E13. It’s Time to Raise Your Prices (BONUS)

If you know you need to raise your prices… but you’re not sure how or when to actually do it, this episode is for you 💅

After covering the mindset behind pricing and how to calculate your numbers, this episode is the final piece: executing your price increase the right way 🙌✅

In this episode, we talk about:
✨ When you need to raise your prices urgently vs strategically
✨The best times of year to increase (and why timing matters more than you think)
✨How to raise your prices without shocking or losing your clients
✨My exact transition strategy that keeps clients loyal while increasing your income
✨How much you should increase your prices by (and how often)
✨What to do if you’re significantly undercharging

We also break down why it’s okay to lose clients during a price increase and how that actually creates space for better, more aligned clients 🙌💓

If you’ve been putting off increasing your prices, consider this your sign 🙌 

With the new financial year around the corner, there’s no better time to reset your pricing and start charging in a way that actually supports your life and business 💅💓

Don’t forget to rate this podcast 5 stars ⭐️

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Transcript

SPEAKER_00 0:00

Hey everyone, welcome to Blossom and Business, the podcast for beauty business owners who are ready to treat their business like a business, not just a hobby. My name is Monique and I'm a Melbourne-based salon owner and educator and I'm here to help you grow your income, attract the right clients, and build a business that's actually sustainable. So if you're in the beauty industry and you're ready to level up your mindset, your marketing and the way that you run your business, this is the podcast for you. I hope you love this episode, now let's get into it. Hey everyone, welcome back to another episode of the podcast. This month has been all about pricing. If you didn't see already, I already did an episode about getting into the right mindset to value yourself as a Nelltech or any beautician out there. Also a little bit about the controversy surrounding Nelltech pricing. And then I did another episode all about calculating your pricing so you know exactly what to charge. Now, in this episode, I wanted to do a little bonus episode, it's gonna be a little bit shorter, all about how and when to raise your prices. Now, especially after the last two pricing episodes, you've probably realized that you need to increase your prices. You're in the right mindset to do so, you've done the calculations to know what you have to raise them to, but how do you actually do it and when is the best time to do it? So, timing-wise, if the reason that you need to increase your prices is because you're significantly undercharging, whether you're earning less than minimum wage or maybe you're not covering your overheads, expenses, all of that, I would be doing it ASAP, like literally immediately, because every second that you wait, you're continuing to undercharge. Later in the episode, I'll go into how exactly I'd recommend doing that. But if you are just increasing your prices because you want to increase your profit, maybe your value and experience overall has increased, and you just want to do like a general increase, there are certain times in the year where price increases are less likely to impact your business. Firstly, new financial year. So the end of the financial year is the end of June. So July 1st is when the new financial year begins. So just naturally, people expect businesses to increase their prices going into the new financial year. So that's why it can be a really great time to increase your prices then, because it's already expected, it's not so much a shock to everyone. The second option is Christmas time. Beauty is huge at Christmas time. Everyone wants to look good and feel good for the holidays. Everyone is desperate to get an appointment, especially with their go-to technician. Not many people are really gonna care that your prices are increasing because it's already such an expensive month already. It kind of just gets lost in all of that. So that makes it less likely to lose clients around this time. But if you do lose clients, it's a lot easier to replace them because everyone wants beauty services done around Christmas, everyone wants to look and feel good, and even if there's someone that doesn't get their nails, lashes, brows done regularly throughout the year, Christmas is usually the one time of the year that they are gonna do that. So if you lose clients increasing your prices before Christmas, it's fine because it's gonna be so much easier to replace them. As I've mentioned so many times, no client is a permanent fixture in your business, and just because they no longer see the value in your pricing or they can't afford it, for whatever reason, they can't continue to book with you, it's okay because it does create space for new clients to book with you that do align with your business and value your pricing. So losing clients isn't always a negative thing. So not only that, but you can also increase your revenue a whole lot more going into Christmas because you're already going to be earning probably a lot more than you usually do on a monthly basis in December because it's so busy, regardless of whether or not you extend your hours. Where most businesses are normally at 70% capacity, you're very likely to be like full to the brim, 100% booked during this time. So not only would you be earning more naturally with your original prices, but with your new prices, you're going to be earning even more, so it's going to be your biggest month yet. So new financial year and Christmas time are my top recommendations, given that you are just increasing for profit purposes or because your experience or whatever has increased. For me personally, I normally do increases closest to new financial year. For me, I'm mostly just increasing at this stage, more for increased experience, increased skill set, and any increase of supply cost due to inflation and things like that. I've already calculated my pricing, I know where it sits at. There are a few services that I have to go in and tweak a little bit more just because they're not sitting where they're supposed to be, numbers-wise. And some services that I'm extending, I do have to increase those as well because it's now a longer appointment. So for me, more because I've already done my calculations and my pricing is already at a good place. I would say my increases are more like $5 a year, maybe $10 a year, sometimes it's $10 at once, or maybe it's $5 at the financial year and $5 towards the end of the year going into the new year. So I'll be increasing my prices this financial year. It'll be like a small tweak, but then I'll revisit November, December, see if anything's changed. If it hasn't, I'll leave it and then I'll revisit it new financial year next year. And you can just increase your prices simply to gain more profit, but you do need to make sure that the quality of your work and your pricing align. Because if you give like low to mid-quality work and your pricing is quite high, then that's when you're gonna kind of get that ripoff over charging label. But the people that can genuinely charge $100-150 sets of nails, their quality is usually like 11 out of 10. So if you want to charge like higher prices, not just based on how people value it, that was a whole other episode, but based on your numbers, it's quite profitable, like very profitable. You need to make sure your quality is top tier. Now, what I used to do is increase my prices new financial year and the new year, but I've decided that I won't be doing it new year increases anymore. If I do feel like I need to increase my prices around that period, I will definitely be doing it before Christmas. So as much as I love the idea of like new year, new pricing, new business structure, whatever, the reality is January and February are kind of those slower months. Like if you're gonna have any slower months in the year, it's probably gonna be January and February. And I do plan on doing an episode onto how to manage through those months and reduce them from being slow and keep them consistently busy. That's gonna be closer to the time. But typically, in most cases, if a client's gonna stop coming, it's probably gonna be then. And plus, a lot of those clients that you get at Christmas time, unless you can really lock them in, they're probably not gonna come back because a lot of them are just going to be those one-off, just get things done for Christmas kind of thing. So by increasing your prices after Christmas, some of these people already don't have incentive to come back, and then a price increase on top of that is just gonna make it a lot harder to convert clients. So I would actually advise against doing new year price increases and instead just move it a month earlier and do it for Christmas. Now, as for how you would increase your prices, if it's just like a general price increase every six to 12 months for either more profit, higher experience, all of that, what I like to do is a transition off period for my clients because it's not really an urgent price increase. I don't need it like done tomorrow. I can allow more wiggle room. I personally would highly advise against just changing your prices overnight. Like I know some businesses do it, like there's a lot of businesses, especially Coles, Wars, all of that, they do that. Even subsylons do that and no issues, but I feel like it can put a bad taste in some clients' mouths. So I feel like giving notice is always the best option. But in saying that, you don't need to post about it. You don't need to post your price increases. You can just tell the clients that are going to be affected. So if I'm increasing all of my pricing, I will just send an email to everyone. If I'm increasing most services, I'll just send an email to everyone. And this is everyone that's had an appointment in like the last like probably 60 days, because like the longest like time people go between appointments is maybe like a brow lamination, eight weeks. Any further than that, then I don't really class them as a regular. There's still a client, just not a regular. So I normally send it to my regulars, and because I do nails, lashes, and brows, the absolute furthest apart their appointments would be if they are coming in regularly when it typically needs to be redone, is normally eight weeks. So I kind of look at that 60-day mark and only send it to people that have come within those 60 days. So you don't need to announce it, and the reason why you don't want to announce it is because, first of all, most of the people that follow you on social media probably don't book in with you anyway, so it's just gonna be irrelevant. And secondly, it can kind of put them off, like even if they can genuinely afford your new pricing and they see the value in it, just the idea of a price increase, sometimes people are like, ugh, like they're increasing their prices. I'm not booking with them, like it just it's unnecessary. So you just need to tell your clients that are gonna be affected. I prefer an email, I'm non-confrontational, I prefer an email, but you can tell them in person. But because everyone doesn't check their email, I send a text to tell them to check their email, and in that email, it's normally just like a full like everything that's going on, if there's time changes, like to my hours or how long service is gonna be going for, because some people take that into consideration with public transport and work and things like that. Any changes of pricing, anything that's actually changing and how much is changing by with the actual price is going to be. Any salon updates, any reminders of policies that may get broken a lot of the time, or new policies I'm implementing, or anything like that. This is like the perfect way you've got their attention. They're already interested in reading because they want to see the new prices, they'll read all of the important information you put in there as well. But at the same time, I kind of like to keep it short and sweet. Like the longest thing is just like all the services listed out because I offer so much, but the actual message itself isn't going to be super long. I try not to like have like a full 360 on my business. If I am gonna be changing policies, unless it's something urgent, I will try and like space it out. So my personal way of announcing a price increase is via email and I set a text to make sure they check their emails, and I can see that they've actually opened the email on my system, but you can also do it verbally as well just to make sure and confirm that they know. So what I found works best for my clients, and I've actually never lost a client from this, like when clients leave, it's normally like way after I've done a price increase, it's usually not like immediately during the price increase. So for me, I don't think it's linked to prices, is through having a transitional period. So I have an online booking system and I don't change the price of people's appointments. What they book in for is what they get. So if they book in an hour set for $100, when they come in, that's what they get. Like $100, they're not gonna get charged any extra. So when I announce that I'm increasing my prices, I normally do it about a week before I'm actually changing them. So for example, this year I'm changing them July 1st, so new financial year, I'll be sending an email probably roughly a week before with all the information, and I'll say in the email, like the price increase is going to be in effect from July 1st. But if you go online and book now, you can pre-book up to two months in advance with the current pricing. So essentially they're getting a two-month discount because instead of just making them all pay the new prices July 1st, if they just book the appointment before I change the numbers on the system, they get a discount for two months. So not only do they feel like they're getting a discount and they appreciate the notice and the discount a whole lot more, you're less likely to lose them as a client because they have a transitional period. And I find most of the time if they are hesitant about the new pricing, by the time the two months pass, they don't care anymore. They see the value, just it's not an issue for them. So you're less likely to lose clients, but also it saves you having to change prices manually in the system for appointments that are already booked, and then you have to have that awkward conversation like, I know you booked this set for 100, but when you actually come, it's gonna be like 110 or whatever it's gonna be. It just makes your life so much easier, and that way anyone that doesn't pre-book before the system changes July 1st, and any new clients from July 1st, they have that new pricing. Now, this is something that again I would only do if you don't need like an urgent price increase, like your numbers aren't horrific. This is more if you're increasing your prices due to experience, profit, all of that. That's the only reason I would be doing it so gradual. With a more urgent price increase, I would be doing this more urgently. So you could still do a transitional period, but it can be shorter, like a week or two. Or you could even do my prices are changing next week, book up until the end of the month, whatever, and get the discount. So by not posting your price increase online, any new clients that discover you from July 1st or whatever date that you've changed your prices, they're not gonna know that the set was $10 cheaper, like a week ago. They don't need to know that. It's not relevant because what matters is the pricing that you have now. That is why I highly recommend avoiding posting your price increase. And if you are doing a more urgent price increase and you don't want people to book really far in advance with your current pricing, I would be blocking all of those dates off just so you don't have to manually go in and change those prices and message those clients awkwardly and be like, the price is going to be changing, and then you're gonna have people pull out. What I would do is I would have a shorter booking period available, tell my clients you can book up until like, you know, this date, and then on this date I'm changing the prices over, and then after that, it's going to be the new pricing. And as I've mentioned so many times, it's okay to lose clients. Not every client is going to be with you forever. Like, I'm sure you can think about have you been to the same doctor's clinic forever? Have you gotten your beauty services done the same place forever? Have you gotten your hair done the same place forever? Probably not. It's okay to lose clients, whether it's directly affected by your pricing or something else, it's okay because it allows room for new clients who value your services to come and book with you. As for how much to increase your prices by, it really depends on why you're increasing them. Like if you're significantly undercharging, you're likely gonna have to do a bigger price increase. But in saying that, you don't need to increase like $30 straight away, because that's like a lot, like a big chunk of the price, depending on how expensive the service is, like nails, lashes, all of that, that can be quite big. If it's something like um PMU or like hair, that might not be seen as as expensive. I would stick to that 10% range, like try not to go more than 10%. But if you are like very overdue for a price increase, maybe you could do like $10 every three months and gradually work your way up, or even $15 every three months, work your way up rather than doing like $30-50 at a time if you're like really behind in pricing. But 10% is normally a good range for people to see that there's a price increase but have it not really affect them too much. So again, urgent price increase, I'd probably do 10% maybe every three months, maybe six months if it's not too urgent, but for experience, profit, any sort of general increase, I would go closer to six to twelve months. You don't really need to be increasing them every three months. So after this episode, I am strongly encouraging you to organize your price increase. I have timed this episode perfectly for new financial year. You have time to get in the right mindset, calculate your prices, and organize how and when you're going to change them, which I'd highly recommend doing new financial year because it's going to be very soon. So because this episode is perfect timing, if you ever need a design to increase your prices, this is literally it. Otherwise, you can literally just increase your prices at any time of the year. I do just find that financial year and Christmas time are probably going to be your best bet if you're just doing a general price increase. If you are very overdue and you're doing it every three months, it's going to be like different times of the year. Also, guys, can we talk about how many episodes I've gotten out this month? This has been like a wild month. Like, if you're new here, I normally just come out with fortnightly episodes. But this month has been a little bit crazy. I've been pre-filming because in May I was in Japan. So it's currently April when I'm filming this right now. But I know you guys are gonna be listening to this later in June. I've been like prepping, I would be back from Japan by now. So when I start filming episodes after Japan, then I can give you guys an update. But pricing was such a huge topic, I didn't want to just do one episode because literally not everything would fit in that one episode. And then I was gonna have it in two episodes, but then I'm like, oh, they're gonna be too long. So now we've got three pricing episodes. Plus, we had our first ever guest speaker this month, and she talked about how to make more money in your salon. So it's all kind of financial related, which is amazing. It's like a finance month, perfect for new financial year. If you needed a sign, this is it. New financial year, guys. I'm telling you, this is perfect time. I have been hustling to get these videos out for you guys. I really hope that you enjoyed them and found them valuable. Can't wait for more fresh content. I feel like I'm done talking about numbers for like a long time. So bring on July. I'm very excited for new episodes. Thank you guys for watching, and I'll see you guys in the next episode. Thank you for listening to this episode of Blossom in Business. If you enjoyed this episode, I would love if you could give the video a thumbs up on YouTube or rate the podcast five stars on Spotify and Apple. If you don't want to miss an episode, make sure to hit the notification bell so you get notified every single time a new episode drops. If you want to follow along on my journey, I've put the links to all of my socials in the description. If there's any topics you'd like covered on the podcast or you'd like to apply to be a guest speaker, you can find the links in my description. Stay tuned for the next episode.