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BUSINESS TIPS

To increase or not to increase?

Photo by Christiann Koepke on

Spa consultant Marisa Dimitriadis delves into the subtle art of increasing your prices was asked the following question a few days ago by a business owner in our industry: “How do we increase our prices gently so that we don’t lose clients?” This is a strange question to me because I don’t see this issue how most of you probably see it, in that you don’t really want to increase prices and you are afraid to lose clients over it. Let’s take a step back and first look at all the reasons when a price increase needs to be considered. Then I will give you some ideas on the ‘how to’ part. When should you consider putting up your prices? 1. If you are fully booked and need to find a way to manage demand. 2. When you want to change the services demand to higher spend services. 3. If you are introducing more advanced therapies or services that require a higher level of certification or qualification from the practitioner. 4. If you are in an inflationary market and don’t increase your prices, your margins will reduce.

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5. When your suppliers pass on a price increase. 6. You don’t have enough cash to drive growth and scale. Below are various ways to increase prices.

Competitor analysis

Firstly, do a thorough competitor analysis as better decisions are made with more information. I recommend you include the following information in your competitor analysis. TREATMENT

BRAND

TX COST

SELLING PRICE

YOUR SPA PRICE

MARK UP

SALON/ SPA A

SALON/ SPA B

SALON/ SPA C

0

0

0

#DIV/0!

0

0

0

0 0 0 0

0 0 0 0

0 0 0 0

#DIV/0! #DIV/0! #DIV/0! #DIV/0!

0

0

0

0 0 0

0 0 0

0 0 0

Use at least three different salons/ spas for comparison, two of which are considered as your direct competition (i.e. meaning of similar size and nature to your business), and one that is a similar business in another area (i.e. not in close proximity to you). Before you even compare pricing with another

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Professional Beauty SA June 2021  

The leading magazine for the professional beauty industry for Africa and beyond

Professional Beauty SA June 2021  

The leading magazine for the professional beauty industry for Africa and beyond

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