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#73 HOW TO INCREASE YOUR PRICES

#73 HOW TO INCREASE YOUR PRICES
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We all get to the point in our lash career when we realise our skills have improved & we think that our prices should also increase to reflect how awesome the lashes we do are and also our increased running costs.

The average set of extensions will cost you as a technician (in product alone) from $8-$10 per set. You then have your rent, power, phone, your time, marketing costs, wages (if you hire someone else), GST (if you are turning over more than $75,000 p/a in Australia), tax…the list goes on!

Understanding exactly how much it’s costing you to do each set is essential to know so your prices are at a level which allows you to make a decent income and profit.

We wrote a couple blogs on exactly how you should be doing your finances in your business and an easy way to figure out exactly how much a set is really costing you….

 

 

 

HOW DO YOU INCREASE YOUR PRICES WITHOUT UPSETTING FAITHFUL CLIENTS AND SCARING NEW CLIENTS?

The amount that you should raise your prices is based on a few factors;

  • Your training level
  • Your area and the price points
  • Your overhead costs
  • How long a client has been loyal to you.
  • How much your stock is costing you

Once you have decided on what your price increase is, the next step is deciding on a date to change them by, allowing time for you to warn your current clients, change all your menu’s, website, etc.

A lot of businesses will increase their prices at the end of a financial year (June 30th).

Decide if you are going to increase all services or just a couple of services too.

 

 

 

IMPORTANT NOTE:

Inflation is the general increase in prices and how much you can purchase with your money. A packet of chewing gum 25 years ago was $0.25 cents. Today it is over $1.50. The chewing gum has not changed, it is what your money can buy that has changed.

The average inflation rate per year is approximately 2.5% in Australia, about 2% in New Zealand and the USA.

 

WHY IS THIS IMPORTANT TO YOU?

Because what you earn for each set and refill can buy you less and less each year. If you charge $100 for a refill in 2015 and $100 for a refill in 2018 - then you are doing a disservice to yourself. Because that $100 can’t buy as much as it could in 2015.

It is very common practise for businesses to increase their prices each year to compensate for inflation. Usually they will increase them by 2-4%.

 

Also this means that you generally are paying an additional amount each year for your stock to deliver a set of lashes.

So your profit goes down yet again. Please note that not all companies will increase their prices each year, but most do.

 

 DON'T MAKE A BIG DEAL ABOUT IT

I am on the fence about the next point. I’ve noticed many businesses like Coke, McDonalds etc, increase their prices and don’t make a big deal about it, don’t let customers know etc. They just do it.

I personally, am more on the side of not communicating to your clients about a price increase and just doing it. If customers ask about an increase just let me know honestly why you have.

The bigger the deal you make about it, the bigger the deal the customers will make about it and you may be setting yourself up for future problems by letting people know about the increase.

HOWEVER...

If you do decide to let your regular clients know that you will be increasing your prices as of a certain date. You could send them an email or when you are doing their refill let them know that the next refill will be a certain price, so as not to shock them. You can be honest with them and tell them why you are increasing your prices for people generally respect honesty. 

Use things to justify why you are increasing your prices. Like if you attend a class / extra training etc communicate why and how the customer will benefit from this.

 

 

A FEW ADDITIONAL OPTIONS:

OPTION 1: Keep all your old clients at your current rate and the higher prices are for the new clients.

OPTION 2: Increase the prices and make sure you let all of your clients know well in advance. Email them out with an exact date you will be increasing prices and by how much. Tell each client when they come in that is what you are doing.

OPTION 3: Another way you can increase your prices is not to increase your main services (like full sets) price but instead your additional services (like refills). You may notice that you actually sell more refills than you do full sets.

So overall this may be more profitable for you. 

 

BOTTOM LINE

You have every right as a business owner to charge what you are worth. Going into price wars with your competition and not charging what you are worth will only do yourself injustice but also the industry.

It is perfectly normal for a business to increase their prices.

Coke does it almost every year and it isn’t a big deal. McDonalds do the same thing and don’t tell all their customers about it.

Understand that there are many MANY customers around. If they have eyelashes, then they are potential clients! So if you lose a client or two, don’t stress, just replace them with new clients who are willing to pay the higher price. Just remember to know that you ARE worth it ❤️

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