I mailed out letters to my clients, advising them that I was raising my prices. But offered them an opportunity to defer the price increase if they either came in in the next 30 days or if they sent me some referrals, I would defer their price increase for a specific length of time, depending on the number of referrals I recieved. I also offered a cash incentive.

I got a call on my voice mail this morning from a very good client who I also considered a friend. She told me that she was very offended by my letter, she's never questioned my pricing in the past, her husband was also offended by the letter. She told me she was also very offended that I solicited her for clients after all the years she has come to me. She told me I  have lost her as a client and she cancelled her next appointment.

I did call and leave a message on her machine apoligizing, and saying that I definately did not intend to offend her, and that I respected her as a friend and a client. I also said that if there was any way at all to rectify this situation, to please let me know.

This client and I shared a lot in common with us both having special needs children, and we've been through alot together.  Announcing my price increase isn't something new...I usually put up a sign in the salon, but this time I thought I'd make it more personal, and try to build my business at the same time.

I was upset all day over this and it sure is hard to be smiley all day on a busy Saturday whe you're just going over and over in your head what you could have done wrong.

Any suggestions how to apoligize?

She lost a hairstylist as well as a friend, it's called hubris. You probably didn't really need her as a friend anyway, she's obviously a confused person.

Forget her and move on.

Well, I've certainly gotten many opinions. I'll have to see what happens. I guess my intention really was to say hey, in three months i'm raising your prices (because most people would be in w/in the 30 days) but if you're not a regular, meaning you come twice a year or so, your prices are going up today.

Or something like that. Live and learn I guess.  I had a referral contest once that offered $100 to the person who referred me the most clients...that went very well. Trying something different may not have been the way to go.

I'll let you know. I'll be in the salon tomorrow, so I'll get to see if there are any voicemail messages.

Trey, do you have any hobbies outside of hair like tennis or golf or even eating ice cream, or drinking coffee? I think next time you ponder what to say to clients it might be wise to insert your hobby words into the statement and pretend they are being said/offered to you by the place/person you spend time and money with for your hobby. You said that what you wanted to say was " in three months i'm raising your prices (because most people would be in w/in the 30 days) but if you're not a regular, meaning you come twice a year or so, your prices are going up today". First off I don't even think that is completely legal. Hairstylist may get away with it because no service, or head of hair, is identical etc, however charging different prices for the same item in the same store is illegal in other types of merchandising. Now lets say your hobby center or store sent a notice out saying that if you get someone else to purchase, your prices will not go up. That means others who enjoy what you do may be getting a better deal because they may have brought more people. Do you think you may look for another place that offers your hobby? Especially if there are several choices around? The key word in what you said above that triggered my reply was "your". If I were your client I would hear: You are raising MY prices unless I do something for YOU. What would my reaction be? I pay you, but that is not enough, so now I am being extorted from.  How many salons are within the radius of my home or office that yours is in? Even if they are more costly now, they soon will not be, I think I shall give them a try. After all it seems new clients are appreciated more to stylists so to them I would be new, maybe they would do something extra for me instead of penalizing me for not bringing in new clients.

Don't get me wrong it is great to get new clients and make offers to help get referrals. But (and I hate using the word never) however here it is; never threaten a client and try not to think of it as being directed at them in particular as in "your" price increase (you alone are singled out for not doing something, YIKES!) The client owes you nothing but payment for the service. Make a paying customer feel penalized and they will disappear. (Sure hairstylists get clients to do extra things but they don't owe it, these things are a trade off. Hairstylists make clients feel they are getting something extra too, successful hairstylists make clients feel appreciated and special and that they are getting special treatment. Something extra is why they choose a particular stylist.) I wrote this because when you used the words "raising your prices" I realized that there is something about the way the speaker of those words is thinking that needs to be understood by the person who came up with the words.  It is hard to raise prices in the first place. With people who only come twice a year, I don't think it needs an explanation. Prices are going up like they were during the rampant inflation of the 1970s recently. Look at gass and rents or the cost of milk or meats. Someone who is not there for 6 months should almost expect an increase in price. Someone who is there every 30 days can get a verbal warning accompanied by an apologetic explanation of your increased costs having to trickle down to the client. Sales pitches that warn about price increases usually say come in and get it now before the increase. Copy the pros even if they are in a different industry, they study these things constantly. If we are smart we would copy the most successful of them.

http://www.behindthechair.com/displayarticle.aspx?ID=454&ITID=7

check it out~

You said that what you wanted to say was " in three months i'm raising your prices (because most people would be in w/in the 30 days) but if you're not a regular, meaning you come twice a year or so, your prices are going up today". First off I don't even think that is completely legal.

This is completely silly, you may charge as much or as little as you want, there is no legal issue here, it's a service, not merchandise. Regular clients are the backbone of our trade, they should be offered 'preferred pricing', they pay our bills.

Hairstylist may get away with it because no service, or head of hair, is identical etc, however charging different prices for the same item in the same store is illegal in other types of merchandising.

Again, we are not selling items, we are selling services. The drugstore sells soap, toothpaste, dish-liquid, tissues etc. at many different price points, there's nothing illegal about that either, it's called merchandising.

If you'll look at the board's archives, you'll see that I advocated against posting price increases many years ago. My point was precisely what the above link describes...that is...what other business tells the patrons months in advance that the prices will increase? None that I could think of. Does the restaurant business? No...The Dept. store? No...The gas station? DUH!

It's a lame practice which only annoys the clients. The best way to handle it is to post the new prices but allow the regular clients to pay the old prices for one, two or even three appointments if they are monthly regulars...This way they are already feeling badly for taking advantage of you by the time the increase goes into effect for them.

Hi Brit; No, there is no legal issue at all, and it would be extremely silly for anyone to go there. What we are really talking about is avoiding antagonizing customers. This mention of a price differential had more to do with a percentage increase charged to one individual and not another. It is the percentage increase that would have the differential, and therefore be applicable to all service if so desired. Super markets utilizing discount cards do the same thing, but they offer cards to anyone without discrimination. Although price clubs such as Costco may have different percentages depending on the type of card used (business or personal, each representing different quantity purchases). Dynamic or flexible pricing is being used all over the internet. The greater problem arises when customers who are used to the idea, in the brick and mortar world, of the same item, in the same store (location), at the same time, being the same price no matter whether it is located on isle 2 or 6. Now remember we are not talking about something customized we are talking about a percentage increase, something that can be applied across the board. Customers have been aware that if they found a price difference on the same item in a store in different isles that something is wrong for a long time now. They know they can get the lower price and technically if it were challenged, in the brick and mortar store, they would find such price differentials are generally considered unjust. That does not make discount cards illegal, or price breaks for joining health clubs in groups, or dynamic (flexible) internet pricing, and certainly not something as customized as hair service. What it does do is reinforce customer's beliefs that they should be treated fairly, hence possibly increasing an emotionally antagonized response when they feel they have been treated unfairly. Of course we will never hear them complain that they got it cheaper than the next guy or got to good a deal. Nor will we see a total end to chiseling down an electronics, or car salesman in the brick and mortar world. In fact dynamic internet pricing may cause the reverse at some point in the future, who knows? Still what we are talking about is avoiding antagonizing customers, by using a differential in a percentage increases on services. They know what they were charged last (although I agree their hair could change and so could the service) and they know that there may be a differential because they sent no referrals, (rather than thinking they received a difference in service, because of their hair. Unfortunately they also know that they can only avoid it for so long even if they manage to send referrals.) Consumers can get annoyed with price differentials and become vocal, look what happened when Amazon.com tried their last dynamic price scheme as a marketing test to see what price point an item should have. It wasn't pretty for their reputation but being Amazon they will recover or barley feel it at all.

All of this has left me very curious as to how many, or whether more, cancellations or no shows eventually occur. Whether Trey fairs well or not there is something to learn from it and whether or not intentional it is a very interesting test. Even if it shows nothing at all, it leads to other questions: Of those who charge for no shows, on the next appointment how many simply never come back at all? And how would one collect in such an instance? It sounds like something explainable in the case of a touch up that has grown out to much, but what about the person who only comes 3-4 times a year for a cut? If they chose to skip a cut and go longer, forgetting to call and cancel, wouldn't it jeopardize their return? Either way how would one charge them for a missed appointment 3 months prior gracefully?

I understand how this could work for a booth renter (or savvy receptionist) who speaks to clients when making appointments. They can give a warning or make a comment that they will not charge for the missed appointment 3 months ago but need to know for certain (reinforcing keeping the new appointment) that the client will show up for the one being made. (Or the stylist can choose not to make an appointment for them, or test them to see if they can collect on the missed appointment.) However, in say a 2000 SF salon with many stylists, signs charging for missed appointments could lead to those who inadvertently missed an appointment going to other salons. There is no way to really know how many clients take that route, rather than being confronted or charged for a missed appointment. Every salon, case and client is different and what works in some environments will not necessarily work in others. Whether someone has 12 chairs to fill, and 20 salons within 1 mile as opposed to being a booth renter around 20 salons, or being the only game in town, policies should reflect that. They also should reflect talent and reputation as well as the differences between ICs and employees. Different things work for different situations.

Brit, I think your way of handling price increases above is a good one. It keeps the client feeling special, and eventually makes them want to pay the increased price. Plus it acts as a warning because it isn't implemented right away and leaves room for what ever mood you are in with a given client.

Well, it's been a couple weeks since I sent out my letters, and honestly, I've gotten good response, other than that one client.

People said that they liked my letter, and appreciated the chance to lock in their prices. I've even gotten a couple referrals.

So, I guess I had a bad apple in the bunch so to speak. But over the next few months, we'll see if there is anybody that just doesn't come back.

britboy...paleeeeessseee....we all have to raise our prices every so often. It's not even rational for you to suggest not to.

Seeing as it's been nearly six months, I certainly wont' bother with her now, I especially wouldn't grovel. I'm over her, she's been replaced. It's like she never existed.

Other than losing this one client, I sent out this letter and increased my income by 10%, so I don't see where I made any mistake, much less a HUGE one.

As I posted earlier, I got good response from my clients (bar this one) and even got some referrals, so I'm glad I sent the letter.

Thanks to everyone for their input.