Not sure how to tell your clients you’re about to start charging more? Here’s how to do it without the stress.

Sure, charging lower rates for your services was fine when you were just starting out and didn’t have any clients. The bargain prices helped you attract customers and gain experience and testimonials to get your name out there.

But now that you’ve been in business for a while and you have a solid client base, you just can’t work for peanuts. It’s time to raise your rates.

Giving notice about increasing your prices can be scary—you don’t know how your existing customers or clients will react. Will they stick around and decide to pay more or go find a new service provider?

Your goal is to keep your clients and get them to pay the higher rate—which is totally doable with a bit of strategy. Here’s when and how to increase the prices of your services without upsetting your client base:

When to Raise Your Rates

Knowing when to raise your rates can be tricky—especially because of the anxiety associated with asking for more money.

Here are four signs it’s time to start charging more:

1. Your competitors charge more than you.

Do some quick competitor analysis to see what the same service providers in your area are charging. If you’re seeing higher rates, that’s proof customers will accept price changes—and it’s time for you to get in the game.

2. You’re overworked.

If you have a client waitlist or find yourself working all hours of the day, a price change can go a long way toward hiring you some help. Also remember that if you’re in demand enough to be overworked, you’re probably worth a higher price than you’re charging.

3. Your overhead is increasing.

Are you moving into a bigger space, or upgrading your equipment? Start charging for the nicer features!

4. You’ve kept the same rates for over a year.

This is the easiest rule of thumb: If you’ve been charging the same thing for over a year, it’s time to go up. Think of it as a cost-of-living raise.

How to Raise Your Rates or Give Notice About a Salon Price Increase

1. Give your customers advance notice that you’re increasing your prices.

Nobody likes surprises that will cost more money, so instead of just springing your new rates on your clients, give them plenty of notice.

As a rule, notify your clients of your rate changes at least two appointments before the increase will happen. If you’re in a field where appointments have long gaps between them, give your client a courtesy call so there are no surprises when they show up for their appointment.

If you feel uncomfortable phoning your client, communicate the rate change in a confirmation email when they book an appointment. Just make sure you give the client plenty of advance notice.

Try this template for giving customers notice that you’re increasing your rates:

Hi [client name],

I wanted to let you know that our prices have changed since your last service. Our [service] now costs [$$$].

Please let me know if you have any questions!

2. Let customers lock in the current rate for the next few months.

To mitigate the risk of customers leaving when you raise their rates, consider letting clients book ahead at the current rate. This gives you guaranteed business, increasing the lifetime value of your customers.

To do this strategy, you’ll need to announce your new rates well in advance, and then give clients the opportunity to book up the next few months at the current rate. Here’s an email to send to your clients:

Hi [client name],

I wanted to let you know that we’ll be raising our rates in the new year. Starting January 1, [service] will cost [$$$]. 

I wanted to offer you the chance to book your following appointment now at the current rate of [$$$], regardless of whether or not your appointment happens in the new year. If you book in the next week, we’ll honor up to five appointments in the new year at the current price.

Please let me know if you have any questions!

3. Give long term clients a reduced rate.

Building loyal client relationships is key to increasing your customers’ lifetime value. To foster relationships with longtime clients, consider throwing them a special discount to thank them for their loyalty.

You don’t have to give them a reduced rate forever, but let them know that you’re happy to give the reduced rate for their next three visits, or over the next couple of months—whatever time frame makes sense for your business.

Send longtime clients the following email:

Hi [client name],

I wanted to let you know that we’ll be raising our rates in the new year. Starting January 1, [service] will cost [$$$]. But because you’ve been such a loyal customer, I wanted to show my appreciation by offering you a special rate.

For your next [amount] appointments, I want to offer you 10% off the new price. It means so much to me that you keep coming back, and I want to show just how grateful I am.

Please let me know if you have any questions!

4. Give your clients their money’s worth.

You don’t have to justify your rate increases to your clients—price changes are a normal part of growing a business. But in order to keep clients happy, it’s absolutely necessary that you keep providing excellent service, so they feel sure that you’re worth the money.

With that extra money, you may want to invest in new credentials or education so you can expand your experience. Maybe you’ll upgrade your equipment, or even hire an employee to provide new services.

No matter how you use the money, make sure that you’re paying tons of attention to the quality of your services.