Issue link: https://www.massageandbodyworkdigital.com/i/1037165
best practices BUSINESS SIDE 24 m a s s a g e & b o d y w o r k n o v e m b e r / d e c e m b e r 2 0 1 8 Raising rates isn't a topic that therapists tend to embrace in a warm, cozy hug. Why not? Because it tends to bring up the most complicated and uncomfortable aspects of our relationship with money. Also, we communicate with clients face to face—we're not just putting a new price tag on a can of beans— so informing them of an increase can test our confidence levels. Acknowledging those things, we need to remember that we're running a business and we should charge a fair price for the service offered, and raising rates is part of the process of creating a successful practice. I've created this step-by-step Rate Increase Action Plan to help give your next rate increase process some structure and make it as easy as possible. It's time for me to adjust my rates too, so I'll be following these steps right along with you! COMPARE IT It's helpful to start the process with a competitive analysis to see what other practitioners in your area are charging for similar services. Use the rate comparison chart to mark your current rate and the rates of five local competitors. This will give you a realistic idea of where your rate falls in the marketplace and will help you make an informed decision when choosing your new rate. Complete a chart for each of the different rate categories you have on your service menu: different session lengths, modalities, etc. HOW MUCH? The big question, of course, is how much should you charge per session? What's the "correct" rate to charge? There are several different pricing theories and, as a small business owner, you'll need to choose the strategy that works best for you. Experts caution against setting your rate significantly lower than the competition as it equates to lower quality in consumers' minds. Most recommend choosing a fair and reasonable rate that reflects the value of your service and is in line with competitors offering a similar service. Setting your rate significantly higher than others needs to be justified with superior skills, experience, and value. If you'd like to do a deeper dive on this topic, do a web search for "psychology of pricing" for resources on how to position your rate compared to local competitors. HOW OFTEN? Consumers react more positively to small but steady increases. So, a $5 increase every year will have a more positive response from clients than a $20 increase every four years. WHICH WORDS? Now that you've decided on a new rate, you'll need to come up with the language you'll use to communicate it. Consumer psychology studies show that using language like "adjust my rates" versus "raise my rates" and "small $5 increase" versus "$5 increase" helps consumers get on board with a new rate with less resistance. Be sure you're also communicating the value of what you offer; don't assume clients are aware of enhanced skills and experience that justify the increase. No matter what words you use, the key is to truly—to the deep-down core of your being—feel confident that the new rate is an honest reflection of the value of your work. If you don't believe it, no one else will either. Some practitioners find practicing their wording out loud with friends helps them feel more confident when talking with clients. WHO PAYS? Does everyone pay the new rate at the same time? That's up to you. You can apply the new rate to everyone at the same time, to new clients only, to new clients immediately and then current clients after 60 days' notice, etc. Make the decision based on what's best for you and your practice, though, not because you feel too nervous to communicate a new rate to current clients. COMMUNICATE IT Choose a start date for the new rate and give current clients 60–90 days' notice of the rate change. Communicate both the new rate and the start date. Take a three-prong communication approach—face-to-face, visual, and digital—to avoid an incredibly uncomfortable and unprofessional situation where you expect a client to pay the new rate and they're unaware it has changed. Talk to clients in person when they're in your office. Post something in your office as a visual reminder. Send clients an email and put the new information and start date on your website and online scheduling program. Do your due diligence to inform everyone of the change well in advance. Kristin Coverly, LMT, is the manager of professional education at ABMP. She's a massage therapist with a business degree who cares about you and your practice and loves providing tools and education to help you succeed. Watch her webinars at www.abmp.com/ce and contact her at kristin@abmp.com. Need to Increase Your Rates? Here's Your Action Plan By Kristin Coverly