Raising rates without losing clients – New York Times

Posted on April 23, 2008. Filed under: finance, management, small business, staff | Tags: , , , |

“What do you charge for a haircut?”

I ask that question at every workshop. It is the question everyone wants to know but may not have the chutzpah to ask, so I get the class to share. (With so many salons on the web, that question is much easier to answer these days!)

Most salons don’t charge enough. Some haven’t had a price increase in years.

Let me tell you a story about two stylists who used to be my employees and are now independent contractors. They have been gone from the salon for a decade and are still charging the price that the salon set for them when they left. In fact, recent gossip has it that one of the things they hated about working for me was that I made them raise their prices. (Heaven forbid, I want them to be successful!)

So, they have not raised their prices since. And they are booked months in advance. A current co-worker tried to explain to them that their clients would not leave if they raised their prices, but they were having none of it. Guess they showed me!

I have been pondering prices, demand, and the current economy. There are those who believe that there is no “bad time” for a price increase. I have to admit that even though I am feeling a little tight in my schedule (a sign that demand is higher than supply and a good indication that I should increase prices,) I am concerned about raising prices when all the news seems to be talking about tough economics times.

I have only been a salon owner for 17 years, so I have not weathered any huge economic downturns. I would love to hear from those of you with a longer track record who can tell us how you weathered the storm in the past.

In the meantime, here is a article from the New York Times on the subject. Let me know what you think.


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2 Responses to “Raising rates without losing clients – New York Times”

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AMEN – raise those rates! So glad you like my blog and I love how you’ve taken these profit principles to heart. I used to joke about the fact that I pay my stylist to make me look beautiful NOT for a hair cut or style. I used to go to this stylist who was FABULOUS (still us, just too far from where I am) He charged a fortune and was done cutting your hair in I swear – 10 or 15 minutes. I was outta there in less than half and hour. I loved it. I could have an awesome cut and look great for my 2 o’clock meeting. So he sells timeliness (and style). Some people don’t want that, but I did. I also like to just drop in – and he could always take me because he was so fast. You can just imagine how many clients he could “process” in a day !!!

Keep it coming love your stuff. I’m going to send my stylist to your blog!

Ivana, I read once that you shouldn’t charge for the hour, but for the value you bring to the hour.

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