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Old 07-25-2005, 04:54 AM   #1 (permalink)
 
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Hey all-

I am curious to know the best way to increase our prices.

We bought a salon that has been run into the ground, all the bulbs have been maxed and are some are up to three years old! The acrylics are shot and the equipment is aged and needs to be cleaned and tightened.

We have changed the bulbs and acrylics on three of our ten beds and suffered from STICKER SHOCK!!

I have talked to other salons in the area and we are the cheapest, also the clients have stated that too! Ugh.

I do not want to be the discount tanning salon. We are making the nec. changes and want our clients to get the best results possible. Some have noticed the changes already and are happy with us so far.

We are about .50 to $1.50 cheaper on our reg. beds than the others, and about the same difference for our upgrades too.

I want to bring our reg. beds up .50 from $4.50 to $5.00 a session and increase the others by .50 also.

Would you put a note up 'warning' your clients with an effective date and simple explaination or would you just increase them and say nothing until they approach you?

What about timing? Would you do it now during slow season or just before busy season?

I am very nervous about this, but know it needs to be done to cover the 'clean up' that needs to be done along with the image make-over we need.

Any thoughts would be greatly appreciated.
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Old 07-25-2005, 06:29 AM   #2 (permalink)
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I always do something new Jan. 1st...
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Old 07-25-2005, 08:25 AM   #3 (permalink)
 
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We honestly changed our prices a couple of times in the last couple of years without any notice to our clients and NO ONE noticed. I was concerned as well but I was surprised that only 1 or 2 clients mentioned anything. When I explained to them the increase in overhead (mainly electricity costs) they were very understanding.
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Old 07-25-2005, 08:35 AM   #4 (permalink)
 
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i would post it at your front counter about a month in advance. also explain that to keep your salon #1 we will be increasing our prices accordingly.
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Old 07-25-2005, 01:55 PM   #5 (permalink)
 
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"I have talked to other salons in the area and we are the cheapest, also the clients have stated that too! Ugh."

Why is this an "ugh"?

When you think of BMW you think "performance". Think of Volvo, you think of "safety". Think of Honda and you think "workhorse". Think of Kia and you think "inexpensive". What successful brands know is that you can only be ONE thing to your customers and then they work tirelessly to get that one message across. This doesn't mean that BMW can't run a sale and become less inexpensive, or that Honda can't offer a performance car like the S2000, but one Honda won't compete against a fleet of Beemers, and one BMW "sale" won't compete against Kia.

So you get to decide... do you want to be:

The most convenient
The best customer service
The best value
The best equipment
The best results/guarantee
The best marketing

and so on.

In the past, according to the comment above, consumers saw your salon as the BEST VALUE. When you raise prices you DECREASE the value of your salon and when you lower prices or keep them low you INCREASE the value of your salon to them.

Are you not making money? Or are you looking to recover the costs of refitting your business and pass these costs along to your customers?
"Would you put a note up 'warning' your clients with an effective date and simple explaination or would you just increase them and say nothing until they approach you?"

In any event, when you decrease the value of your business to customers, you had better be prepared to convince them that some other type of value exists and is included. Sounds like you're nervous and concerned about doing that. But you must do a better job and take it many steps further...make sure each and every customer knows WHY you are raising prices and that this is in their best interest. The best form of communication is in person. Personally communicate your message to each and every one.

Otherwise, your concern that you'll lose customers will be justified.

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Old 07-26-2005, 11:28 PM   #6 (permalink)
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I would put a notice up and explain that due to new ownership and quality upgrades prices will be increases effective whatever date. If its only a .50 increase your clients probably won't mind if you still offer the services thay are used to. I actually lowered our prices this summer due to our remodel, but will be upping them again in 2 weeks when its all complete and posted a sign at the desk to inform clients of the new prices and when they will take effect. People will be willing to pay more for a quality tan. If they ae using a bed with with bad bulbs they are going to notice the lack of results and go somewhere else, but if you inform them of changes prior and let them know why, once they see results they will be fine with the changes.
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Old 07-27-2005, 02:21 AM   #7 (permalink)
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Tell them if they don't notice a difference you'll give them the difference back.
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Old 07-28-2005, 02:27 PM   #8 (permalink)
 
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We have change prices twice in 5 years since our starting rate and we don't post anything. We have not had any complaints and we raised our prices $2.50 each time. We have had a hand full ask did we increase and that is when we proceed to tell them why. They all seem to be happy and we have never had someone walk out over the increase that month. If it is only 50 cents, what is that....extra spare change!
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Old 07-30-2005, 11:06 AM   #9 (permalink)
 
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I wouldn't post a notice. If it is a small change like this most people won't notice. Posting a notice will invite comments. Have a good answer ready for those who will say something. Keep making those improvements, shout about the improvements !!! I am amazed how many people just give me a $20 bill and don't even notice the change I give them back. Then there are always those who have the exact change ready.
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Old 08-09-2005, 01:29 PM   #10 (permalink)
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Do not post your price increase. You are opening yourself up to complaints. Just very simply set your date and prices and post them when the date arrives. As with any sales you have to be prepared to explain the value of your services. For instance, if you sell 10 sessions for say $50 and the previous owner was selling 10 for $25, well now you can explain to the customers they will no longer need 20 tans to see results. They will be able to see much better results in less time therefore in the end they save money. Don't trash talk the previous owner just explain that your maintenance schedule is different then theirs and you believe in changing out lamps before the customers notices any loss of results.

Best of Luck to You!!
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