When to raise rates

[Omega]

So here's the deal....I have 2 regular clients and 2 new clients to my practice, all of which I do housecalls for (that's all I do on my own) and my first client was a referral from my doctor and I charge her $70/hour, which is my 'typical' rate and I see her every 2-3 weeks and I've been seeing her regularly since October.My second client is someone that I used to work with and she has fibromyalgia (or so she thinks) and I see her every 2 weeks, but because she could not afford to pay $70/hour, I only charge her $40 and I've been seeing her since December/January.My 2 newest clients are also from an old job, and because I'm working on her and her husband, I'm charging them $60 each and they are going to try and do this once a month.  My question is, if I plan on raising the rates of the $40/hour client, how long should I wait to do that?  I would only raise it $10 more, and she already pays that because she gives me a $10 tip each time, but I'm not sure on what is an appropriate length of time before charging more.  Of course, I could just leave her rates as they are, but I don't want to be charging people different rates all of the time.  I'm also not sure how to approach the subject.  Anyone had a similar experience? ???

 

[bcbole92]

When to raise rates

I would leave the $40 client there for at least 6 months, but stick to your regular rate for all new clients. Don't discount your services. If you think 70 is too much then take it down to 60, but find a price that works and stick to it.

 

[I Love Jesus_32]

When to raise rates

I actually think 70 is quite a bargain for a housecall considering massages at a salon/spa typically go for 70 and up, and one of my big selling points is that they don't have to get in the car and drive back home, so I'm going to keep it at that and if I get someone out of my 'range', I'll just charge them an extra $10 or so for distance.

 

[ney-ney]

Reba627, I have had a similar problem. I agree with the others find a rate you feel is fair, and stick to it. I can see giving the couple a "special rate" because there is only one set up. But I think you discounted to deeply when you gave the "friend" a $40. But hey, I've been there and done that too.  :-[And then I found out that these "friends" who were getting "special rates" were turning up with new cars,  or redecorating the living room while I continued to barely make ends meet.   So, my point is, after a while you're going to come to resent it. If you are going to give a discount, make it a discount you can live with. When I first discounted my clients (yes, fresh out of MT school), they told me they couldn't afford my regular rate $40... so I did the massages for $20.  The only reason I discounted it was because they TOO had Fibromyalgia, and had agreed to get massage on a special schedule, every 2 weeks.  But they would cancel last minute, or no show, or in other ways disrespect my time.  When they would decide they were ready to get a massage again, they expected the same $20 per hour rate. :-XThe point is... if they are going to be getting special rates, they are Contracting with you for Both the Rate and the Frequency of massage, you might choose to put this in writing so that clients who get a special rate are aware of this. If they get sick it's one thing, but blowing off the MT to go shopping with friends, is NOT an acceptable reason for cancelling. My advice? Is to continue to offer it to her at that $40 rate for 6 months as Randi suggested. (Which would be from her start date BTW.)  At that time I would bring her up to $50 at least, which as you pointed out, is what you are really getting now anyway. If she's still with you at a year, maybe you could increase it to $55-$60?Cherie Shonen-Moe (in Business Mastery) suggests raising your rates only once per year, and then no more than 15% increase.The danger of giving such deep discounts is that when this "special client" tells someone else about her great massage therapist, guess what she is going to tell them your rate is? *weak smile*What you might be able to get from her is a testimonial letter to your potential clients regarding your massage. (Thus you would be able to use her comments in your advertising, if she agrees.)  Thus she is helping you to attract new clients to your practice, and enjoying a healthy discount for a limited time.  ;DAnyway, it's going to take you awhile to get her back up to the $70 level of the rest of your clients.Hope this has helped some. I understand what you're going through though, been there myself. I think that this discounting issue is tied up with the "Caretaking nature" of MT and other psychological issues, and perhaps needs to be discussed much more in MT classes.  

 

[Jason B.]

I completely agree about the 'caretaking issue' you mentioned, because we do feel bad that people can't afford our services and we do come to resent them and ourselves because we're not making the money that we could be.  It is difficult working with/on people that are friends/former co-workers, etc., because you almost feel obligated to give them a discount because they're not a stranger from off the streets, but I do know this particular woman and her situation, which is why I agreed to charge her only $40, but I'm definetely going to take the 6 month $10 increase idea, and hey, if she does it every 2 weeks still, she does.  If she moves to once a month, I've still got a client.  Thanks!

 

[Theresa]

As mentioned earlier, my biggest fear about discounting is what happens when their friends call and want that same rate.  Usually I hold fast to my regular rate and explain there were special circumstances which begs the response that "I have special needs too".  What if she tells her entire Fibromyalgia group about your great $40.00 massage?  I find that when I discount,  there has to be something on my end that prevents me from that feeling of being taken advaneforum.xxxe of.  For example, I have a client that I insist buy her sessions in advance (since she gets a great rate) so the control is in my court if she chooses to no show in lieu of shopping with friends.  It's a lost treatment for her and I explain that in advance - if she no shows/no call.  I suppose the best thing is to maintain one price all the time but we know that's not realistic.  Yes, some clients will go elsewhere but your time will be better spent cultivating the client that can afford your services on a regular basis.  Recently I missed my piano lesson and had to call at the last minute to let him know I wouldn't be able to attend.  At my next lesson, hee simply said, it's $50.00 today (when it's usually $25.00).  There was no discussion "you know, last week, my policy is, I'm so sorry but ....".  All that was said was "Good lesson, today's $50.00".   He didn't feel any guilt about it and I respected that fact that he values his time.  Sorry for the rambles.  Joe E.

 

[Tdog]

When to raise rates

When I see my clients for the first time, I give them a punch card, after 5 massages, the 6th is free, and I usually give them a reminder card of their next appointment and at the bottom, there is a note that says "If cancellation is less than 24 hours notice, a $10 fee applies" and I've had a couple of occassions when my clients do cancel at the last minute, but I've never charged them the extra $10 cancellation fee, and I've had people tell me that $10 is nothing, I should raise it to $20, but is it appropriate for me to start enforcing that now?

 

[miaugh]

The only thing I can think of is that you should put an effective date on policies.  That way, it's very clear that that's been your policy for a specific amount of time and your not raising rates at your convenience.  Also, a new client won't be as apt to think that you're trying to bait and switch them when the prices do go up.  As for the cancellation policy, $10.00 is way too low in my opinion.  Your timeis worth way more than that.  I think you should raise it to $25.00.  Those clients who don't or wouldn't no show on you, will have no problems with the increase.  Only those that flake out on you will take notice.  Joe E.

 

[Michelle R]

Joe,Since I only do outcalls, I'm thinking of this for your suggestion...send out a letter, say, April 1, and state "effective immediately, any cancellation less than 24 hours before appointment will be subject to a $25 cancellation fee." or something like that....what do you think?  But what about family emergencies, sick children, etc.  Is it a courtesy to waive the fee in a case like that?

 

[Pompal 09.]

I think that's fine but if you're going to send a formal letter wrap your message around something positive.  A letter that just states a fee policy might put some off.  If it's going out effective April 1st, do a tax break special and offer a discount of some kind (with an expiration date) and mention the new cancellation policy as the secondary message in the letter.  That's my thought. Joe E.  

 

[Tina B]

When to raise rates

my 2 cents...Or you could install this new cancellation policy on all new cards, live out the old ones as people use them up, and with new clients (or after people are done with their 6 sessions) give them the new card, and say "Please note the new cancellation policy I've added to the punch card. It's a policy that I've been forced to change due to my time becoming more valuable." ....or something like that. Personally, I raise rates no more frequently than 18 months. But I have clients who've been coming to me for over 8 years...plus, I'm a softee!

 

[Bandit]

I like the idea of having it on the punch card as well as the reminder card....I'll have to do that with the next batch.  I'm just worried about clients not wanting to rebook if they get charged the cancellation fee, but I think that's just my insecurities as still being a bit new at this.  I hope it gets easier to put my foot down!

 

[MiSs. H. aKtHeR]

An idea...You might let the $40 client know that your rate is changing, effective immediately, BUT that you will give her the opportunity to lock in the $40 rate for her next 6 massages if she purchases a pre-paid package.That way, she can still feel like she's getting a bargain - because she was still getting the low rate after the prices changed.  Plus, by the time her package is finished and she pays for the first full-price massage, the memory of writing a check for $40 is not quite so fresh in her mind.

 

[ChrisPark]

That is a good idea, but going from paying $40 to $70 is a big shock, but you're right, if she prepays it, then she won't really miss it.  Definetely something to think about.  I'm thinking of sending letters to my clients to announce a 'spring savings' or sorts....say, save 15% when they buy 5 massages at once or something like that...

 

[INDIAN]

When to raise rates

I think that this discounting issue is tied up with the "Caretaking nature" of MT and other psychological issues, and perhaps needs to be discussed much more in MT classes.

Boy, is that the truth! We've all been there and that's why this forum is such a valuable tool . I would really enjoy exploring these issues in depth. Not only is caretaking an issue, others might be: enabling, the need to please, guilt etc I guess it's a package deal when you think about it. And, they have had influence and impact on the way I run my business.

 

[rswinteller]

Just thought I'd add my 2 cents

About raising rates... I JUST did a rate increase, by $5. I continue to let my regular clients (those I see at LEAST once every 6-8 weeks) enjoy the old rates for 3 or so more months.

About housecalls... Let's face it: Massage therapy is HealthCare. However, massage therapy becomes Luxury when the client has you come to them, (unless the client is in a wheelchair or has an impairment that bars them from driving.) There is SO much additional work and expense involved in a housecall; the gas, toll fees (if applicable), extra time it takes to drive there (AND back), the extra setup and teardown time, etc. They can easily eat up another hour of time. Thus, my outcalls are NOT cheap, because I believe in being compensated fairly for my work, effort, and time.

About discounts... I discount 15% for friends. I find 10% to be too chinsy, but any more than that devalues my work. I don't offer a sliding scale based on income; I concur with other threads on the subject as to why. The discouts I offer are:
--cash discount. $5 per session. Pertains to cash only, not checks.
--re-book discount. $5 per session. When they schedule another session before leaving, I reward them for thinking ahead, by giving them $5 off toward that next session. (Doesn't apply to the current one, but the NEXT one.) Has worked very well.
--PRE-paid package discounts. Like buying in bulk. Applies to 5 massages of equal length, alwas 10% off. They must schedule all 5 appts at the time they buy the package. Cancellation requires 24 hours notice. Makes life a LOT easier.

That's about it.

Another thought: if you charge one price, and then are quick to discount it deeply, there's a problem that needs some adjustment. The trick is (and sometimes it's trial & error) to find a price that resonates with your core. You'll know what it is when you hit it. Go through, starting at $40, then go to $50, and so on, getting a feel for each number. You'll react to each number, either "no that's too low" or "no, I can't justify that". Find the number in between where your reaction is "yeah, I do that". Solutions that have worked for me are to either bring your price down, if you think it might be too much, or get additional training that would justify the higher price.

Best of luck!! You'll do fine. Believe in yourself.

Hugs,
~Jyoti