Today, we’re going to discuss a sensitive topic — how to adjust your prices.
For such an important topic, there simply is not enough advice out there for ambitious entrepreneurs. After all, there’s no official spa business handbook!
Wherever you are in your journey, pricing is a delicate balancing act. When you find the right price point, your business will:
- Become more lucrative
- Grow a small, reliable team
- Attract new clients
- Retain loyal clients who value your work
If that seems like a tall order, don’t worry. In this blog post, I’m sharing actionable, practical advice on why, when, and how to raise your prices. This doesn’t need to be scary. In fact, doing so can be a valuable medspa lead generation tool.
Your business evolves. Why shouldn’t your prices?
Remember when you first opened your doors? You were ambitious, hungry, and grateful for every single customer. So you invited anyone and everyone into your practice.
There’s nothing wrong with that. It’s what you had to do to grow your customer base and get your name out there.
Then, you got a little more established. You put spa business development first. You saw your business grow, and you gained patients who were willing to spend a little more. But you never actually took advantage of that by raising your prices.
Before you know it, seven years have gone by. You haven’t raised your prices, yet your operating costs have doubled.
As an early-stage entrepreneur, the focus is on medspa lead generation. And having as many customers as possible means cheap prices. As you grow, you must raise those prices to reach your goals. That could mean adjusting prices multiple times, until you find the ideal rate.
I truly believe you should introduce a gentle price increase every single year. For new services, consider adjusting your prices multiple times in a year.
Eventually, you’ll find a sweet spot. This is a price that brings you high demand and profit margins. Typically, it will be a slightly higher price than your competitors — I’ll explain why in a moment.
I know, raising prices can be scary!
Do you freeze up when you think about raising your prices? Are you dreading the pushback — not just from your clients, but also your staff, who are worried about their ability to sell? Maybe your own mind is even holding you back because you have imposter syndrome about deserving those high ticket prices.
High-ticket pricing for medspa lead generation
High ticket branding — and pricing — is a must if you’re serious about your business. It will help you reach your income goals. It will increase the value and quality of your services. And it will help you build a small, reliable team.
Why? High ticket pricing means high paying clients. High paying clients seek out high priced providers — they are happy to pay your prices. They’re looking for the best results, and believe they know who’s the best from how they charge.
Imagine boosting someone’s self esteem and transforming them into a person they never dreamed they’d become. That’s the kind of powerful work you are doing. That’s true spa business development.
What is that worth? A few hundred dollars? Or tens, even hundreds, of thousands?
When you raise your prices, you can serve fewer clients at a higher quality. You’re providing world class experiences, because you have the profit margins to do so. You can employ a smaller, higher quality team because you will have fewer cancellations, and a steadier patient flow. Eventually, you won’t even need to generate leads for your medspa. Valuable clients will come to you!
How you’ll know it’s time
Raising your prices is a must. Let’s add that to the KLC spa business handbook! But how will you know when it’s time? Here are three easy indicators to watch out for.
1. You can’t remember the last time you did
If you’re like the rest of us, you’ve noticed you’re paying significantly more on daily purchases lately. Costs have risen at the gas pump, for your latte, and for flights out of town. The same factors that cause these companies to raise their prices apply to you, too.
Thanks to the Great Resignation, staffing costs are 20% higher across the board than pre-pandemic. Material costs have increased too, as supply chain issues disrupt normal processes.
Have you noticed the cost of your neurotoxins creeping up? Inflation is happening, whether we like it or not. It’s up to you as CEO to make decisions that protect the lifeblood of your business — its profits.
2. You find yourself resenting how little patients pay
Often, this happens often when we ‘grandfather’ a patient in on their pricing, then take too long to raise prices. Deep down, we know that the costs and effort it takes to deliver great service outweighs what the patient is paying.
If you are starting to feel these subtle nudges of resentment, it might be time to raise your prices.
3. You’re attracting a clientele you don’t enjoy working with
Are you seeing patients who don’t quite appreciate the value of being your patient? Are patients nagging you for discounts, or balking at more comprehensive treatment plans?
This is a good sign that your pricing might be out of alignment with the value you’re truly offering. High-ticket clients are looking for that value — they’re actively seeking it out.
How to raise prices gently and reasonably
Maybe you understand what I’m getting at, but you’re still scared. What if you lose some of the clients whose business makes up your livelihood?
- Don’t have the emotional energy to deal with disgruntled patients
- Are worried patients will leave for a lower priced provider
- Are scared to position yourself higher because you’re not sure you’re worth it
If these thoughts have crossed your mind, this next section is for you.
I’ll start by asking you this question. If a patient was going to leave you for a lower priced provider, what does that say about the patient?
Was your client happy to leave over a slight increase in fees? Then they’re not as loyal as you thought they were. You don’t need that in your life!
Instead, think of the time spent with those departed clients as an hour to level-up your business with.
An hour to spend with a client who trusts you, values your expertise, and brings positive energy to your treatment room. An hour to walk on the beach, grab lunch with a girlfriend, or think, plan, and dream about your business’s future.
Now, on to the tactics. Here’s how to raise your prices.
- Examine your most valuable buyers and focus on the services they want. Remember, 20% of your offers are responsible for 80% of your results. Many times business owners look at their lowest prices and raise those first. But you’ll see the greatest impact by starting with your most lucrative offers.
- Evaluate your margins on that 20% of your services. Consider cost of goods, employee payroll, and consumable fees. Don’t tolerate anything less than a 30% margin. Trust me — there are a lot of hidden costs baked into every treatment.
I recently did this exercise with a client who believed she had a 50%+ profit margin on Intense Pulsed Light (IPL) treatments. Under my coaching, she factored in marketing, ancillary staff, ultrasound gel, gauzes, dry cleaning, post care topical products, and room cost.
This exercise revealed her margins were actually 28% — she was only pocketing $56 per treatment! This is why profit margins are critical and why high-ticket prices are your key to wealth.
How do I break the news to my customers?
This is where all your fears might come into play — the moment of truth. But don’t worry. Here are a few great ways to approach implementing those price raises.
- Never apologize for your price increase. Does Restoration Hardware apologize for offering a higher quality leather sofa? Absolutely not —they are proud to be known for their exquisite products. You should be, too.
- Use your price increase as a medspa offer conversion or lead generation tool. Letting potential clients know that your prices are about to go up can help get them in the door faster, so they can take advantage of your current rates before the increase.
- Don’t worry about what your clients can and can’t afford. Offering a high ticket service is a sign of respect for your customer. You believe they are worthy of the very best. What’s more, you are willing to invest in the training, staff, products, and innovation you need to provide it.
Remember, customers are investing in personal transformation. Looking and feeling their best is important to them. Why wouldn’t they be ready to pay what they need to?
It’s up to you to prepare your business in a way that affords them this privilege.
Priced to grow
Your services are life-changing. Price them that way, and watch your business thrive.
I specialize in helping you build the confidence to get there. If you’re curious about working together, I invite you to join my community of fearless entrepreneurs.
Start with my podcast, The Fierce Factor. Every week, I share honest, personal stories and wisdom. Lessons I’ve gained from my years as an aesthetician and climbing the ladder in the corporate world. Tune in today.