Should You Raise Your Salon Prices Before Christmas?

There's a right time to put your prices up, just before the busiest bit of the year, and a wrong one. Today, let's balance your need to grow your profits, and make sure you're profitable without looking like the Scrooge of the Salon world. Hello, hello, hello my Salon friends, Phil Jackson here, your Queen of Salons, coming all over the internet again with another dose of my Wise Owl Wisdom. How on earth are you? Achingly well, I hope, right at the end of September, heading into October, my favourite month of the year for two big reasons. First of all, your Uncle Phil's getting a year older. I get my birthday in a couple of weeks' time, and I am such a princess around birthdays. We have birthday week, my birthday month, we have birthday eve, and birthday boxing day. I'm a monster through October. And secondly, it's also one of my Salon Owners Retreats. Head over to salonownersretreat.com for details of the 2027 events, and we will be heading out to Alicante in a couple of weeks to make sure that everyone's set up for a triumphant 2027. So what are we talking about today? Well, we're talking about increasing our prices, and whether it's a good time to do it or not. And we've kind of got two things to balance. On the one hand, everyone's busy on the run-up to Christmas, and if you, at some stage, you're going to be busy anyway. I know not everyone gets a triumphant December, but if you don't get a very busy December, then usually November's really good. And if you don't get your prices up, then you've kind of missed out on an opportunity where we might have been able to make more profit. On the other hand, we're feeling that maybe everyone's a bit stretched financially across Christmas, and if you put your prices up now, you might lose clients at the worst possible moment. Maybe we then won't get that busy December, because your prices have put people off. And both of those things can feel true. But which one we go down, whether we're going to stick to our guns and increase our prices or not, well, that kind of depends a lot on your numbers. So what I've got for you today is just a very short, it's going to be a very light episode. You haven't got to do any sums, I promise. But we're going to figure out, I'm going to give you a few instances when I think it's a good idea to raise your prices ahead of Christmas, and a few indicators that it may not be the right time. So when might it be okay? The first one is we're going to let the numbers rule us, and that's utilisation. And for a price increase, generally, I want to see utilisation above 70%. If you haven't got utilisation to the stage where you're about three quarters booked or more, then maybe we're going to be putting people off and we're going to end up suppressing utilisation. And the columns are fairly empty already. But if your columns are generally full, and particularly if you're turning people away or you're running a waiting list fairly regularly, then absolutely that would be a strong indicator that there is the ability, at least in the business, to raise prices. Also, indicator number two, I want at least four months since you last moved your prices, your costs have gone up, wages have gone up, stocks gone up, your rents maybe, energy prices are going up, and you've been absorbing those costs rather than passing them on. It's time to increase the prices and make sure that we remain profitable. Also, if you're listening to this episode before the end of October, then I think you're probably okay raising your prices. I think, personally, if you raise them in November, it can look a little bit money-grabbing. It can look a little bit like you're just whacking the prices up before Christmas to get as much money through the till as possible. That said, if you're what we call in iceberg mode, what I call in iceberg mode, and we're trying to save a business and the price rise is vital, get on with it. It doesn't matter about the pricing. There's never a popular time to put your prices up anyway. So, we've already hinted at one or two of them, but when do I think price increases might be a bad idea? Well, firstly, if your columns aren't busy, if you're raising prices and you're not that busy, you might well be putting people off. So, the first thing to do is to fix your demand problem rather than making the demand problem worse. Now, the caveat to this, sorry, my eyes are running. I'm not crying about price increases, these new contact lenses. So, the caveat to that is unless you're the cheapest in town, people are not coming to you for your prices. They're coming because they like you or they like the results or they like the service, they like the team, they like the location, they like your opening hours. Unless you're the cheapest in town, they're not necessarily shopping on price. So, that buys you some freedom. It buys you a little bit of liberation when it comes to setting your prices. That said, supply and demand economics are at work. If you are not that busy and you put your prices up, you can expect demand to fall, not rise. There is an exception to that though and that's if you're too cheap. If your prices are making you look like you're not very good and that price perception is real, then actually raising your prices will increase demand rather than suppress it. Secondly, if you've raised your prices in the last couple of months, two rises in a year is okay if they're spaced out and I encourage everyone to look at two price reviews a year. I think it means that jumps tend to be a little bit more manageable rather than big hikes in the price. But if you're changing prices again very, very quickly, it starts to look a bit chaotic even if each price increase is perfectly justified. And the third time I would not touch your prices is if you don't know your numbers. If you're doing it because you've read that you ought to, if you're doing it just because you haven't done it for a couple of years, if you're doing it rather than because you've looked at your own numbers, it's not a great idea. Now, I have worked with one salon. I went into a salon as a consultant and they were based down on the south coast of England. Nice salon, actually, hair and beauty. And before I got there, literally two weeks before I got there, they'd put their prices up and they'd got it wrong. And we had to raise those prices again very, very quickly. Did people complain? Hell yeah. We had awful feedback from the clients. Did they leave the salon? Yes, a few did because it felt chaotic. It felt like we didn't know what we were doing with prices and they didn't know whether there was going to be another price increase in a couple of weeks time. But what I don't know is whether it was the increase that put people off or whether it was the chaotic feel that put people off. I'm never going to know the answer to that. But to be honest with you, in that instance, we were in iceberg mode. We were trying to save the salon. I'm not usually a business turnaround coach. I'm not usually a crisis coach. I'm not usually going into salons where the salon is failing and on its last legs. But this one was. So we had to do it. We had no choice about it. And there's a bit of liberation. In fact, I don't mind doing a bit of crisis coaching every now and again. There's a bit of liberation that comes with it. You've got nothing to lose. The business is failing. So we may as well give it another spin of the wheel. It buys up some very creative thinking, I think, when we're in crisis mode because we've got nothing left to lose. Around timing and communication, if you're doing it, do it now or do it with a little bit of notice. We don't need huge amounts of notice anymore. The reason for that is most people are booking online. If they're doing that, the salon software is doing the work for you because they're seeing the new prices when they start to book. So we haven't got to worry about putting announcements out ages in advance. If you can afford to, a beat the increase promo where people can either book now at the old price and get the old and book now and get the old price or buy a batch of appointments at the old price can work really, really well. And most salon software will allow you to do that. If you can't afford that, then don't run it as a promo at all. If you're doing it just because you're unprofitable, for goodness sake, don't let people buy batches of unprofitable visits. But you don't want to surprise people at the till, though, especially not in party season. That's how a price increase really starts to annoy people. Don't social media it. Social media is for good news, not for bad news. We don't want to talk about price increases. Can you imagine Tesco's going online telling you about them increasing the price of butter? It's just ridiculous. They wouldn't do it. But so do bear in mind, if people are booking online, they're going to see the new prices anyway. Otherwise, small notice on reception saying from 1st of October, our new prices will apply. If you need to raise prices, but you definitely can't, well, that's kind of legitimate. And then we have to do the other thing. So that's about increasing the profitability of the visits that are there without increasing prices. So how do we do that? Well, we're increasing the value of each visit, and that generally means add-ons and upgrades. Or cutting costs. And sometimes that can mean looking at who carries out a service using cheaper services with cheaper team members, keeping your more expensive team members for the more expensive services. The goal then is to make each visit more profitable. There's more than one way to skin a cat. So there we have it, my run through on price increases. If you're not in control of your pricing, if you don't understand why you're setting the prices that you are, you need to look at my program, Get Paid Properly. Head over to getpaidproperly.com. I literally take you through a very simple process, nice colourful spreadsheet, no nasty surprises. And I will show you to the minute how much each service should be earning you in order to hit your profit goals, cover your fixed costs, and your variable costs. I'll show you as a minimum how much we should be charging for every service. No more guesswork. No overwhelm. Head over to getpaidproperly.com. What about you? Are you increasing your prices before Christmas? What's the story that you'd like to share around price increases? What are you doing to make your business more profitable in these slightly turbulent times? Reach out and let me know. Phil at buildyoursalon.com. Scrolling at the bottom of the screen. Also reach out if you'd like me to interview you about your success story in your salon. Don't go thinking. You have to be part of the big... I get pitched a lot from big companies who want to come on the Build Your Salon podcast. I want to share salon stories as well. I want to share solo stories as well. There will be something in your business that's interesting to my audience. A little bit of your success that they can carry through into their own businesses too. Just a few short days until I'm coming all over the internet again welcoming you into my birthday month. And until then, take care.