some clients, this is already more than what they make, and now you are asking for a $2-$5 per hour raise.

Here are just a few better reasons to raise prices. The clients will understand them, and you will feel more confident in explaining them.

  • The price of product has gone up. When you tell clients the cost of your supplies has gone up, they expect the price to go up for them. They understand you are running a business, and that’s the bottom line.
  • The service is more work for you. Clients expect to pay more money for a service that is more difficult. Even if you can perform the service in the same amount of time, the more challenging the technique is, the more you can charge. An example of this is the permanent French. While you might take an hour and 15 minutes to do either a regular full-set or a new set of permanent French nails, the expertise required to do pink-and-whites qualifies as a reason to increase the price. Cawley raised the price of her French manicure fill for this reason. Before the price increase, “It got to the point that I would get mad when I saw my French clients walk in. I knew their nails were going to be more work for the same amount of money, and I resented it,” she says. After she raised the price of the service, Cawley looked forward to the clients coming in because she felt she was being paid what the service was worth.
  • You — or a particular service — are in high demand. This is a reason you probably will not want to share with your clients, but it is a smart business move. When you have clients waiting on a list to get into your appointment book, or if you are turning new clients away because you can’t fit them into your schedule, you are in a good position to raise your prices.

    Also, if your salon offers a service that other salons don’t offer, you are able to set the price higher.

    “Last year,” says Cawley, “three nail technicians [in our area] with a full clientele got out of the business.” Because of this, many clients were referred to Volpe because they offered the permanent French fill. Other area salons were still painting or airbrushing the white tip. “Because we realized the position we were in by offering a specialized service, we were able to raise our prices, and clients were still calling to get appointments,” she explains.

    Handling Complaints

    Even if all the conditions are right and your salon implements a price increase smoothly, some clients will still complain. Your reaction to their complaints is often the determining factor in whether you will retain that client, or lose her to another salon.

    Alecia Spina rents a booth in Cawley’s salon. When one of her clients left a voice message that the price increase was “too much money” to pay for nails and she was canceling her scheduled appointments, Spina didn’t panic. Instead, she wrote the client a letter thanking her for her years of loyalty and friendship.

    “I was very upfront about the extra money I was charging,” says Spina. “I told my client that with the price of the fill and the tip she always includes, she was already paying me $27 dollars, so the price increase was actually only $3. Then I broke it down even more. I told her that it was really only a dollar more a week.”

    The letter concluded by saying how much Spina enjoyed their hour together, and assured the client that if she ever wanted to return, “there was always a place open for her.”

    The client called back within a week of the original message, and told Spina how much the note meant and that she wanted her name back in the book. Further, the client now feels a more personal loyalty to Spina.

    Raising the price of your services is inevitable if you’re in business any length of time. It’s true there is competition in the nail industry like never before, but that doesn’t mean you are required to undercut budget salons. Instead, aim at offering clients something they can’t get at the salon where each visit means a new technician.

    In order to do that, Volpe offers clients personal touches they value. For instance, each client’s file and buffer is stored in its own container and left at the salon. Clients can also leave polishes they have bought with the nail technician, and they know it will be there for them the next time they are in, and nobody else will have used it. Standing appointments are another way to make clients feel catered to and a part of the salon.

    In addition to this, when the price of the French fill went up, the technicians at Volpe told clients they were no longer accepting tips on that service.

    “My clients couldn’t believe it,” says Sue Carmen, another tech at the salon. “They would hand me a $5 tip and I would hand it back.”

    Carmen thinks it took the pressure off the clients. “I wanted them to know that I absolutely did not expect them to tip,” she says.

    Once the clients knew there was not a subtle expectation to tip, many said they appreciated the new policy. Other clients, who could tip without it pinching their budget, resumed tipping after a few months.

    The most important thing to remember as you determine if your salon is in the position to raise prices is this: Ultimately, the clients make the final decision.

    Whether a salon offers a slow relaxing pace or a timely fill to accommodate the crunch of their busy lives, clients want to be treated well and walk away satisfied. Clients will be willing to pay the extra few dollars to get an appointment at a salon that offers attentive customer service and consistent, quality nails.

    Michelle Pratt is a nail tech at Volpe Nails and Hair in Johnson City, N.Y.

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