All about the price increases

PHAB is the brainchild of industry expert Nergish Wadia-Austin. With 30 years experience in the hair and beauty industries, Nergish is a true expert in everything these professional industries stand for.

Throughout her years of experience, Nergish realised that something was missing − an industry standard that stood for excellent practice in hairdressing and beauty therapy. After much time spent researching and developing, PHAB was born. Now, Nergish feels satisfied that the void in recognising hair and beauty salons and individuals for their excellence in everything they do has been filled.

When it comes to price increases all businesses should consider the quality of their service, product and procedures BEFORE any price adjustment can take place. Unless there has been a thorough review of these key areas, where considerable improvements have taken place, then only will a price increase go through without a revolt from customers and staff. It is the only way businesses can survive and thrive.

A bi-annual review of the salon price list is healthy. If after this review the business decides that the prices justify an increase, then only should they proceed. The improvements to the service, products and or procedures gives the staff a better understanding of why the price increase has taken place. If the staff feel that the increase is deserved, justifying it to the customers becomes easy.

Another vital area to address is the usage of the services/treatments on offer. If there are services that are not often used their validity should be considered and an action plan put into place to either promote them or replace them with newer more 'in demand' services.

Finally the cost calculations of providing each service/ treatment plays the most vital role in the decision. Here, the profit and loss percentages of the business form the guide for the cost breakdown of each treatment/service. Making sure that the level of profit generated from each service makes it worthwhile.

This costing exercise should have taken place when the business was first set up in order to attract their target market. At this time an 'in salon' base hourly rate and a travel supplement rate should have also been worked out to accommodate any special requests or bespoke services that may not appear on the price list.

All staff must be aware of these rates thereby ensuring that every employee in the business is able to offer bespoke services without having to consult the manager each time. Once the prices have been re-set, training the team on how best to handle customer enquiries when the price increase is noticed, should include the improvements and changes/ upgrades to service, products and procedures.

Discounting prices is a complicated and involved process which includes the business' marketing and promotional plans. Ad hoc panic discounting is inconsistent and detrimental to a business.

Announcing the promotion of a staff member via a congratulatory letter on display so all customers can be informed of their happy news is a great way of starting the conversation of their price increase on a positive note. A word of warning: To simply increase prices or promoting staff without a thorough review of the quality of service, product and procedure is a sure way of failing a business. A great way to assess if a price increase is justifiable is to ask what has changed and improved to warrant the increase.

It is difficult to measure if a staff member's service standards are up to scratch before promoting them to the next level. A great management tool designed by the PHAB Standard is their online exams to evaluate exactly that aspect easily, cost effectively and with instant results. You can access them at www.phabstandard.com Use them to ensure that you have promoted the right team member for the right reasons. You can even frame their results sheets for their customers to marvel at.

Remember, if you have to apologise for your price increase it should never have taken place!