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Time for a Price increase? Here's how to tell your customers the right way


A price increase might be in order if your business has been absorbing inflation costs yet leaving its own prices unchanged. Now's the time to see how you can stay competitive while also keeping up with rising expenses and making sure customers are still getting value for money!


As a dog groomer, you provide a valuable service that keeps pets looking and feeling their best. And, as any good business person knows, providing that service comes at a cost. And yes like everything in the world today, those costs go up - and when they do, you need to raise your prices accordingly. But we understand that raising prices can be a sensitive topic - not just for you, but for your clients as well. So in this blog post, we'll explain why price increases are necessary and offer some tips on how you can explain them to your clients in a way that will make them understand. Let's get started!


Why do Price Increases happen? There are a number of reasons why the prices you charge for your services need to go up. For example: -The cost of living is continually increasing, which means the cost of running your business is going up as well. Inflation is a big factor in today’s market. Inflation is an increase in the prices of goods and services. The Consumer Price Index (CPI), which measures the percentage change in the price of goods and services consumed by households is a general indicator of our inflation. As I write this, Australia’s current inflation rate is 7.3% compared to last year’s average of 4.7%! Yes, this can fluctuate but inflation increases prices, across the board. For business owners, that means you’ll encounter higher costs from your suppliers, EFTPOS charges, bank charges, electricity, water, transport, and even down to your basics from office supplies to fuel are all rising in price. With inflation causing you to spend more, your business will also need to raise prices.


From rent to utilities to the price of the products we use, it has all gone up in recent years, and those increased costs need to be reflected in your pricing. You may have invested in new equipment or made other improvements to your business that require additional investment to maintain. You may be paying more for liability insurance now than you were in the past. Whatever the reason for your price increase, it's important to remember that it's not personal - it's just business!


Now that we've gone over some of the good reasons why prices might need to go up, let's talk about how best to implement those increases with your clients.


Here are a few tips:


1. Give advance notice: Whenever possible, give your clients advance notice of an impending price increase. This gives them time to budget for the additional cost and avoid any unexpected sticker shock when they come in for their next appointment. Give one-two months’ notice is usually sufficient. If you are mobile, home or salon based it’s as simple as a text or email to advise of upcoming increases, even a letter in the mail is sufficient. You can have a printout sitting on your counter for your clients to see also. This saves you from directly speaking with your clients about the increase.


2. Be transparent with your clients about why prices are increasing. As a business owner, your clients know and you know there are costs associated with running any business – whether it be from a home salon, mobile or rental salon there are always costs involved from rent, fuel and utilities to the cost of supplies and equipment. When these costs go up, sometimes you have no choice but to raise your prices. Be honest with your clients about these cost increases and why you need to raise your prices. They'll be more understanding if they know that it's not just a random price increase, but one that's necessary to keep the business running. As we mentioned before, there are often very good reasons for an increase - so don't be afraid to share them. Doing so will help your clients understand and respect the decision.


3. Explain how the price increase will benefit them. Let's face it, no one likes paying more for something they're used to paying less for. But if there is a need to explain how the price increase will benefit them, they'll be more likely to understand. You must remember you need to Invest in Your Business - In order to grow your business, you need to invest money back into it. Whether it's buying new equipment, education, upgrading your vehicle/trailer/ moving to bigger premises or hiring additional staff, these investments are necessary for taking your business to the next level. However, they're also expensive! If you want to be able to afford these investments, you'll need to raise your prices so that you can generate more revenue. For example, if you're raising your prices because you're investing in new equipment that will make the grooming process quicker and easier for their dog, let them know! They'll be happy to pay a little extra knowing their dog will be more comfortable during the grooming process.


4. Implementing a regular, fair increase either bi-annually or yearly on set dates of the year, can help your customer adjust to regular increases. That way there is no shock value and your clients will know when the upcoming increase will occur. Even an increase of $2-$5 biannually is sometimes less of a surprise than an increase of $10 annually. Remember by not implementing smaller increases regularly, can see yourself in a hole where you will need to increase a larger-than-expected amount to keep your business doors open.


5. Nobody likes to lose a client, but some clients will have a budget and if your prices are outside some clients’ affordability or they simply don’t wish to pay more, that’s ok too. It’s important to remember that by raising your prices fairly, your profit margin increases, therefore you are generally grooming less dogs and making the same amount of money prior to your increase if not more money! And yes unfortunately if a client no longer wants the use of your service it can be disappointing, but remember this can allow more room for clients that are willing and happy to pay for your services .


Groomers are kind and generous souls but remember you need to keep your outgoings within your budget and not at a loss, and increases are a necessity to keep the doors of any business open.


Here is an example of a price increase letter for clients:



 

To my Amazing Clients


Thank you so much for the opportunity of letting us groom your beautiful furbaby this year.


Due to the significant increased costs of running a business, we will have a slight rate rise. As of the 1st July 2022 there will be a small increase of $(X amount )

We so greatly appreciate you and thank you for your ongoing support of (name of business) - it means the world to us. We are committed to providing you with the highest level of quality grooming for your pet and to ensure satisfaction to you, our valued customer 


Much Love


All the staff at (Name of Business)



 


Price increases are never easy, but with these tips, you can approach them in a way that is honest, transparent, and understanding. We hope this blog post has helped shed some light on why businesses need to raise their prices and how best to go about doing it! Remember, you are worth it, and you should never apologise for increases, your business is providing top-quality grooming services and that comes at a cost - but thankfully, there are ways to minimize the impact on your clients while still making ends meet.


Thanks for reading and happy grooming!

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