So we’ve seen that you can’t successfully compete on price because there is always someone willing to go a bit lower. That’s a race to the big ‘going out of business’ sale you don’t want. While you need to market based on value, not on price, you will need to set prices at market value. But how do you actually set your prices?
Survey the market
Every year near graduation time I start getting phone calls from massage students asking for my prices. Calling therapists in your area is the most common way of finding this out. In my market, a one hour massage will cost between $45 and $75.
When I graduated 4 years ago, the top prices for massage were $60 – $65 and it was common to add $10 for deep tissue work. I decided to split the difference and set my price at $65.
It’s been over 4 years and the market price has gone up. I’m considering raising my prices at the end of the year to keep up with expenses. I didn’t raise them last year because the local economy wasn’t very good and many offices were laying off staff. But clients have started asking if I’ve raised my rates, so I know they are ready to see an increase.
But you’re new and you need clients
Setting your price too low only makes it more obvious that you think your massage is worth less. You’ll also have a terrible time raising prices to market value in the first year. By going out with market value pricing, you are letting the public know that you are skilled, licensed (if applicable), and professional. You can offer coupons, grand opening specials, and packages to attract new clients, but understand that bargain shoppers will move on to the next dirt cheap therapist.
You can convert your ‘free student massage’ clients into paying clients by offering them a “Founder’s Rate” for the first 6 months. All of those people I massaged for free to get my log hours? They got $45 massages for the first 6 months I was in practice. Then the price went to $65. It was their reward for putting up with “I have to practice this techniques even though you don’t really need it” student massage.
You can also offer add-ons for no extra charge. How about a 15 minute foot soak and some green tea? Add a personalized aromatherapy mix for their massage. Be creative at finding things that don’t add cost but don’t require you to slash your prices.
What makes your massage worth the extra money?
My pricing allows me to spend a few extra minutes with the client so they get the full hour of massage. I get calls all the time asking what my prices are. I always mention that that price is for 60 minutes of massage time so the appointment is 1 hour and 15 minutes long. I know that the cheaper places in town offer an hour of massage for less than I do, but it’s actually 50 minutes of massage. I charge more; they get more.
How to give a discount to loyal customers
Do you offer packages?
This is the same as discounting your price except that it helps your cash flow, and cash flow is king in business. You get the money upfront, you get a commitment that they will be back for the rest of the appointments, and they get a big discount on massage. I offer a “6 pack”: buy 5 get one free.
Do you offer a shorter, more focused appointment?
Some people can’t afford a full hour, so I offer them a 30 minute, focused massage that is concentrated on their problem area. Singular. This is not a full body massage and IT FITS INTO A LUNCH HOUR. Price the 30 minute massage so that you are making the same hourly rate at a 60 minute massage including the transition time between clients. I also offer a 15 minute massage for things like plantar fasciitis, neck and shoulders, or forearms.
Do you have any suggestions for other kinds of discounts or add-ons Liza could offer that would help her compete?
I’m with you about basically charging standard market prices for a standard massage. I was a massage client for 20 years before I became a therapist, and the only way that price influenced my decision, in those days, was that if it was way out of line — too high *or* too low — I steered clear. I want someone who’s confident of their work, but who lives in the real world.
It’s never too early to start polling your clients about *what they want that they can’t get.* That’s what they’ll be willing to pay more money for. You don’t know if you don’t ask. A two hour massage? Pink Floyd on the sound system? Fifteen minutes thunderous tapotement on the paraspinals? Their toes popped in some particular fashion? God knows. People always manage to surprise me.
“I want someone who’s confident of the their work, but who lives in the real world.”
That’s true of any service provider. I don’t want the cheapest oil change in town, I want the best value in oil change.
So how do you poll your clients? Ask them? Send out surveys? I do have clients with special requests (Wake me up before you massage my feet), and that sort of thing. I have one negative review on the internet that complained that the room was cold. A table warmer fixed that and I don’t think my clients even knew that they wanted it until I got one.
Nice article! I will read it later and comment in depth.
I just ask them.
I offer all of the above but I am still having a hard time getting new clients through the door since everyone’s shopping PRICE now even my formerly comfortable clients who had disposable income have now lost their jobs. I do have 17 years experience but if I did not have renters and a second job plus other income I would not be able to live on what I make. Many of my regulars are gone and I have an idea why. I have been told straight up they are going to Massage Envy for discounted massages. These were people who highly recommended me and were loyal. I wonder if the $75 hour massage is ever coming back around here.
I’ve had clients leave for Massage Envy but come back after a few months. They weren’t thrilled with getting different therapists every time. Also, the ME sessions are 50 minutes.
This brings up the possibility that those with a large chain competitor may have to cut their sessions to 50 minutes and increase turnover time for non-insurance work to be able to cut their prices. I’m sure we’ll have to find ways to be more efficient, but we still have to do laundry etc.
There is no doubt that it is a tough problem and we are going to have to get really creative to solve it. It’s something I’ve been thinking about a lot.
This is not something I’m particularly savvy about, but heavy-duty deflation may actually be here now, and we (as small independent purveyors of luxury goods) would naturally get the leading edge of it. We may see prices drop by a third or a half before we’re done. God send I’m wrong, but that’s precisely what happened in Japan after their financial melt-down.