NICHE MARKET- Best way to Increase prices?

**Phranksizzle** · 06-08-2009 08:11 PM

Hello,

I have an airbrush tanning business in Texas. I won't go over the profit margins of my business becuase my industry is overly saturated with "mobile only" tanners who do shitty work, and have no clue what the hell they're doing. But anyway, here it goes.

I currently charge $50 per airbrush tan. I do have packages for 5 for $200 ($40 per session) and 10 for $350 ($35 per tan). I will have been in business for a year in July. I am looking to raise my prices -- I eventually want to top out in the $60-$75 range. I am in a very upscale area, I am the only place in the entire area who does airbrush tanning (read: professional airbrush tanning, in a dedicated studio... NOT INSIDE OF A SPA OR SALON, with a lot of publicity).

What is the best way to raise my prices? I am thinking of slowly putting the price up $5 every 4-6 months. I also am re-thinking my package pricing, right now, I love it becuase it gets me a lot of capital to work with , but I am also taking a hit on the price (I still have rent, employees, commission, etc) to pay)

Any input is greatly appreciated!

**Gaulkin** · 06-08-2009 08:38 PM

Is there value at 60-70 dollars per tan? Price has little to do with what you offer, it has to do with the customers opinion of what they get. If people are happy to pay you 70 dollars for a tan then there is no reason why you shouldn't just make that your price right away. However if your going to raise your prices i would suggest doing it one time and only once. If you keep doing it people will think your just out to take there money.

**Phranksizzle** · 06-08-2009 08:49 PM

There is definitely value -- we formulate our own solution, do custom color matching, only specialize in airbrush tanning at our dedicated location (not inside of a spa salon) we are the only ones who offer the service in the area.

**mjb96** · 06-08-2009 09:08 PM

I don't know what your reputation is like around the area but if you get to the point where everyone knows that your clearly the best, people will pay whatever you charge.

It goes down to that simple phrase "you get what you pay for."

**Gaulkin** · 06-08-2009 09:33 PM

Originally Posted by Phranksizzle

There is definitely value -- we formulate our own solution, do custom color matching, only specialize in airbrush tanning at our dedicated location (not inside of a spa salon) we are the only ones who offer the service in the area.

Well you just answered your own question.

**Phranksizzle** · 06-09-2009 12:28 AM

Any suggestions on how to raise my prices?

Right now I am thinking of putting a notice up (effective in 30 days, our price will increase from our grand opening rates." An airbrush tan will now be $60 as we continue to formulate our own solution, improve, test, and maintain the same superior quality." Something similar to that.

I do still want to be able to increase my price to around the 70ish range though, should I say that our price will continue to increase?

**Gaulkin** · 06-09-2009 05:20 PM

Id suggest raising them without giving any notice. This way the least amount of people will notice and if you start to see a decline in customers you will know that value has been compromised.

**jonathanfigaro** · 06-09-2009 05:39 PM

Analyze your competition. check out there prices and even try out there products. See where they are strong and weak. If there value is low,then provide better value without compromising your price to a degree. By increasing the quality, people wont care much in regard to how much they pay for the service because they are getting more than quality than any other business with in your vicinity.

In addition i would like to leave you with this. Treat every customer as if they are the most important person in the world. If you do this you will receive so much profit , you will be be happy you read my post. The Customer is KING Or Queen, they will make you Rich Or Keep You Broke.
GodSpeed

**elliotiscool** · 06-09-2009 05:58 PM

Although I, in no way know much about your industry, I would slowly increase them if I were in your shoes. As I increase prices, I also would keep detailed stats and graphs on your number of sales comparing each price change, number of converted customers, etc. Your ultimate goal will be to find that sweet spot where you are making the most money in comparison to prices and number of sales.