Show Me the Money!

March 6, 2013 Stephany Toman permalink

revenue_growthShould you increase your prices? If so, on which services? Pricing is tricky, but with some deliberate thought before you adjust you can make the best choice for you given your current business objectives.

First, look around you.

What is the market rate for service offerings comparable to yours? Are spas in your area offering one hour massages within a pretty tight range? Is your current price somewhere within that? If not, is there natural room for increase that will bring your rates into the norm without pricing yourself out of the local market?

Also, are you known for a special service/technique/package that means you have some market power with regard to pricing? If so, a modest increase within that offering or offering set can take advantage of the work you’ve done building up that great service or package, and chances are clients you’ve already hooked will remain so with little or no push-back.

Second, look within. Your service menu, that is.

Raising prices across the board might not be the best approach when, instead, you can choose a type of service, say multi-process color, and opt to raise the average price on those. You know the real cost of providing your services, so use that knowledge to ensure that you are receiving solid prices where you’re offering up the best perceived value, and know where it’s best to let prices remain where they are, at least for the moment. There may be more room for price increases in a highly-coveted series of color treatments than there are in just haircuts/styling, for example.

OR you can create a new perception of a service by offering the same service for less time, and keep the price the same. With this strategy, throwing in a nice little take-away lotion or potion might be an additional consideration.

Pricing always boils down to knowing what you’re worth. What is the real value that your clients perceive in your services and offerings as a whole? There is nothing wrong with earning what you’re really worth where perceived value is high. In other services that may not be as coveted by your clients, a less aggressive pricing strategy may prove to be the best.

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