I could use your help...

[crtbryn]

Pull up a chair and make some tea, this one may be another one of my looooong posts!

I need some advice, some different perspectives other than my own!

First, a little background into my situation. I have been in practice for over 6 years. In the past 4 years I have brought on associates/IC's. As many of you know, building a clientelle is hard work, and in the begining I was very insecure about my abilities, not to mention flat broke. I offered very low rates to attract new clients, and it worked. I slowly built up my practice. Now, due to those affordable rates, I attained about 5 weekly clients, and 4 every other week-ers. They have maintained that schedule for the past 4-6 years. Most buy pre-paid packages at very discounted rates, and I don't mind because they have been sooo loyal and dependable for so long. Since I am the owner of the establishment, I really don't mind taking the pay cut.

Here is where it becomes a problem. I now have 5 MT's other than myself providing massage either full or part time. I try to pay them as much as I can afford to. For example if a basic swedish hour is $50, I pay the MT $30, and the house takes $20. The more difficult the service, the higher % I pay the MT. I value their time and talent.

I am 6 weeks away from having my baby. My Office Manager/Goddess has been very good at keeping my schedule at a managable level, and my clients are completely understanding that they will have to go to another therapist, the further I get a long. However my Office Manager/Goddess is very concerned about how much $$$ we will lose when the other MT's take over for me...there are some packages when you break it down, we (house) will actually be losing $$$ to pay the therapist. This is at a critical time since I am a primary breadwinner for the practice, and will be on maternity leave. I have $$ saved to maintain the office while I am gone, however I would rather at least break even instead of running in the red.

Common sense tells me to raise my rates for these clients, for at least the time period I am not working. This is obvious to the business side of me. However working on these people for week in and week out for many years, they become more like friends and family than clients. (also another reason I justify charging them less). I am uncomfortable bringing this up to them in person, but I am concerned sending them a letter would be impersonable (is that a word?) since I see them every week.

My Office Manager/Goddess suggested that since she is the taker/keeper of the $$, that it would be more appropriate for her to approach it in person, or for the letter to maybe come from her. Any thoughts? And in that case, do I do a temporary raise or leave it as indefinite?

At this point I would like as many of your ideas as I can get, so that I may find the one that fits me the best. You all have such different yet similar perspectives, and I am sure that there are others who will benifit from this thread... pregnant or not! :wink:

Is your tea cold yet?

 

[Jip248]

Common sense tells me to raise my rates for these clients, for at least the time period I am not working.

Mmh. That is one I am going to have to think about before I respond. :?

However, my gut is telling me the clients can't be penalized (for lack of a better term) and pay more for their "second choice" therapist.

 

[xsageo]

I struggle with this every time I choose to raise rates. About a year back I raised my rates at a chair massage job that I had for years. I was so worried about doing it and once I finally did I got to see how much they supported me. They even told me it was about time.

I have now made the decision to raise my table massage rates. It is going to be $5 per hour and 1.5 hour will go up $10 (from $65 per hour to $70 and $100 per hour and half to $110). Not that large of an increase, but the difference will be a big help with saving some money. Those on the maintenance plans will have an increase, but since they are all getting a deal to begin with I don't thing they will mind. I have had clients tell me to get my letters out!

I have a letter prepared and I plan to mail that with notes to anyone that has a special discount to let them know they will stay as is.

After your time in this profession you are very entitled to raise your rates. Especially with the baby coming. Sometimes we have to go with the business side of ourselves (because that is what this all is) and do things that benefit us and our situations.

With the clients being as understanding as they have been, I am sure they will totally understand your rates increase. You have earned it in more ways than one.

 

[joshua b]

Not sure I follow the math

If you pay your therapists a %, then I don't see how you will lose money.

I am not sure why you pay your therapists a higher % for more "difficult" services. If you charge a higher rate, then the therapists makes more $ at the same %.

 

[Me Fang You]

With the clients being as understanding as they have been, I am sure they will totally understand your rates increase. You have earned it in more ways than one.

my thoughts exactly. you deserve a raise.

 

[mom of twins]

If you haven't raised your rates in 6 yrs then I'd say you are overdue for an increase. Your expenses have gone up haven't they? Your clients will understand as long as you don't make the increase an unreasonable amount.

One thing we do when we are considering a price increase is to call around to other clinics to see what the going rate for massage in our area is. We like to keep our prices on the lower end of the spectrum. This way if clients are bothered by the price increase, when they call around they will find that we are still a bargin, so why leave the therapist that they like to just pay the same price (or even higher) elsewhere?

If it would make you feel better, then by all means let your office manager notify the clients of the price increase. We normally post a sign at our front desk 4-6 weeks before the new prices go into effect so all of our regulars will have plenty of advance notice.

I know it's usually our 1st instinct to "take care" of our clients but we also have to take care of ourselves and you also have to remember that you have a baby to take care of too now.

Good luck,
Angie

 

[Emma?]

I know it's usually our 1st instinct to "take care" of our clients but we also have to take care of ourselves and you also have to remember that you have a baby to take care of too now.
Good luck,
Angie

That's an excellent point Angie, we're primarily a profession of caretakers, and we often get so involved in taking care of others that we neglect taking care of ourselves. We invested real money in our education... and continue to do so by taking CE as needed. Our expenses are constantly going up... why then do we have such big issues of raising our rates by a mere $5 to $10 per hour or service? I admit, I'm guilty of this as well. But I'm really going to try and work on this.
So many of our bills have gone up this winter (especially gasoline, heat and electric) and it's not like we don't need these things to do our business!
I've got to call around and see if the rates have gone up in my city... and if it isn't high time I raised my rates a little as well.

 

[BMWbuyerGoGo]

I agree with R&R about the %.

I think you should set a permanent increase and perhaps think about a flat % to pay your ICs.

Perhaps increase a little now and then when you come back to work you can increase the rest of the way? Or when baby is a year or something.

All clients at both my and my husband's businesses have been very supportive and generous when I was pregnant and in the past year that we have been making adjustments with family/business life.

I don't think as a client I would be fooled by getting a letter or hearing from the "office manager" that prices are changing when I know that you own the business. I think if you do it that way you will still hear comments good or bad.

I don't think it is unfair to raise prices while your clients will be going to a different therapist. Afterall they will either go there, or find someone else who might be more expensive, or they will wait.

Go with your business sense and just raise the prices I really believe that these long time clients will come through for you. It is so obvious that you will be needing to make more money with a child to care for! People know this. Expect people to understand this and be surprised if they are grumps.

 

[karyssa shea]

Thanks for the replies!

Tex, you bring up a point that we (Office Manager and I) have discussed, but that I failed to put in my post. A part of me feels like I am "penalizing" them for going to the other MT.

As far as rates... in the grand scheme of things, I have gradually raised my rates from *wince* $35 and hour for a massage (regardless of what type it was) to a structured service menu. This applies to all of our clients with the exception of my die hard regulars that have been with me forever on a weekly basis. We will be rasing some of our rates as of April 3rd as well. This would really affect some of my cheap rate people, or me depending on which way I go. For example, I have one guy that comes in for 90 minutes each week. His massage is mostly MFR & NMT for an hour on his back and then 30 mins swedish on the rest. I have charged him $65 for a long time. As of the rate change in April, He would normally be charged $80 for the same massage. My average % breakdown is abut 65% to MT and 35% to house. The therapist would then make aprox $55. I will not pay them less to do the same job as they would on someone else, as it was my choice to charge the lower rate. Therefore not only am I not bringing in the $65 from the client, I am barely making anything on the % either. (Did I mention I tend to donate most of what I bring in - back to the house?) Multiply that situation by about 5-8 clients a week (With some of them creating a negative cash flow) and there is my cause for financial concern.

I have been consistently cutting my hours back, and it will only be a matter of a few weeks before I am not working at all. I intend to take 2 months off and only come back to work 3 days a week after that. I have been a workaholic for a long, long time, and my family has patiently waited for me. I have finally reached a point emotionally that I realized it's time for me to put my family first. I need to deal with this situation. It's just a matter of how I do it. I handle most confrontations quite well... but this isn't a confrontational- type conversation. And I really don't want to raise their rates, I'm only doing it because I have to. That's where the guilt comes in. I do terrible at having conversations when I feel guilty about what it is I have to do.

I can write one heck of a letter that would sound great, but then I go back to feeling like that would not be the right way to handle it. I think I am just torturing myself.


Thanks again for your ideas, they are appreciated!

 

[rona f]

ahhhhh... I think I am getting the picture. Your rates are different for each client depending on how long they have been with you and when they "came on board". Are the rates different for the other therapists clients too? I am figuring they are not.

If that is the case, I definitely think everyone should be paying the same no matter who they see. First, it will make your accounting much easier I would think.

When we raised our rates (we raised them $15 across - with a few dollars more for longer treatments) many of our clients said "It's about time". I even had one that told me he appreciated the great rate he had been getting for so many years. He didn't leave either.

However, I don't think you should charge them extra (if there is a normal rate for the other therapists) and then drop them back down to your inexpensive rate when you come back, unless you word the letter in a way that says something along the lines of:

"As you know I have always kept my client rates at a different level than the other therapists I hire in my place of business - however, during the time I am out, you will be required to pay the regular fee until I am able to work on you again."

But I still think it makes more sense just to get to a standard fee for everyone.

Just my thoughts. Hope they help in some way.

 

[Jerry Toad]

Thanks, Tex, that does help. Funny how as winded as I get, I am still unable to completely describe my situation! Yes, there are only 1 or 2 clients that my IC's work on that have any sort of discount. All the others are under my care.

I think at this point I will write a letter, since I believe I will be able to explain the situation with out getting tongue tied and then sliding backwards and telling them not to worry about it, they can keep their rate. (Even though I know in my heart of hearts that they will understand and support me, it goes back to a guilt thing) These clients were the only things keeping me afloat in the beginning, and I am grateful for that.

Did I mention how much I appreciate having you all as a sounding board?
Thanks!

 

[Nicoke<3]

i have to agree with r & r.

you are short changing yourself. stop feeling guilty and raise their rates.
as a business owner, i cannot imagine your costs have not increased over the years. it's time for your raise.

 

[Hammy]

R&R - Just the bluntness I was looking for! :wink: And as for the donation/equity - that is exactly how I see it, as equity. It is what I have done for years in order to build the business...constant re-investing. I worded it as donating because there seems to be far less business owners compared to IC's on this board, and I thought it would be an easy concept to get.

I have decided that I will approach each client in the way that will work best... I have some that it would be best face to face, a couple that by phone would be fine, and one or two that I will send a letter to.

Whenever something makes me feel uncomfortable, I try to face it ASAP and get over it. Everyone's advice has helped me very much in figuring out how I will handle this situation.

Thanks for the feedback!

 

[sofeinurbizness]

Hi KM

First off, congrats on taking care of your MTs

Question for you... You said in your original post that if one of the other MTs took over some of your pre-paid package clientele that you'd actually lose money to cover the therapist's regular rate. To me, that means that the per-session breakdown ends up to be less than $30 per massage, right? If so, that's a pretty big difference from the regular $50 you charge for your Swedish. That's a pretty good deal! This probably isn't an attractive option for you, but the per-session package rates seem pretty low, and maybe you want to increase those some, at least for those who are in a position to afford a little extra? Again, not sure how palatable that is for you, but it's a thought considering the size of the price break. Perhaps to soften things a bit, you could make that a temporary increase, only to come back down when you come back on board?

Just my thoughts...
~Jyoti

 

[Sarita]

These clients were the only things keeping me afloat in the beginning, and I am grateful for that.

And those same clients should be grateful to you not raising their rates over the years.

Say you ran a sandwich shop, someone has being buying a sandwich EVERY day for the last 8 years do they expect you to charge them the same price for the sandwich for the last 8 years? No, they realise the price of bread has gone up. They realise the effort involved in trying to keep track of their special pricing, they would happily pay the increase. If you were prepared to give them a special pricing, that is much cheaper than elsewhere, they won't complain and they probably wouldn't bother looking elsewhere because they know sandwiches have gone up for everyone else. Would you think the sandwich shop owner is being very sensible?????
Depending on the sandwich place, 5 sandwiches per week would cost about half a massage, or maybe a whole massage!

The only reason your clients would have a problem with a price rise would be because they haven't had one before. They'll cope and they will appreciate the years you were able to offer them a special price. Yes a $15 increase on a $65 treatment is a 23% increase, but how many increase had been avoided over the last few years?

 

[rick]

As for the $15 increase melb just mentioned. I know we did $15 increase (as I mentioned) and we had not increased in 9 years. 23% does sound like a lot, but at the same time, if you do it now, you won't need to again for a while. *just a thought*