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How to Raise Prices in a Salon in 2022

As inflation increases more and more as the year goes on, you might find your costs going up consistently with no way to offset them.  To try and keep your business healthy and your costs manageable as prices everywhere around you rise, you’re probably starting to look into your last resort: raising service prices for your customers. 

Table of Contents

  • Why are Salons Raising Prices? 
  • Why You Should Raise Your Salon’s Prices
  • How to Balance Your Salon’s ROI
  • How to Save Money on Waxing Supplies
  • How to Raise Salon Prices
  • How to Retain Customers While Raising Salon Prices
  • Final Thoughts
  • No business owner wants to do this, and it often can seem as if you’ll be putting your business in danger by even doing so. Even if you’re faced with rising costs of operation, it’s possible to lose or anger customers by raising your prices without giving them notice or by informing them the right way. So how do you raise salon prices without losing customers? We’ve got some good tips to keep your business healthy and your customers happy. 

    READ: Working with Different Skin Types

    Why are Salons Raising Prices? 

    If you’ve noticed your business hurting a little due to the high costs of operations or the rising prices of supplies, you're not alone. Due to the continuing effects of the COVID-19 pandemic and current events driving up costs and disrupting supply chains, not to mention huge levels of inflation, small businesses are feeling the strain. 

    Odds are, if you’re a business owner, you’ve noticed these costs cutting into your profits, which can hurt your business if not addressed. Raising prices for customers is often a last resort, however, as they’re afraid of negative reactions or of losing business by doing so. After all, how will higher prices help if you don’t have any customers left? 

    Among other cost-saving strategies, raising service prices is the most straightforward way of keeping your business healthy even amidst high inflation. The key to doing so successfully is all about communicating with your client base. Keeping your customers happy will not only keep them loyal to you, and will let them be more open and understanding of your price adjustments. Plus, having happy customers is the best way to keep your business healthy and running smoothly.

    READ: How to Become an Esthetician: The Ultimate Guide

    Why You Should Raise Your Salon Prices

    Client paying for salon service to her esthetician

    Many salon owners may take issue with discussing money, knowing their worth, and are apprehensive at the idea of raising their prices. 

    The most common reason for raising salon prices is an improvement to your services or your overall client experience. 

    Although most salons in the United States are open for business, your earning potential may be affected due to the limited availability of supplies needed to run operations. There’s also the increased sanitation overhead due to the aftermath of COVID-19. Even if you or your clients have gotten vaccinated, by serving people you are increasing your exposure to the public and thereby potentially risking your health.

    Woman sanitizing her salon business

    Industries worldwide, including the beauty industry, are experiencing shortages in supplies and materials, in addition to the aforementioned high levels of inflation. These shortages and high costs have caused massive drops in production time which have ultimately led to companies running out of inventory, even though product demands are rising. 

    It's for these reasons that coming to terms with any hesitation as soon as possible may be in your best interest in terms of a price rise.

    How Often Should a Salon Raise Prices?

    Your business should increase its rates every 12-18 months to keep up with inflation and service upgrades.
    READ: How to Use Hard Wax Like a Pro: The Complete Guide

    How to Balance Your Salon’s ROI

    Before we get into the different strategies to raise your salon’s prices, and the ways to adjust the prices of each service, let’s discuss first the best ways to save on supply and service costs. After all, if you’re spending money on overpriced or unneeded products or supplies, you might be able to avoid raising your prices in the first place. 

    The best way to assess the health of your business and how much money you’re spending and bringing in is by taking a look at your business’ ROI. If you’re not sure what ROI is, this term stands for ‘Return on Investment’. Essentially, this is the best way to determine where your business is making and losing money. 

    To calculate your business’ ROI, you’ll want to divide your profits by your full investment to figure out how much you’ll need to price services, and how much to spend on supplies, infrastructure, and other investments for your operation. 

    Having a healthy ROI is imperative to keeping your business successful and costs under control. It’s also a good way to determine whether or not you need to adjust your service prices to offset supply and operation costs. 

    If you think you might need to raise your prices, first take a look at your ROI to determine if you’re spending too much in a particular area. 

    READ: How to Calculate ROI for Your Waxing Services

    How to Save Money on Waxing Supplies

    When determining how to save money on business expenses, the first thing you’ll need to look at is how much you’re spending on waxing supplies. If you’re buying multiple different kinds of formulas, assess how much of each formula you actually use and whether all are worth keeping in your repertoire. If you carry a lot of different specialty formulas but only use them for one or two clients now and then (and have alternate formulas available), you might want to consider phasing them out. 

    You should also always ensure that you’re buying supplies from a company that offers the best possible pricing for the quality of formulas that you’re receiving. If you’re not totally happy with the waxes you use, or have compared your current supplier’s prices to other comparable companies and find that you’re spending a lot more on your supplies than you thought, it’s time to compare and contrast formulas to see if you should make a switch. 

    READ: Waxing and Dry Skin

    How to Save on Wholesale Waxing Supplies

    On top of discontinuing formulas not used in your salon enough and looking into making the switch to a new, professional wax brand with reasonable prices, you should also look into saving on the formulas you do use and love. 

    Many salons buy retail-sized bags of specialty formulas that aren’t their go-to’s, but that are used enough for clients with sensitive or breakout-prone skin that they still need to have them in their product lineup. 

    However, buying retail not only leaves you reordering often and spending unneeded money on shipping costs and small quantities, but is also more expensive at its baseline price. 

    A good way to save money on formulas that you’ll need on hand (no matter the quantity of wax you go through daily), is by buying wax in wholesale quantities. This lets you take advantage of lower bulk prices, and lets you save money on shipping costs by allowing you to order less often and stock up on items. 

    In addition to allowing you to save on having to order so often, stocking up on wholesale or bulk quantities of wax also allows you to avoid continually rising prices across the entire industry. 

    READ: The Complete Bikini/Brazilian Wax Guide

    How to Raise Salon Prices

    If you’ve looked into the prices of your formulas, your current product lineup, and your operational costs and haven’t found any avenue to save money in, you might be feeling a little stuck - and understandably so. When you have no other avenue of saving money to keep the health of your business, you have no choice but to raise your prices - even if you don’t want to. 

    So how do you determine how and how much to raise prices themselves (before creating a timeline to ease your customers into the change)? Let’s go over some tips to make sure your expenses line up with your service prices and profit. 

    The first thing you’ll want to do when assessing how to raise salon prices is to determine the margin you currently have between your costs of each service and the price you’re charging. Then determine how much you’d ideally want the margin to be when taking into account inflation, service demand, and the profits you need to keep your business running smoothly. 

    READ: How to Get Rid of Oily Skin

    Be Strategic with Retail Offerings

    If you sell retail add-ons, like the Starpil Pre & Post Wax Care Bundle, you might want to consider reworking your bundles to subtly raise prices while making more targeting or niche packages for your clients. 

    Starpil Pre and Post Wax Care

    For example, if you previously sold the Pre & Post-Wax Care Bundle with the Ingrown Hair Serum and Brazilian Waxing Mask as an all-encompassing package, consider just selling the bundle on its own at a little higher price than you normally would, and either sell the Serum and the Mask separately or as their own bundle

    Ingrown Hair Serum & Bikini Mask Bundle

    READ: Post-Wax Care: Tips & Best Practices

    How to Upsell Services

    When assessing your services and the products you use, consider how to balance out the costs of doing low-cost services with upselling. For example, if you have a client only booking a $7 knuckle wax, know that if you’re using premium waxes and accessories, you’d probably want to upsell other services you your product costs don’t end up costing you more than the service is worth. Additionally, to offset these low-cost services, consider setting a service minimum before booking a client. 

    Esthetician showing her client the salon price list

    You could arrange a service minimum in multiple ways. One way to do that is to decide what your minimum service quota is and let your clients know. You could also mention that all a la carte services can only be provided when added to other services or booked in threes. 

    READ: Top Bikini Wax Styles for 2022

    Consider Restructuring Pricing Systems

    When looking at your prices, also take into consideration how experienced your estheticians and waxers are, and their current booking volume. If they’re highly experienced and haven’t had pricing for their services that reflects their skill level, this is a good reason to raise prices (inflation or not!). You can also look into separating your estheticians into tiers based on experience level or specialty. 

    You can put your most experienced or specialized estheticians at higher tiers, with higher prices, and have a middle or entry tier for estheticians who aren’t master-level at their craft or who just began their waxing career. 

    Introducing tiers into your salon will allow your customers to be eased into this new pricing structure (and your new pricing in general), while also being shown the value of the esthetician they’re receiving services from. 

    READ: Working with Dry vs. Dehydrated Skin: A Guide for Professionals

    Balance Bookings & Demand

    Your prices should also reflect your current booking volume and the amount of hours you or your estheticians spend taking clients. Many salons still follow COVID-19 guidelines as to how many clients they can take or have in their salon at once, so make sure you’re thinking about how to balance pricing with demand and how many clients are serviced a day. 

    Esthetician calculating salon service pricing

    When looking into raising prices, you always want to keep your customers in mind and to make sure you’re communicating the reasons for raising your prices, and the value they’re receiving for their services. This will not only let you have open communication with your customers but will allow them to appreciate the skill level of your estheticians and of the services you provide. 

    READ: How to Get Smooth Skin: Top Dermatologist Recommendations

    How to Retain Customers While Raising Salon Prices

    In the spirit of discussing how to raise prices while keeping your customers informed as to the entire timeline and process involved, let’s talk about how to communicate price changes with your client base.  

    READ: Best Hard Wax for Easy Hair Removal

    When to Announce Your Price Changes

    You should always try to be as transparent as possible with your clients, so as to not give them an unwelcome surprise when they go to check out. Post a salon price increase notice prominently at your front desk talking about what your new prices will be, and when they’ll go into effect. 

    Have an announcement set up on your website as well for new clients or just for those who may not have noticed at your salon. You should also always make an announcement on your social media accounts regarding the change. 

    Try to put up these announcements at least two weeks prior, so that clients who pre-book have plenty of time to be apprised of the change. If you service clients who receive services that are more spread out, especially for waxing, make sure to also have your estheticians verbally let them know of the change at their appointment before the change. 

    READ: Little Known Tricks for Congested Skin

    How to Retain Customer Loyalty

    As all businesses know, the most important part of having a successful business is having a loyal client base who will stay with you and your waxers through thick and thin. If you have customers that recognize the value of their services and what their waxers or estheticians do for them, they’ll be okay with these changes and will be fine with adapting to these new costs.  

    READ: Brazilian Wax Etiquette: Embarrassing Questions Answered

    Trust Your Customers!

    On top of having a loyal client base who value your estheticians and their services, odds are they’ll be expecting this. Rising inflation is no secret, and they’ve probably heard plenty about the strain small businesses are under to keep up with costs and supplies. 

    Smiling woman at the salon selecting her service from the menu

    If you remain transparent and communicative, they’ll trust you to raise prices as needed, and won’t see it as you trying to be greedy. You have to do what’s best for your business to keep providing them with the services they want, after all!

    What’s important when considering and introducing price changes to your salon is to just do what you need to do. Don’t overthink the reaction your clients might have, and trust them to want your business to be successful and to value your estheticians and what they do for them. As we said prior, they’ll probably be surprised you didn’t raise prices sooner!

    READ: How to Start a Waxing Business in 2022

    Sample Email to Announce Price Increase

    Here is an example of a letter with many vital factors that can be used in your price increase email.   

    Start with your appreciation. 

    Dear (Customer's first name), 

    The past (amount of time) working with you has been beautiful. Thank you so much for choosing me to be your (role). I immensely appreciate you and your business and support. 

    Be Honest with Your Clients 

    Due to an increase in supply cost, we will be raising our prices by 10% beginning on (date).


    Mention how your salon price increase benefits them.

    All salon services will now provide enhanced benefits such as (insert benefits).

    Also, given the current circumstances the health and safety of you as our client and of our staff are of the highest priority. 

     

    At (your salon business). We are committed to providing a clean and safe environment for you. That's why we hold ourselves to the highest standard in sanitation measures for your protection. 

     

    We will also be investing in the most advanced training in (your chosen service) for our team for an even more superior salon experience.

     

     As (your business name) grows, we will be offering a more extensive range of services including (insert) and using new products such as (insert).

     

     Additionally, we will be adding a complimentary 15 minute after service massage for all service bookings over $150.

     

    Thank you again for your continued loyalty, we look forward to seeing you real soon!

     

    Warm regards,

    (Your name here) 

    Final Thoughts

    Raising your salon prices is never an easy decision to make, but it is a necessary one. With rising inflation, supply costs, and to keep up with service demand, you need to do what you have to do to keep your business running smoothly and afloat. 

    When you’re considering raising your prices, you need to take into account your costs and the value of your estheticians, and the work they do. 

    You should also trust your customers to understand how much it takes to run a business and what you need to do to keep providing them with the quality and level of services they expect. Remember, your clients are there for not only their waxes but for you too! They’ll be happy to do what they can to help your business and your employees. 

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