Finding out how to price your spa services can be a daunting task. You don’t want to price too high that the guests in your demographic won’t be able to afford your services, but you also don’t want to price too low that you’re losing out on profit and selling your business short. Our team is sharing some best tips on how to find the perfect prices for your business.
The first thing you should do when solidifying how to price your spa services is ask yourself a few questions about your guests, demographics, and costs. Here are some important questions to consider:
Though you are different than other spas and might offer different services, it can be helpful to look around and see what places near you charge. This will help you get a better understanding of what clients in your area are willing to pay.
Not every spa offers the same services or pays the same amount for products, therefore, you do not need to charge the exact same as your competitors. Looking at other spas can give you an idea of the range you should fall into, and then adjust your final price based on key differences that make your spa stand out. Plus, doing this can also help you see what services are currently most popular. It’s a versatile strategy to figure out exactly how to price your spa services.
Since comparing to other businesses only gives you a general idea about what clients are willing to pay and what services are popular, it is important to find your spas’ exact cost per hour.
To find your cost per hour:
1. Add all the variable and fixed costs per month (excluding retail product cost).
2. Divide that number by the total number of service hours sold per month. This is your cost per hour for one month.
3. Add your desired profit margin.
You should be charging based on what you are worth and what your spa offers. You put in a lot of work and money to get to where you are today so charge accordingly for your business.
Most loyal clients want the best of the best and are willing to pay more for a great service. If you have a lot of experience in your field of expertise, then we suggest charging on the higher end in comparison to your competitors. With that being said, it is important to then share your experience level and story openly on your website, emails and social media so guests can learn and understand why you are priced accordingly.
Raising your prices can be scary but necessary in today’s economy and as your spa grows. Here are some ways to ensure your clients keep coming back even after prices are raised:
Regular clients will be “sticker shocked” and sometimes upset if they come in for their normal service and see the price was raised when checking out. Update your website right away with the price change so anyone who books can see the adjustment. We also suggest sending out a softly worded email to loyal, high returning guests only, that shares this new increase.
In your morning huddles, discuss price changes with your team and how they should answer questions clients may have about the changes. All clients should receive the same answer to limit any confusion or frustration.
There should not ever be a drastic change in prices if they are raised continually. This will ease clients into the increase each time and they will learn to expect price elasticity.
Timing and reasoning mean everything when raising prices. Here are a few scenarios when you might be inclined to raise your prices:
Your staff might be working extremely hard, and you believe they deserve more. We agree, they normally do! Your team will be incredibly grateful for the new incentive you offer them, and it will motivate them to improve their performance.
One of the most crucial factors in being a business owner is to value what you and your team are worth. You may have started out by pricing your services lower than they are worth. As you grow and learn more about pricing it is completely reasonable to increase your pricing so they best match what you and your services are worth.
Products are constantly increasing in price. You will lose profit if you do not increase the price of your services whenever the products increase.
Maintaining authenticity is paramount when setting prices for your spa services. Ground your pricing in the unique qualities that define your brand, whether it’s a commitment to premium ingredients or a focus on a luxurious and exclusive experience. Ensure that your pricing reflects the value clients receive and covers operational costs associated with maintaining your brand standards. Tailor your pricing to the expectations of your target clientele, whether they seek a high-end, indulgent experience or a more budget-friendly option. Regularly reassess your pricing strategy to stay attuned to industry changes and evolving consumer preferences, ensuring that your prices not only support your business but also align with your brand’s identity, fostering lasting customer satisfaction.
Stick to what feels true to you. By following these tips you will land on a price for your services that best fits your company.
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