How to Raise Your Salon Prices Without Losing Clients [EP:206]

In this episode, Todd and Jen break down one of the most misunderstood topics in the salon business — price increases. 

Forget the blanket $5 rule or the “just raise 3%” advice you’ve seen floating around. Those outdated approaches are costing salons profit, stressing out owners, and undervaluing high-ticket services.

What's covered:

• Why flat-rate or micro-percentage increases don’t make sense for every service.
• The “technician-to-owner” gap and how it sabotages pricing decisions.
• Why public price increase announcements can hurt more than help.
• How to confidently raise prices without losing your best clients.
• The exact steps Hello Hair used to give nine employees a 15–25% raise, with zero client loss.

Todd and Jen also share real-world scripts, leadership strategies, and client psychology tips to help you increase your pricing strategically, protect your profit margins, and keep the right clients coming back.

If you’ve been hesitant about raising prices or worried about client pushback, this episode will give you the mindset, math, and method to do it the right way.

Key Topics Covered:

00:00 – Intro: Why $5 or 3% increases don’t work
03:50 – The technician-to-owner gap and leadership blind spots
07:40 – Myth #1: The $5 Rule explained (and debunked)
09:55 – Myth #2: The 3% Rule and why it’s too low
12:30 – The hidden cost of announcing price increases publicly
20:00 – What pricing should be based on
26:40 – Education vs. value: what clients care about
27:50 – Hello Hair Pro’s 15–25% raise case study
36:00 – Coaching your team through price changes
39:00 – How to raise prices: step-by-step
46:00 – Standing firm and projecting confidence
47:40 – Client psychology and retention after an increase
49:00 – Closing thoughts and call to action

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Transcript

Episode Transcript – How to Raise Salon Prices (The Right Way)

Opening Take [00:00]

Todd: [00:00:00] All What's up everyone? Happy Monday. Hello, Jennifer.

Jen: Hello.

Todd: Hi. All right, so today we're gonna talk about pricing because we feel like it. And so what? What are you laughing at?

Jen: You just like, 'cause we feel like it.

Todd: Yeah, we feel like it. So no. If you've been told to only raise your prices by $5 across the board, or 3%, you've been given bad advice and we're gonna prove it today.

We want to talk about real numbers, real examples, and. A lot of the reasons that so many salon owners struggle with raising prices at all. So here's the thing, price increases are normal. They literally happen in every industry, but for some reason in the beauty industry, we're out here making social media announcements.

We're apologizing, and then we're wondering why clients react. if you think about that, it doesn't need to be that way because when's the last time you went to a mechanic or your favorite restaurant or a grocery store, and you saw a Facebook post saying, Hey, everyone lettuce went up by 25 cents. Never.

It doesn't [00:01:00] happen. So want to talk about why $5 or 3% price increases don't make sense. Why public announcements are hurting you , and why so many salon owners are scared to raise prices. And then we're gonna get into how to raise prices, to keep your right clients that you wanna serve, and how to boost your profits.

Jen: Love it.

Todd: It's gonna be fun. So before that, we always start with our opening takes. takes.

My opening take is simply that you need to stop waiting around for everything to just happen. We see these posts all the time. Hey, when? When will we see profit? when will we see more clients? Hey, will, when will find us? Those things aren't just gonna magically happen. It's why we're talking about in part pricing today.

Because if you don't work profit into your pricing model, you're not gonna just magically find profit. It's not just gonna [00:02:00] magically appear for some reason in your lease your rent goes down every year. But I

Jen: That'd be amazing.

Todd: Yeah, that would be phenomenal, but. You have to be proactive if you, we live in the information age, so all of the answers are out there. Just be proactive is my opening take and stop sitting around waiting for stuff to happen.

That's probably not gonna happen.

Jen: Mm-hmm.

Todd: I, I don't wanna keep going because it's just gonna get into the

Jen: Yes.

Todd: right?

Jen: Okay.

Todd: of carry. There's a lot of carry over today.

Jen: So mine was. Off like a word. I hear it all the time. Like I'm trying my best. I'm trying, I'm trying. And my question to you is, are you really, like, are you really trying to change things that aren't working in your business or your life or whatever it is? So I guess it's just kind of a ask yourself, like is your trying really.

Gonna get you to your end goal. And that's an honest answer that you have to [00:03:00] come up with because I, I find a lot of times people think trying is just getting up in the morning, getting dressed and getting to work that there's no effort in that at all. That's like expected and that's what you need to do.

So if you're not hitting your goals or your business isn't profitable, or things aren't working well for you, you really need to reevaluate what effort you're putting in and start from there because you are probably the problem. So effort and is your trying efforts really, really getting you to where you need to be?

And it's probably time to reevaluate those things.

Todd: I dig it.

Jen: Thanks.

Todd: The first thing I want to talk about, Jen, and you are probably a perfect person to talk about this, so you're good at hair and then owning a business. So we have this technician to owner gap.

Jen: Mm-hmm.

Todd: What happens is most salon owners start off as stylists, right?

Jen: Yes,

Todd: And then they might be amazing hair, [00:04:00] but they're diving into business ownership and they've not taken a single course. They've not talked to a single coach or mentor. They've not read a single business book, never run a business. They're not business operators.

Jen: correct.

Todd: You are not going to master hair and then have that carry over into business, it's just not gonna happen.

It doesn't. There's no two fields that just magically cross over.

Jen: What I see too is because they've been employees in other businesses, they believe by watching what the owners they worked for and how they operated that just by watching that business run that they can open a business and run it better when just because you've watched somebody run a business from a distance you're still not seeing the full picture, that means nothing, that you can then go open one and run it better.

It [00:05:00] relates exactly. When new stylists come out of school, and we see this all the time, they're just supposed to watch the best stylist, and that means they're gonna learn, which doesn't work. If it doesn't work in that model, I don't see why stylists think if they've watched how a business is run, that they can turn around and run it better.

It's just not gonna work.

Technician-to-Owner Gap & Emotions in Pricing [04:00]

Todd: I've got a couple of quick notes. Running a business and doing hair require two different things, and if you don't understand what I'm talking about when I say that. When you learn hair, you're learning You're learning precision. You're learning how to provide a service. When you learn business, you learn leadership, pricing strategy, profit management, marketing, hiring, people management.

Jen: Mm-hmm.

Todd: Tell me what in hair school carries over to

Jen: None.

Todd: If you don't believe me. Go to the best business school in your area. Grab the top person from their class, [00:06:00] hand them a pair of scissors and a comb. See what happens

Jen: Mm-hmm.

Todd: if you think it's different, it's not. It's not, without that leadership or that business training, bringing it back to pricing decisions that you're making start, like your emotions creep in

Jen: Mm-hmm. Yes.

Todd: So you worry about being,, quote, unquote too expensive. You worry about what's quote unquote fair in this quote unquote economy. You worry about overvaluing things. You worry about things like keeping everyone happy instead of protecting the business. If your clients like coming to you. The biggest disservice you could do to them was to not exist. So if you run out of money and you're closing your salon, which we see quite often,

Jen: Yeah, unfortunately

Todd: Yeah. Unfortunately, we don't wanna see that at all. I don't think people in the industry want to see other people closing. If I'm being honest, I could probably think of one [00:07:00] person, but it's just 'cause they're a jerk. I'm just

Jen: it's always one.

Todd: Everybody's got one, right?

Jen: Yep.

Todd: No, but seriously, we don't wanna see businesses close. And when you, the, the number one reason for businesses closing is they run outta money.

Jen: Yeah.

Todd: you run outta money, how can you service your clients? So if you

Jen: You can't.

Todd: being fair to your clients and what's right in this economy and whatever, the biggest thing is to take care of yourself. It's why when you're on an airplane, they say, put on your freaking mask first and then help other

Jen: Right.

Todd: 'cause if you pass out, there's

Jen: no good.

Todd: be able to do, right. Let's break down these myths. Myth number one is the $5 rule, we'll call it. So $5, gonna raise prices, $5 across the board. You see that fairly often,

Jen: Mm-hmm.

Todd: Okay. $5 on,

Jen: the most popular way to do it.

Todd: Yeah, so this is extreme, but I, I, I'm gonna use this for quick math.

So say someone has a $20 haircut, just say, I know that's super low. $5 on a $20 haircut [00:08:00] is a 25% increase.

We've gone a lot higher on some of our stuff, and we can get into that when we get there, but $5 on a $300 service is 1.6%. That's not even keeping up with inflation. So it's not consistent. It's not fair. It's definitely not strategic. And you're undervaluing your higher ticket services.

Jen: Right,

Todd: placing your lower ticket services in that sort of like shock area for clients where they're like, wow, that's a big jump. I'll hear the argument, know, I'm considering raising them $10 the board. Well, same thing if you have a $20 haircut, $10 is a 50% jump.

Jen: Right.

Todd: That's a massive jump. Again, on a $300 service, you're talking, what is that 3.2% increase? That's not even close. That's getting us into that 3% rule,

Jen: Mm-hmm.

Todd: we're gonna talk about next. [00:09:00] Do you have anything to add to that? That was just, I just want to give examples of why that doesn't make sense.

Jen: No, I think that's perfect and I think, I don't believe most people think about. Percents when they're raising prices. And I don't believe most people understand why you use a certain percent marker. And what I. The industry or whatever, like clienteles, whatever you wanna say can tolerate, I don't think they understand that.

Like there's a tolerance. There's, there's a reason behind why you can use certain percents where you can push things and why. But if you don't understand that, that's where I think people just are like $5 works. But like you're saying, in certain scenarios, if your prices are super low, $5 could still be a shock to somebody where if your prices are higher, $5 might not even be noticeable.

So it, it just, it, it doesn't correlate.

Myth #1: The $5 Across-The-Board Increase [08:00]

Todd: Exactly,

Jen: Yes.

Todd: argument becomes, well, let's use a percent, which I love because that's what you should be [00:10:00] doing. But myth number two, we'll call it, is the 3% rule. Too low. Doesn't, that also doesn't make sense. Let's use a hundred dollars service, for example, just for easy numbers. Say you have a hundred dollars haircut, you increase it 3%, you have $103 haircut. Is that even worth adjusting your booking software?

Jen: Right.

Todd: Because after taxes and stuff and after whatever, right? What are you

Jen: Mm-hmm.

Todd: It's not worth it. I also seen recently a few people arguing that if you go over 3%, going to lose a good amount of your clientele.

Jen: Bad advice, but Okay.

Todd: Who out there is, say you have somebody that you're happy with that provides you a service.

Say you have a massage therapist and it's a hundred dollars for a 60 minute massage they raise [00:11:00] their price to $103, are you leaving? Is it worth it for you to go try to find somebody that's as good?

Jen: You could probably find $3 and quarters in your car. Come on.

Todd: Right? So that argument that, that part of that myth is just, it's just false. It doesn't make sense. It I've also seen people talk about. The sort of 60% booked mark, and they're like, if you are 60% booked and you raise your price, you're gonna lose all your clients there's not a demand. I can tell you from Hello that that is

Jen: Mm-hmm.

Todd: because we've had people at that 60, 65% booked rate that raised their prices. Gained clients.

Jen: Yes, we've seen that even this last time around.

Todd: Yeah. And we're gonna talk about that [00:12:00] too, for sure. So those are the two main ones. So there's this $5 rule that people seem to flock to, and then there's this 3% rule that people sort of flock to. And if you're like, whoa, I don't raise mine 3%, I raise mine 5%. Congratulations. Same thing as what I said before. So instead of your a hundred dollars haircut, it's 105. Now, is that worth it to you, especially going through all the stress that you're putting yourself through that you don't need to go

Jen: Mm-hmm.

Todd: So let's dive into that. Why are people getting stressed out? So they're announcing their price increases, and I know this is never gonna change, and I know that you are looking for your echo chamber on Instagram you're looking for.

You're totally worth it. I know. That some account with a lot of followers told you this was the way to go. Okay? Just like doing hair and running a business, don't cross [00:13:00] over building an Instagram, following and running a business don't cross over either, I'd be careful who you listen to.

Jen: Yes,

Todd: announcing price increases. Price increases are normal. They're not. This is not a special event. I know everyone wants to think it's this big thing that needs to be celebrated. It's just part of running a business. It's actually this really boring part of running a business. It's not that exciting. You don't need a Facebook event about it.

Jen: and you don't.

Todd: need an Instagram post.

Jen: I have such a hard time on these because they generally start with, I've tried to hold off. I'm so sorry I have to do this. When you announce these price increases, how many of your clients actually see this post?

Because I would imagine maybe, let's talk about percent. 1%. So nobody even saw your apologizing post. Of your price increases or way long in cursive that we [00:14:00] can't even, we can't even read it because you tried to do some fun little font to make yourself feel better about it. And then nobody saw it. So when they come in, they don't even have a clue what you're talking about.

Sorry.

Todd: Aggressive Jen.

Jen: I know I get frustrated. I will say this too, and, and maybe you're gonna talk about this, so I'll, I'll keep this short. We use a percent for our price increases. This is on the backside. So Todd and I, as the leaders, we know what percents we're raising prices and then we present it to our staff in just a solid amount.

'cause they don't need to understand percents or get their brain all wrapped up around something that they don't really care about.

Todd: Yeah.

Jen: Okay.

Todd: One of the things that, and everyone's probably gonna argue about this, but one of the things that you are doing is that when you publicly announce something, you're creating pushback from people that weren't gonna notice.

Jen: Yeah.

Todd: That's just a fact.

Jen: [00:15:00] Mm-hmm.

Todd: Here's another point back to the other industries. Name one that announces price increase. How about gas? Let's look at gas. Gas goes up and down constantly. Probably daily, right?

Jen: Mm-hmm.

Todd: Because it's based on the commodity. It's based on the cost of fuel, the cost to deliver the fuel, and the cost to get the fuel into your car. what it's based on. As those costs go up and down, so does the price of gasoline. Never once have I seen like Mobile be like, Hey guys, we really tried to hold off on this man.

Myth #2: The 3% Rule [10:00]

Jen: I think you see companies like Netflix, they'll send an email like, Hey, your next bill is gonna be this.

Todd: I've never gotten an email from Netflix, I don't believe, but I, I believe you. Maybe I've just missed them.

Jen: Yeah.

Todd: it's when you turn it on to use it and it says on your screen, Hey, this is the new price point. You wanna use this or not.

Jen: Yeah.

Todd: That's how they do it because fine, I get that. That's what you would do to your clients too,

Jen: Right.

Todd: say to your clients.

So even if you don't want to surprise [00:16:00] people, which I'm not saying surprise people, but you could say, Hey Sally, your haircut is a hundred dollars today. Next time that you come in, it's gonna be 125,

Jen: Mm-hmm.

Todd: it's gonna be 120, it's gonna be 115, whatever you decide on.

Jen: Right,

Todd: And then the person's gonna go, oh, okay. already thinking about what they're making for dinner. They don't, they don't care. That's not gonna make or break them. So don't project on people. The last point I had on this section was just the more that you make it a big deal, the more it becomes a big

Jen: Correct.

Todd: and you are doing a disservice to your clients.

When you project how much they can afford. You have no clue your client's personal finances, they're not coming in with their profit and loss statements and their bank accounts and stuff. They're not, you have no idea. So it's wild to me to project IUI, I've done it. I've been there with different businesses I start to look at it [00:17:00] and I'm like, wow, I couldn't afford this.

Jen: Right. That's a big one.

Todd: when I had my gym, I did one-on-one training and people are always like, no one's gonna try, no one's gonna pay a hundred dollars for a haircut. They'll do it at home. No, that's not true. I used to charge people $1,600 a month, so every four weeks we're not even talking. Every 12 weeks, we're talking every four weeks they would hand me a check for $1,600. I couldn't afford that. But imagine if I was like, what, it's only 200 today, because I just feel like it's not fair.

Jen: Yeah,

Todd: Do what I mean? It does. It makes no sense.

Jen: I know. I do think a lot of people get in their own way 'cause they live in their own financial world, right? So

Todd: Of

Jen: there's certain price points that hit you differently because you're like, wow, I I, I wouldn't be able to pay this. That's fine. You're, you, you wouldn't be your target clientele. That's totally cool.

Todd: You are not able to pay it is 'cause you're charging $5

Jen: [00:18:00] right,

Todd: the board for your services

Jen: right.

Todd: using an actual percent.

Jen: Yeah.

Todd: That's why. So that's what we're trying to help. We're trying to get people to have a better lifestyle. We're, we're trying to help people make more money.

We're trying to help people. Here's a big one. Create opportunities for other people.

Jen: Yes. We coach our staff all the time. Like, Hey,, we're they, whatever they wanna say, got a promotion. To what Todd said, next time you come in your haircut, let's say it was a hundred, now it's 115. And then I'll always say, this is really, really important. Stop talking, bite your. I don't care. Do not have any more words come out of your mouth, because then there's this like word vomit that happens and, and it's just, you're all over the place.

Everybody will process all your clients differently. Some may celebrate your promotion. Some might be like, wow, that's a lot. It doesn't even mean that they even care. It's just each person's gonna react differently and that's not yours to even worry about you. You gave them the information. They [00:19:00] get to decide what they wanna do with it, but the stop talking is really important.

Todd: That's a huge one because when you start to explain things, you're talking people right out of it and you're talking through their emotions and your emotions and none of this is an emotional thing.

Jen: Right.

Todd: what I said in the beginning. Not nothing. None of these decisions are made emotionally.

Jen: Yeah.

Todd: be.

Stop Public Announcements (and What to Say Instead) [13:00]

You cannot operate a business emotionally. It makes zero sense. It's you're gonna drive yourself insane.

Jen: Yes.

Todd: gonna make profit. You're gonna constantly struggle. You're not gonna sleep at night. You're gonna be up worrying about how,, how much Bill and Ellen can afford to come in. Like it's, and it's not your business.

Jen: Yeah.

Todd: is to create a strong, profitable business. If you have a team, your business is to be responsible to create opportunities for your team and to serve your community, which is the clients that come to see you. So what should pricing be based on? I have a list here.

Jen: Okay.

Todd: your numbers, right? Cost of [00:20:00] goods,

Jen: Mm-hmm.

Todd: stuff goes up. Labor, expenses, and here's a big one, profit margin margin targets. So what is your target profit margin? Is it 20%, 30%? I'll give you a pro tip. It should be somewhere in there. If you're profiting at all, you're doing better than the majority of salons out there. let's look at. Have this chart. Where'd my chart go's here?

Jen: We're holding. We're holding.

Todd: This is based on, data, from a bunch of different places. This is 12 months in the US only. we're talking how many salons are profitable, Jen, in a percentage amount. Do you have a guess?

Jen: I think it's fairly low, to be honest.

Todd: It's 46%.

Jen: Okay.

Todd: 46%. Now, that

Jen: That means more than half. You people [00:21:00] running your business are not profitable. That's crazy.

Todd: Yeah, around 19% break even

Jen: Wow.

Todd: and 35% run outta loss. So if you look at different charts and different things, you'll find different numbers. They're all around the, so I found this one to that 46% to seem a little high to me, think you break that down, the salons that are in there are included in that 46% profitability could be profiting 0.5%.

Jen: Right.

Todd: So you're talking about making,, five grand per year for running,, a million dollar salon.

Jen: That's insane.

I love that you have your old school calculator right next to you.

Todd: I love my old school calculator,

Jen: know.

Todd: but either way. So that's it's, is that worth it for that a level of work? I don't know. You have to ask yourself. Anyways, let's get back to this. So what is pricing based [00:22:00] on demand? Demand is a good one. far you're booked out. Now we talked about it doesn't have to be a hundred percent, which is a lot of people are saying when you have clients banging down your doors, your prices. For us, it's well before they're banging down your doors because you need to leverage that.

Jen: Mm-hmm.

Todd: Definitely that one matters, and it's one that we look at, but we don't look at it in the traditional. You gotta get to 95, a hundred percent.

Jen: No.

Todd: Positioning. Positioning is your skill level, your brand strength, your reputation. I had someone come in the other day and I said, how'd you find us? And they said, I looked online. And I said, cool. How'd you make the choice to come here instead of the other places that likely got recommended to you? they said, I, I saw your reputation. I saw how many stars you had. And I was like, cool, welcome.

I showed them around. I cut their hair. Value is another one. So this isn't necessarily something that is gonna be [00:23:00] easy for you to measure, but what are your client's perception of your services and

Jen: This is huge.

Todd: Because it's how much they buy in. We've all heard this before, something is only worth what somebody is willing to pay for it. For example, people collect Pokemon cards. They go for millions of dollars. I

Jen: Mm-hmm.

Todd: for like $3 million.

Jen: Wow.

Todd: I buy a Pokemon card for even $5? No, because I don't perceive the value in it.

Jen: But someone out there does,

What Pricing Should Be Based On [20:00]

Todd: yeah. Someone out there would buy it for 3

Jen: mm-hmm.

Todd: Now, if I knew it was 3 million selling for five, yeah.

I'm gonna jump on that. But I wanna point out the one thing that. I didn't mention here and I didn't mention it on purpose. You wanna guess what it is? Jen?

Jen: I have no idea.

Todd: Education.

Jen: Oh.

Todd: Your pricing has very, very little to do with education. Education is a prerequisite, not an event to celebrate. Staying up to date [00:24:00] is doing the bare minimum. It's like adjusting your prices only to reflect inflation and then expecting a huge return. And again, so hear me out people when I say education isn't an event to celebrate, what I mean is your clients don't care. They do not care if you don't believe me. When is the last time you went into your dentist and asked them about their ongoing education? Name a time. When's the last time you went to your doctor and you said, Hey Doc, what'd you do this year for education? Do some YouTube videos. Did you watch the busiest person? Did you go to New York to some week?

Jen: Right. And I'm sure there's people that are like, when I talk to my clients, they're super excited. Yes, of course they are, but they're expecting, most clients actually will ask me, what does the state require for you to continue your education, to renew your license?

Todd: nothing.

Jen: think that the state is basically making sure you're doing this.

And I was. Nothing. You just pay a fee and they're [00:25:00] like, oh. It's on you to decide if you want to continue growing your technical skills or stay stagnant, the state does not care.

Todd: Clients mostly don't care. When I had my gym, I never once in, so I owned my gym for a decade, and then I worked at another gym for a couple of years before that. Not once.

Jen: Okay.

Todd: that's an exaggeration. I just don't remember. So we'll say once. It happened in, in 12 years, 13 years. So one time someone asked me if I was certified and what that looked like. And in that industry, you don't even need to be

Jen: I know.

Todd: board.

Jen: Yep.

Todd: is why, which

Jen: Yeah.

Todd: that we're so focused on hair licensing. But that's a different that's

Jen: Different topic.

Todd: yeah. I'm not saying education isn't something you should celebrate with your team. I'm saying your clients don't give an f go to lunch and geek out after a class your team.[00:26:00]

Jen: Post all the pics of you doing that, but

Todd: What?

Jen: post all the pics of you taking your classes. Go for it. That's what social media's for. Have fun.

Todd: Do whatever, but that's not factoring into your pricing. But

Jen: No.

Todd: the feelgood things and keep in mind it's okay to also not post everything on social media.

Jen: Mm-hmm.

Todd: You don't have to, all right, let's talk about Hello. 'cause people are like, if they're listening, there's definitely somebody that's irritated right now and they're like, yeah, right.

Well then what? So let's tell, did I do a good,

Jen: That was good. Yeah.

Todd: So let's use Hello Hair for our case study. We just recently gave eight employees a raise that ranged from 15 to 25% on average. why is that an average? Because we found some stuff that was like a 40% increase on certain services that were maybe dated in the computer.

Maybe they were mistakes,

Jen: [00:27:00] Yeah.

Todd: even client facing. We just were like, whatever, we're gonna rock with it. And we went. 15 to 25%. How many clients have we lost, Jen?

Jen: None that I know of.

Education Isn’t a Pricing Driver [24:00]

Todd: Zero.

Jen: If anything, it's been the busiest two weeks that I've seen in a while. So with new clients, like booking online, which means booking online, which I love because the prices are client facing, so they're booking, knowing what they're coming in for. And happily. So it's, it's been awesome.

Todd: so.

Jen: definitely something to celebrate.

Todd: So fif 15 to 25% raises with a 0% or zero client loss. pretty good. We're not doing anything special as far as like,, buy my strategy or, you

Jen: Nope,

Todd: do

Jen: doing some math.

Todd: Do these six things to get your salon busier. Like there's not this secret formula. The formula is to look at the tolerance like you were talking about earlier, which is around that 15 to [00:28:00] 20% mark Jen

Jen: Mm-hmm.

Todd: pay, and then to understand where you can push the limits because we're not where the point of having a business is to profit. If it wasn't, we wouldn't have a business. That's how our system is set up. And I know people are like, capitalism is awful and I don't do this for the money. Well, good for you. We do this for the money because we need money to solve problems. We have

Jen: Yeah.

Todd: to eat. We do this because we have a team of people that we really care about and we want them to be successful and we want them to have actual careers that pay them. So they're not always stressed out going, I have to move on. I can only make money if I move on. I have to leave here. That's the only way to make money. That's on you as a business owner.

Jen: It was actually really fun doing payroll yesterday and seeing, I, I know personally what each person wants to make weekly. 'cause we talk about it with them all the time. Knowing they weren't, none of them were booked a hundred percent. Let's say they were in the 60 to 70% range, and all of them hit every single number they've been [00:29:00] trying to get to that they felt like they were working really hard and they were just there.

One of them actually talked to me yesterday was like, this is just freaking amazing. Like, and just so excited and we're there to, to actually like lead them too. So some of our staff has, barriers where certain numbers, when they go to say the total, it stresses them out. We talk them through that, just like we're saying to you.

I did it with someone yesterday like, this client's coming in, I think she's not gonna like my new prices. And I'm like, okay, you're projecting. Stop doing that. So here's what we're gonna do. Hey, so-and-so, I got a promotion. When you get this service, this is what it's gonna be. This is what it's gonna be

next time you come in and. I overheard her talking to her client and then later on she was like, she didn't even have a problem with it at all. I'm like, see what you did? You stressed yourself out over something that wasn't even a problem. And how do you feel now? She's like, I'm amazing. Like amazing, like great.

That's how you should feel.

Todd: that's, that's awesome. And that, but that takes leadership and that takes understanding people's emotions and how we're reacting. And [00:30:00] you're almost always wrong when you create a scenario in your

Jen: Yeah.

Todd: almost always wrong. So when you're somebody that's like, if I raise my price $20 on this a hundred dollars haircut you start going through your list in your head, this person's gonna leave.

This person's gonna leave. This person's gonna leave for one. You're wrong. It's, it's almost never gonna work out like that. So you're just stressing yourself for Yeah. Like you said, Jen, no reason

Jen: And some of them may leave, some of them will leave. But what it will do is open you up to new people that that price point is where they wanna be. They see a level of technical skills at that price point. The amount of new haircut clients we've got over the last week or so at all of our new prices, it's almost as if I feel like clients are looking for.

A salon that has a certain price level that shows them that your, your staff is technically skilled. And I, it's just what we're seeing.

Todd: Right and. Maybe if we just posted on Instagram that we did a bunch of education, that it would help. [00:31:00] No, it's not

Jen: Yeah. But we do a bunch of education, as you all know. So it, it,

Todd: and we do post it because it's fun and it's part of our

Jen: yeah.

Todd: but we are not using that as, Hey guys, we took this class and this class and that's why our prices are going up.

Or

Jen: Yeah.

Todd: of our scissors went up or whatever. Like no one, that's the stuff people don't care

Jen: No.

Todd: what problem you're solving for them and the best solution to their

Jen: Mm-hmm.

Todd: People want to be taken care of. People want hospitality. People want to not worry about, said, the education and the technical skill. That's the prerequisite. I don't

Jen: Yeah.

Todd: about if I'm gonna get a good haircut, I assume I'm gonna get a decent haircut anywhere. That's the, that's the cost of just showing up.

Hello Hair Case Study: 15–25% Increase, 0 Client Loss [26:00]

Jen: Yeah.

Todd: It's all the other little stuff. So why are we able to at, Hello or what do we think that we've identified as reasons that we can raise our prices and not really have any concern at all? So one of them is trust. We build trust with our clients. We give them actual [00:32:00] proper consultations. We are collaborative, so we work together. They trust that if something is maybe a little outside of someone's wheelhouse

Jen: Mm-hmm.

Todd: they're not as versed in it, that they can draw from the group

Jen: Right. Just.

Todd: that person is still gonna get just that same level of service. Another thing we do is provide value. It's hospitality, it's greeting people immediately. It's offering a, a beverage, it's taking coats. Showing them around. It's giving people a tour. It's getting them to feel comfortable before they even sit in the chair. You know, I I, I have seen before people have a brand new client.

This person's never been in the salon before, the stylist walks up, says hi, and says, come this way, and turns their back and starts walking towards the sink. What do you do? That's not providing any sort

Jen: No.

Todd: that's not building [00:33:00] trust, that's not getting somebody to feel warm and welcome. That's not hospitality. Another thing that I think that we do is consistency.

Jen: Yes, absolutely. That's huge.

Todd: You know what you're getting and sort of ourselves on consistency. We don't talk about it a lot, but. I feel confident that anybody can go to anybody, and unless it's something that's like a really niche sort of skill, like if somebody's looking for some unicorn hair or something, they're, we have a couple people that

Jen: Mm-hmm.

Todd: in that.

That's who I would tell you to go to. If you're looking for a long, layered haircut, our entire team can deliver that.

Jen: Right? Mm-hmm.

Todd: Our whole team, the other thing that we do is we have confidence in delivery. So, and this is something that you're gonna have to work on. Most people don't have this, and that's okay.

Like I said in the beginning, this is business stuff is a skill. You have to learn how to be confident in your delivery so that you can coach your team to be confident in their delivery. Just like Jen, you said earlier that, [00:34:00] don't know who it was, but I'll find out after who was like, oh, this person's probably gonna have a hard time, blah, blah, blah, blah, blah. If you are confident and you just talk to them,

Jen: Mm-hmm.

Todd: you've done your part.

Jen: Yeah,

Todd: If that person did have a problem, what do we do from there? Do you wanna take it Jen I was kind of setting you up.

Jen: I, like I said earlier, we just talked through it. I, our staff will come to us with, oh.

Todd: no, no, no, no, no. I'm saying if the person didn't want to, if the person said,, $150 is really out of my price range. Great. Let me introduce

Jen: Oh yeah. Yeah. The whole team knows that and they're fine. They understand that the value of that client staying at Hello is the most important thing. And we have team support, so they're happy to fill their team members with the client if it's a price point, better fit. I've seen even at our salon, just even personality fits that are off.

And the staff will come to us and be like, Hey, I just, I'm not vibing with this client at all. So I'm like, okay, who will they vibe with? And they're like, oh, I never thought of that. Like they would be a way better fit for [00:35:00] so-and-so. I'm like, great, next time they're in, that's what you're gonna do. Be like, I just think it'd be a better fit.

Your hair, it just, it'll be better. And they're like, that is so smart. It's not that hard, but it's just having those conversations.

Todd: Agreed.

Jen: Sorry, I missed the setup on that one.

Todd: Get you

Jen: That was good.

Todd: I feel like I'm ranting and I'm like, get Jen in there. Get Jen in there.

Jen: I talk enough. Trust me. It's good. This stuff. This is your wheelhouse. This is what Todd's really good at. I will say too, we did one-on-ones beginning of the year, we pretty much knew who was on course to hit all of these goals that we were setting up to start. Raises, excuse me, for August, we had a list and there was coaching involved in there for some of them.

Retention was conversation. For some of them it was technical, so they understood coming into this year. What education needed to be done and what they needed to show that they could do in order to get the raise that was coming in August. So this isn't something that we were like, oh, you guys are all at it.

You're going right now. They, this was something we talked about in January and [00:36:00] February, and we had, let them know was implementing in August and then laid out a path for each person on how to get there so that they successfully got that raise in August and they looked forward to it. It wasn't like a surprise.

We also knew what numbers were gonna be hard for people to come out of their mouth. So we worked through that from January, February, up through August that when we got there, for the most part, small little things that we had to coach through. Everybody was ready, everybody was excited and couldn't wait.

They were like, give me this raise. We are ready to go. And that, that takes that leadership and understanding what length of time you need to get there. It just kind of saying that, 'cause I think sometimes people think like, oh, you just gave them out. Like no, this was conversations that started at the beginning of the year, working towards getting to August 1st.

Todd: Yeah, for sure. None of none of this is random. That's

Jen: No. Or fast paced or anything.

Why Our Pricing Works (Trust, Value, Consistency, Confidence) [32:00]

Todd: Yeah. What I hope I got across in my opening take was that you need to be proactive with this stuff. 'cause it, that's, that's just, it's what [00:37:00] it takes.

Jen: I think sometimes just people forget there's a process. They're just like, oh, I should be doing this now. Like there's just work that goes on behind the scenes.

Todd: Yeah. And part of what we've done with, or part of what we want to do with Hello Hair Pro, with this podcast, with some mentoring that we do with,, our newsletter with blog posts. They're coming back soon, I promise. Part of the mission for that is us to prove our business model and prove that these strategies that we use work and then share them with everybody because that is what's important to us is to help other people, none of this is to brag or to be like, oh, we're better than other salons. Not at all. Not at all. None of this is for that. I just wanted to use Hello Hair as this case study because it's proof that

Jen: Yes.

Todd: you, when you have good clients that you're targeting, they're your perfect clients. They'll stay when they feel that the service is worth it. When they feel like they're getting hospitality, when they feel like there's a connection to a brand. That's what people stay for and that's what [00:38:00] we're proving.

Jen: Right.

Todd: have people that are pushing and they're reaching like 70, 80, 90, a hundred dollars haircuts

Jen: Mm-hmm.

Todd: people aren't leaving.

We're getting new clients, like Jen said, every week. I mean,

Jen: Yeah.

Todd: we

Jen: Yeah.

Todd: multiple new clients daily, It's not, you're not gonna scare people off with sticker shock as much as you think

Jen: Correct.

Todd: It's just not gonna happen. But

Jen: And es,

Todd: follow these

Jen: if you have a plan. Yeah.

Todd: have to have a plan, and you have to be confident and all

Jen: And you have to understand the math and, and what you can push and, and if you choose to, what that looks like, it's not a guessing game. It's not like, oh, just,, hope and pray. It's not like that. There's so many parts that make it a foundational move that really is stable.

Todd: of doing business. Like I said, every other industry does this. It's, it's just part of

Jen: yeah.

Todd: they don't, they, these people of these major companies are not sitting around stressed about your feelings

Jen: Right.

Todd: your emotions or anything. They do not wanna lose clients either.[00:39:00]

Jen: Nope,

Todd: So obviously a balance.

Let's

Jen: but they also wanna stay in business.

Todd: Of course, they, they have to let's talk about how to raise prices. Let's

Jen: Okay?

Todd: steps. All right. So step number one, I would say audit your numbers. You gotta know your costs.

Jen: Mm-hmm.

Todd: know what profit margin you're after, because if you don't, if you're just like, oh, I wanna make money, but you don't say how much, and we have, you have no clue.

We have no starting point. You have to understand the demand.

Jen: Yes.

Todd: one. So you gotta know your costs, know your profit margins and understand demand. You also have to understand your breakeven point if you don't, you're guessing.

Handling Objections & Team Support [35:00]

Jen: Mm-hmm.

Todd: And that was a huge one. When we first set out with Hello, were hit with COVID. So we sort of were like, what the f? And then after we sat down with our accountant and we were like, let's figure out our exact. Breakeven point per month, per day, hour, however you wanna look at it. I don't care. for [00:40:00] some people maybe it's weekly, it's just easy to look at.

Jen: Yeah.

Todd: people, it might be quarterly.

And if, if,, the, the further you go down the line, the bigger chunk of time you can look at, like we've started looking at quarterly rather than, I'm looking at everything weekly going, do we have enough money to cover this stuff?

Jen: Right.

Todd: Step number two. So number one is your numbers. Two, you gotta choose what you're gonna do as far as your method. How are you gonna increase if

Jen: Mm-hmm.

Todd: the dollar amount? I told you why that doesn't work, the low percent. I told you why that doesn't work. So I would say that percentage base is the most consistent gonna keep you the most consistent across all of your services.

Jen: Agreed.

Todd: What does that look like? Well, it's not 3%. I know I'm harping on that, but it is what it is. would say between 10 and 20% you'll see a meaningful change.

Jen: Mm-hmm.

Todd: You'll see an impact there. Doesn't mean you can't [00:41:00] push up to 25 and sometimes because we do it is what it is. But you have to have a plan for it.

And it goes back to that other stuff. Like if you are going to increase something 25%. Hospitality needs to be there. The way you make the client feels need to be there. The way that you are showing up to work with your hair done and your makeup done, that stuff ready to go, that stuff needs to be there. No one wants you to come in, slap color on their head and then go do your makeup.

Jen: Right.

Todd: Like that's not a thing.

Jen: No.

Todd: From there you're gonna decide on your timing. So how often are you increasing rates? Once a year is pretty good. pretty standard. twice a year can be fine. Totally fine with increasing, would say. I

Jen: [00:42:00] Mm-hmm. Yeah.

Todd: can do it. A couple times, I, I've talked to salons that have increased three or four times in a year and we're gaining clients

Jen: Great.,

Todd: It, it

Jen: great. Yeah. I liked our August 1st. It was like quite fantastic.

Todd: Yeah. It's, yeah, it's a good time of year for us, but you decide what works best for you. Then you're gonna need to work on a communication strategy. So I, again, avoid blasting this on social media, avoid these big announcements. You really only need to notify people as they're coming in. You need to have your team set up.

You need to have them understanding what's going on. You need to set them up for success. And, and if you do that, and it's, it's honestly, it's not hard work because. If you are coaching a team, you likely care about the team, the people that you're [00:43:00] coaching.

Jen: Right.

Todd: it's not hard for them. It's not hard for, it's, geez, I'm losing my wording here. I'll say it this way. It's never been difficult for me to walk into the salon for a meeting and be like, Hey, you're gonna do a price increase, you're gonna make more money, you're gonna have a better lifestyle. You're gonna be able to save more money. That's never been difficult for me to do. If that's difficult for you, I guess work on some leadership skills.

I don't know.

Jen: Yeah, I do. Todd and I were happy that every single person that was getting a raise when, when discussed the beginning of the year and when it actually was implemented, absolutely celebrated, embraced it and thought it was wonderful. There are those people though that the idea of a price increase scares them

Todd: We've

Jen: they have what?

Todd: We've had them. Our

Jen: Yeah,

Todd: at

Jen: for sure.

Todd: like of adverse to raising prices.

Jen: Like I said, this team, there was a couple people, just certain numbers on big services. They had to work through, which cool, we coached them through that. But if your team is, is opposite of that and they [00:44:00] are afraid of it again, it's. It's kind of like I said to you, we started this January, February and worked through anything we needed to, to be really strong for that August 1st push where everybody was super excited.

So it's just on you to get them there and understand with each individual what their fear is, raising my prices scares me. Okay. Why? So for us, everyone celebrated except there were a few numbers. Like I said, we had to work through someone else might. Whatever their why is, that's what you have to start to coach them through.

How to Raise Prices: Step-by-Step [39:00]

And then really work with them so they feel confident because if they're going to the clients not feeling confident about this price increase it, this is a whole nother ball game. 'cause it's the, the client will feel that be like, what is happening here? You know? So it's on you to coach to whatever each individual needs and the team as a whole, but with a very mindful approach.

Todd: Definitely for sure. Where are we? So you can, here's another strategy you can do when you're increasing your prices that might help, is deliver more than is [00:45:00] expected.

Jen: Mm-hmm.

Todd: give, if you are nervous about it, give your clients a little something extra. Don't be crazy over the top. Don't be doing this silly stuff that you see we're doing martinis of the month and whatever.

That's not why clients aren't coming to you because you're a bar. They're

Jen: Better not be.

Todd: their, their hair. and this can be simple stuff to increase the perceived value. You can maybe work on your consultations,

Jen: Mm-hmm.

Todd: something, maybe add some sort of step to that, maybe add something where you're going over pictures, where you have pictures, where you have thoughts for your

Jen: Mm-hmm.

Todd: Like, Hey, this is what I was thinking. I know you like this. This is where I think we could take it a step further. Hey, I know you really enjoyed this. I was thinking of doing this because this is the trend this year, blah, blah, blah. Your clients will be like, wow, they're thinking about me when I'm not even

Jen: Right,

Todd: You know, there's value there. If you wanna upgrade your coffee or whatever, go for it. You can do that. And when people are like, wow, this is nice. Again, you're not a coffee shop, so people aren't coming to for

Jen: right.

Todd: The last thing I, [00:46:00] I think that you need to focus on for an action step to raising your prices is. an action step, but it's something, I guess it could be. It could not be, but you're gonna stand firm,

Jen: Mm-hmm.

Todd: about the stuff that you're not gonna do. You're not gonna apologize,

Jen: Right,

Todd: gonna over explain, you're not gonna backpedal,

Jen: right.

Todd: you're, you're not gonna project. This is where I got held up. 'cause I'm like, you're really not doing these things.

Jen: But by not doing these things, you're doing something.

Todd: it's like an un action

Jen: Yeah.

Todd: But yeah, confidence is contagious.

Jen: Yes.

Todd: if you just lay it out there and you just explain to the people, this is the price, and then stop, you're gonna be fine.

Jen: Yeah, I think not. I think our team celebrating it with, there was eight of them that were getting this price increase that helped some of them that were a little bit feeling unconfident just. The idea of price increase, can, can bring that up in you. But the fact that they were all doing it together became just this really cool [00:47:00] kind of like party feel.

And they felt like they were together on something which was really cool too.

Todd: Certainly. The last thing I want to kind of close with is the client psychology. So your clients are more likely to leave you over poor service, over bad communication towards stuff like that, than a reasonable price increase.

Jen: Yes.

Todd: It's just a fact. Your right clients are gonna adjust. They understand they don't need a mini economics lesson about how

Jen: Oh my God, please.

Todd: prices of bleach went up.

So now you, you have to increase. Like people aren't stupid. That's almost condescending

Jen: Yeah.

Todd: you start breaking down prices to people like that. People understand cost of goods.

Jen: Yeah.

Client Psychology & Final Thoughts [47:00]

Todd: 'cause you haven't done any business stuff,

Jen: You don't need to. That's why I just stopped talking.

Todd: Most people do. Most people understand, like

Jen: Yeah.

Todd: go up, it costs more, it costs more for you to deliver the service.

No, no one is questioning that. So I don't know who you're explaining it [00:48:00] to. And then the last thing I'll say really is just at raising your prices is reedy at all. It's just part of running a healthy

Jen: Mm-hmm.

Todd: Those little numbers, the $5 and the 3% are, are, they don't really take your numbers or, or do really much for you. And I guess stop treating your price increases, like you're breaking up with your clients. You're not, it's not this ultimatum.

Jen: Yeah,

Todd: telling them how much the service costs.

Jen: and then they get to decide.

Todd: if they leave because they right decide is the perfect word. They decide

Jen: Mm-hmm.

Todd: that it's not worth it for them. You have now an opportunity to fill someone else into that slot that is a better client. It's a

Jen: Right.

Todd: potential fit for you.

Jen: Yes.

Todd: Anything else? Jen?

Jen: No, that was great.

Todd: I think we covered pretty much everything. That was all of my notes. I actually had like three other sections of notes, but I feel like that's good.

Jen: I got to just sip in my water and get learn, learn, get some learning.

Todd: Well, we just went through

Jen: Yeah.

Todd: so it should be [00:49:00] fresh and I'm really hoping that people listen and if you wanna reach out, reach out, we'll help people get through this.

Jen: Yeah,

Todd: We just had a wonderful conversation the other day with a husband wife team I think we helped them through some stuff in just an hour long phone call and

Jen: yeah,

Todd: some stuff too.

Jen: it was great.

Todd: yeah, if you need help, reach out.

Jen: Okay.

Todd: We'll definitely at least help at least set you on the right track,

Jen: Yes.

Todd: least tell you what we do and what works for us.

Is that gonna work a hundred percent of the time for a hundred percent of businesses? Of course not.

Jen: No, that's the purpose though.

Todd: But it is gonna work for the bulk of them out

Jen: Yeah.