Increasing prices when you're charging 40% below industry averages?

#1
Hello,

Currently running a nail salon with no active marketing. The brand identity is very small, but I see a lot of potential upside to the business due to location and other various factors.

Prices are about ~40% cheaper than industry standards, but quality is basically the same. We are priced similarity to our competitors, and business is slow right now so maybe pushing an increase is not smart right now.

My biggest question is: How do I soften the blow on existing customers when raising prices? I am not sure if they value us enough to come back even with a 25% price hike. We do not have an email list to warn customers of the rate hike, and I feel like mentioning it to each customer isn't the best option either.

It's more of a soft rebrand than anything. We will try to put forth more value for customers when increasing prices, but not much will change besides some interior design and other features.

I am also trying to brainstorm a way to merge the current reservation system (via phone) with an online booking system. They aren't very tech savvy, so perhaps the best way to go about this is to actually get a bookkeeper. Thoughts?

We are just facing a problem where we are charging too little, and I am having trouble figuring out a way so as to increase the price without losing too many customers.
I appreciate the help,

Thank you
 

#2
Have you visited other salons in the area? Is anyone charging much more than you? Are they busy? If it's just nails, it's tough. We are predominantly skin and a lot of clients cross over. I don't think there is a huge amount of money to be made in just nails.
Regarding increasing your prices, I would put a sign up stating that from x date there will be a price increase. If business is slow and everyone around is charging the same, visit them and see what they offer. You may be surprised.
Increasing prices often means you start to appeal to different people. We're not all cost led!
New year and new start. Get an online booking system. It shouldn't cost a huge amount, and get clients to fill in consultation forms with all their details and add them. No book keeper required!

Vic x
 

JCH

Member
#3
Have you considered that perhaps people aren’t choosing you due to your low prices? By that I mean that people may think that the treatments may not be as good if they are cheaper than other people. Add in some little extras which don’t cost you too much but make your treatments feel luxury to justify it.

A sign/poster warning of the price increase seems like a good way to go.
 

#4
Have you considered that perhaps people aren’t choosing you due to your low prices? By that I mean that people may think that the treatments may not be as good if they are cheaper than other people. Add in some little extras which don’t cost you too much but make your treatments feel luxury to justify it.

A sign/poster warning of the price increase seems like a good way to go.
Have you visited other salons in the area? Is anyone charging much more than you? Are they busy? If it's just nails, it's tough. We are predominantly skin and a lot of clients cross over. I don't think there is a huge amount of money to be made in just nails.
Regarding increasing your prices, I would put a sign up stating that from x date there will be a price increase. If business is slow and everyone around is charging the same, visit them and see what they offer. You may be surprised.
Increasing prices often means you start to appeal to different people. We're not all cost led!
New year and new start. Get an online booking system. It shouldn't cost a huge amount, and get clients to fill in consultation forms with all their details and add them. No book keeper required!

Vic x
Thanks for the replies. So I will be getting an online booking system.

Also, I think just in general this month is traditionally bad for most Salons. I think raising prices is the right thing to do, but not sure if it's the right idea to do it at this moment simply because we are only booked for about 50-60% of our hours. That being said, a 10% price increase right now doesn't seem like it would make us lose any valuable customers.

Add in the online booking + ads, and maybe it will make up for it. Thoughts?
 

BannerPenguin

Well-Known Member
#5
Thanks for the replies. So I will be getting an online booking system.

Also, I think just in general this month is traditionally bad for most Salons. I think raising prices is the right thing to do, but not sure if it's the right idea to do it at this moment simply because we are only booked for about 50-60% of our hours. That being said, a 10% price increase right now doesn't seem like it would make us lose any valuable customers.

Add in the online booking + ads, and maybe it will make up for it. Thoughts?
If it helps, my opinion is there is never a 'good time' you tend to always find excuses why not to do it. Best to set a date, rip the band-aid and just do it :)
 

riva

Active Member
#6
Agree with @JCH that your prices might be putting people off. If its only slightly cheaper, its fine but 40% cheaper is an issue. Consider bumping it up 20%. 10% doesn't sound enough and as you're booked only 50-60%, add in 5 mins massage or something else so that the 20% is justified. If your products are imported, blame the poor pound value- your costs have increased. Just some ideas. Have a USP- maybe "we give you the best squeaky clean nails or softest feet" or something so that you guys feel different (provided you actually do it).
You will certainly lose some people but the increase in profits will make up for that loss and after awhile, it evens out. Also never forget that people assume they are getting a better quality product if its more expensive- that's been proven many times for most people.
 

TheDuchess

Well-Known Member
#7
I had a similar problem a few years ago and I am still struggling with it. Try all of Riva's ideas 'cos I've done these myself and they all work.

You can also go back to the basics of costing your treatments and try and find ways of charging what you need to per hour + costs and delivering your treatments at a competitive rate in your area.

It's taken me 2 years, but I've increased the hourly rate for my pedis by 25% by reducing the service time for the basic service and adding luxury options. We haven't significantly increased our pedis, nor our takings for pedis, but I have gained at least an hour of bookable treatment time a day and we no longer feel overrun with pedis. We've had a near 100% turnover of clients for pedis, we gradually lost our old ones but gained new ones who are better spenders.

If you're 50/60% booked you've got scope to add services at a price which works for you which you can sell to your existing client base and attract new clients.

Do you offer a paraffin dip? If you do gel nails on one hand at a time, you can do a paraffin dip wrap (soak a soft paper hand towel in paraffin wax and wrap it around the hand) on the first hand finished whilst you gel the second hand. Apply the dip to the second hand and massage the first lovingly (do their dominant hand first). Repeat with other hand and slightly shorter massage. This should only add 12 mins to your service times but the perception of luxury uplift is significant. I mix a basic priced paraffin wax with a soya based wax with a lovely aroma and use a good product under the mask to give the "wow" factor when the dip comes off.
 

#8
Agree with @JCH that your prices might be putting people off. If its only slightly cheaper, its fine but 40% cheaper is an issue. Consider bumping it up 20%. 10% doesn't sound enough and as you're booked only 50-60%, add in 5 mins massage or something else so that the 20% is justified. If your products are imported, blame the poor pound value- your costs have increased. Just some ideas. Have a USP- maybe "we give you the best squeaky clean nails or softest feet" or something so that you guys feel different (provided you actually do it).
You will certainly lose some people but the increase in profits will make up for that loss and after awhile, it evens out. Also never forget that people assume they are getting a better quality product if its more expensive- that's been proven many times for most people.
We are an asian nail salon, and there are many in our area, as we are priced with them. All of us are still priced below industry averages of ~40%.
e.g. our manicure is $12 vs $21 industry averages.

I had a similar problem a few years ago and I am still struggling with it. Try all of Riva's ideas 'cos I've done these myself and they all work.

You can also go back to the basics of costing your treatments and try and find ways of charging what you need to per hour + costs and delivering your treatments at a competitive rate in your area.

It's taken me 2 years, but I've increased the hourly rate for my pedis by 25% by reducing the service time for the basic service and adding luxury options. We haven't significantly increased our pedis, nor our takings for pedis, but I have gained at least an hour of bookable treatment time a day and we no longer feel overrun with pedis. We've had a near 100% turnover of clients for pedis, we gradually lost our old ones but gained new ones who are better spenders.

If you're 50/60% booked you've got scope to add services at a price which works for you which you can sell to your existing client base and attract new clients.

Do you offer a paraffin dip? If you do gel nails on one hand at a time, you can do a paraffin dip wrap (soak a soft paper hand towel in paraffin wax and wrap it around the hand) on the first hand finished whilst you gel the second hand. Apply the dip to the second hand and massage the first lovingly (do their dominant hand first). Repeat with other hand and slightly shorter massage. This should only add 12 mins to your service times but the perception of luxury uplift is significant. I mix a basic priced paraffin wax with a soya based wax with a lovely aroma and use a good product under the mask to give the "wow" factor when the dip comes off.
We don't offer that. I'll look more into it, it sounds pretty good. Is that an upsell or is it part of the package for you?
 

TheDuchess

Well-Known Member
#9
We explain it as an upsell and include it within a luxury service so the client knows how to ask for it again.

There are lots of Asian bars near us but prices have been set by the nonlegitimate businesses. Taking cash only is a good way to money launder the proceeds of crime. There's a business near me that I couldn't work out how they survived on their prices because I knew the overhead on the shop. Then they got raided...

My advice, visit the competition and check you don't smell the same. If you smell like a factory people will expect cheap prices.

Do your staff speak English well? Do they introduce themselves to clients and chat to them? Do your staff talk to each other as they work across their clients or do they focus on their clients. Do they explain aftercare? Have they been to college for at least a year or did they qualify on short 1-5 day courses?

These are the things which create your point of difference, not your ethnicity or country of origin.
 

#10
We explain it as an upsell and include it within a luxury service so the client knows how to ask for it again.

There are lots of Asian bars near us but prices have been set by the nonlegitimate businesses. Taking cash only is a good way to money launder the proceeds of crime. There's a business near me that I couldn't work out how they survived on their prices because I knew the overhead on the shop. Then they got raided...

My advice, visit the competition and check you don't smell the same. If you smell like a factory people will expect cheap prices.

Do your staff speak English well? Do they introduce themselves to clients and chat to them? Do your staff talk to each other as they work across their clients or do they focus on their clients. Do they explain aftercare? Have they been to college for at least a year or did they qualify on short 1-5 day courses?

These are the things which create your point of difference, not your ethnicity or country of origin.
All very valid points. Thanks for bringing these to my attention, even despite knowing them.

There seems to be a lot of things we can work on. Despite certification, customer skills are lacking.
 

TheDuchess

Well-Known Member
#11
Good luck it can be done. There are a couple of Asian staffed bars in Bath which are run like any other salon with much more sensible prices. The girls chat to their clients, the clients know the names of the nail techs. There is a human connection.

The clients understand that these bars are set up by techs fed up with being overworked and underpaid. There is a lot of support for them and people appreciate their efforts to offer a better service.
 

Beautiful-you

Well-Known Member
#12
Certainly in the U.K. a lot (not all) of Asian Nail bars have a reputation for "cheap" nails using unbranded products, getting clients in and out within an hour, poor customer service (usually due to language barrier) and I'm afraid to say, often poor hygiene However, most of them are still very busy because there's a lot of clients out there that don't care about any of this - they just want to get their nails done cheaply and quickly (as you usually don't need an appointment either, you can just walk in and wait).

It sounds to me as if you don't want to be "one of those" nail bars, so you need to find ways to make your salon completely different so you can attract a different clientele. The Duchess has given some very good suggestions.
I think the appearance of your salon from the outside and inside need to reflect your professional approach, the Nail bars I refer to often don't look welcoming or comfortable. Do you use a well known, reputable brand? Advertise the fact in your window display and inside the salon so your clients know they can trust your products. Is the salon always kept clean and tidy, with no food consumed by staff at their nail desks?! (Yes. I know this sounds ridiculous, but a nail bar near me is known for their staff to be sat at their nail desks, between clients, eating their lunch, then straight onto their next client without washing their hands!!!)
Also, smartly dressed, friendly staff make a much better impression.

In honesty, there are a lot of clients that will always go to the cheapest nail bar (often even after they have a horrific experience!) so you may well lose them, but they tend not to be loyal customers anyway as they'll just go for the cheapest and easiest option. We don't really need these clients. It's far better to have clients that want to look after their nails and come back regularly for infills and also other treatments and these clients are usually more attracted to a better quality service and are prepared to pay more for it.

So my suggestion would be, if you feel your salon is currently perceived to be "just like the rest", maybe a re-branding would be the solution?
 
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#13
Certainly in the U.K. a lot (not all) of Asian Nail bars have a reputation for "cheap" nails using unbranded products, getting clients in and out within an hour, poor customer service (usually due to language barrier) and I'm afraid to say, often poor hygiene However, most of them are still very busy because there's a lot of clients out there that don't care about any of this - they just want to get their nails done cheaply and quickly (as you usually don't need an appointment either, you can just walk in and wait).

It sounds to me as if you don't want to be "one of those" nail bars, so you need to find ways to make your salon completely different so you can attract a different clientele. The Duchess has given some very good suggestions.
I think the appearance of your salon from the outside and inside need to reflect your professional approach, the Nail bars I refer to often don't look welcoming or comfortable. Do you use a well known, reputable brand? Advertise the fact in your window display and inside the salon so your clients know they can trust your products. Is the salon always kept clean and tidy, with no food consumed by staff at their nail desks?! (Yes. I know this sounds ridiculous, but a nail bar near me is known for their staff to be sat at their nail desks, between clients, eating their lunch, then straight onto their next client without washing their hands!!!)
Also, smartly dressed, friendly staff make a much better impression.

In honesty, there are a lot of clients that will always go to the cheapest nail bar (often even after they have a horrific experience!) so you may well lose them, but they tend not to be loyal customers anyway as they'll just go for the cheapest and easiest option. We don't really need these clients. It's far better to have clients that want to look after their nails and come back regularly for infills and also other treatments and these clients are usually more attracted to a better quality service and are prepared to pay more for it.

So my suggestion would be, if you feel your salon is currently perceived to be "just like the rest", maybe a re-branding would be the solution?
Thank you for this thoughtful response. I have been doing some research on re-branding and what we would do and how. It seems like it's going to cost a bit of money, so not sure if it will happen this year, maybe later on in the year.

I like what you said "In honesty, there are a lot of clients that will always go to the cheapest nail bar (often even after they have a horrific experience!) so you may well lose them, but they tend not to be loyal customers anyway as they'll just go for the cheapest and easiest option."

I am working on a website right now with an online booking system. I think that + facebook ads if done properly should yield us some more work, but doesn't solve the problem of pushing prices.

We lack customer service skills, but are sanitary and use high quality products. I guess my goal will be to slowly shift the focus from us being a cheap nail bar to a nicer one. My theory is it is quite possible to be the asian type, but still charge more than competitors.

I am also trying to brainstorm a good sign-in sheet or what not. Any thoughts on that? How do we approrach a new client walking in with no receptionist? They will not know to "sign in" (this is so I can build a client list, we have no list as of right now despite getting repeat customers). I know, very sad. We've also had some trouble in the summertime with walk-in's getting neglected. I know the simple solution is to get a front desk worker, but that is out of our budget as of right now.


Thanks for the help.
 

Beautiful-you

Well-Known Member
#14
Thank you for this thoughtful response. I have been doing some research on re-branding and what we would do and how. It seems like it's going to cost a bit of money, so not sure if it will happen this year, maybe later on in the year.

I like what you said "In honesty, there are a lot of clients that will always go to the cheapest nail bar (often even after they have a horrific experience!) so you may well lose them, but they tend not to be loyal customers anyway as they'll just go for the cheapest and easiest option."

I am working on a website right now with an online booking system. I think that + facebook ads if done properly should yield us some more work, but doesn't solve the problem of pushing prices.

We lack customer service skills, but are sanitary and use high quality products. I guess my goal will be to slowly shift the focus from us being a cheap nail bar to a nicer one. My theory is it is quite possible to be the asian type, but still charge more than competitors.

I am also trying to brainstorm a good sign-in sheet or what not. Any thoughts on that? How do we approrach a new client walking in with no receptionist? They will not know to "sign in" (this is so I can build a client list, we have no list as of right now despite getting repeat customers). I know, very sad. We've also had some trouble in the summertime with walk-in's getting neglected. I know the simple solution is to get a front desk worker, but that is out of our budget as of right now.


Thanks for the help.
You're welcome.

What I would recommend is when a client walks in, whoever is nearest, or least busy just takes the time to say hello in a friendly manner and ask them to just take a seat until the next nail tech is available. Ask them if they would be kind enough to fill in their details on a record card (have a supply of them ready in your waiting area) so they can hand it to the nail tech when it's their turn. After the service the nail tech can write on the record card what they had done and file it in a suitable filing storage system (GDPR needs to be adhered to here). It can then be referred to and added to each time they come back. (This is what I do)

How about having a water dispenser in the waiting area too, and maybe even a little bowl of sweets? Just something to make the waiting area more welcoming.

Some ideas are obviously more expensive than others so you could gradually introduce them, cash flow permitting.

One thing that sounds like you really do need to look at sooner rather than later though (from your own comments) is improving your staff's customer service skills. They really are paramount for a successful business with returning clientele. If sending them on a customer handling course is out of your budget it is definitely worth holding a staff meeting and really explaining how important this is. It honestly would make such a huge difference and make you stand out over others. X
 

Traveller75

Active Member
#15
There's bound to be videos on YouTube teaching good customer service skills.
 

#16
Another question I have is how should I buffer time in between online appointments? Should there be a buffer time at all? Like should I allow back to back appointments, or add 5 minutes in between? Seems like if I did 5 minutes, would lose out on a lot of time throughout the day. Maybe I will just include it into the time it takes to do the service.
 

#17
You're welcome.

What I would recommend is when a client walks in, whoever is nearest, or least busy just takes the time to say hello in a friendly manner and ask them to just take a seat until the next nail tech is available. Ask them if they would be kind enough to fill in their details on a record card (have a supply of them ready in your waiting area) so they can hand it to the nail tech when it's their turn. After the service the nail tech can write on the record card what they had done and file it in a suitable filing storage system (GDPR needs to be adhered to here). It can then be referred to and added to each time they come back. (This is what I do)

How about having a water dispenser in the waiting area too, and maybe even a little bowl of sweets? Just something to make the waiting area more welcoming.

Some ideas are obviously more expensive than others so you could gradually introduce them, cash flow permitting.

One thing that sounds like you really do need to look at sooner rather than later though (from your own comments) is improving your staff's customer service skills. They really are paramount for a successful business with returning clientele. If sending them on a customer handling course is out of your budget it is definitely worth holding a staff meeting and really explaining how important this is. It honestly would make such a huge difference and make you stand out over others. X
I like the idea of record cards. This can help personalize things and possibly upsell in the future.
 
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