With inflation rising, we’re seeing significant impacts on small businesses, including salons, spas, and skin clinics. One immediate strategy to address this is by increasing the cost of products and treatments in your business, but unfortunately this is much easier said than done. Most of your clients will already be concerned over their rapidly climbing cost of living, and pricier products and treatments are yet another burden for them. As a result, most clinic owners are incredibly apprehensive about passing on their increased operating costs to their clients, and fear backlash when delivering this news.
While increasing the prices of your goods and services can be worrying, it is also essential for business growth and in some instances, keeping you afloat. If you do decide to increase your prices, how do you ensure their loyalty doesn’t disappear? We’ve outlined 4 tips below.
1. Be transparent & upfront
The clearer you are with your clients, the less potential there will be for any misunderstanding or misgivings. Being direct, honest, and open about the reasons behind the change will increase customer trust and decrease their frustration. You and your staff have nothing to be nervous or embarrassed about - avoid dancing around the subject or presenting any shyness.
2. Give reasons for the price increase
Make it clear WHY you’re raising the prices. For instance, your rent may have increased, or your brand partners may have raised their prices due to increasing product production or supply chain costs. The rising cost of living is a universal experience, so be clear that you are not doing this for profit but are merely responding to the market environment.
3. Choose the right time and channel
Give your customers as much notice as humanly possible - we’ve seen various salons provide weeks or months warning. You need to give your clients time to come to terms with the price increase as they may need to alter their personal budgets as well. A good time to consider raising prices is at the beginning of the financial year or even after a sales period (EOFY sales or Dec/Jan sales). The tone in which you announce the news is also important. Remember, you are a real person communicating with other people, so don’t strip your communications of humanity. Show your human side, with compassion and understanding, and offer to answer any question. This will show that you appreciate and respect your clients, ideally helping to retain the relationships that you have carefully fostered.
4. It’s all about value
If your clients value their experience with you, they’re less likely to worry about a price increase. Focus on the benefits of your service and knowledge of your team, emphasise your product quality, and ensure you’re continuing to offer value and excellence wherever possible.
Something to consider before you put up your prices, is to look for other potential ways to cover your growing costs. This can be done through an annual review of your business expenses, which should include a comprehensive review of insurance, your suppliers, products you’re offering, as well as your EFTPOS provider. Smartpay has a Zero Cost EFTPOS solution that allows you to automatically pass on a small eftpos transaction fee when each client makes a payment. To most of your clients, this fee is a few extra dollars to ensure your prices don’t inflate, but for you (the business owner) the accrued savings can be significant and can be invested back into your business!
Increasing your prices doesn’t always mean losing your valued clients to your competitors. Being transparent, communicating with kindness, and selecting the right channel and with enough notice can help ensure you keep your clients happy.
If you would like to start saving on your eftpos transaction fees, contact a Smartpay payment specialist on 1800 531 784 or visit their website.