Raising Your Rates

A touchy subject for all massage therapists. When do you do it? How? What do you say? This question was recently posted on LinkedIn's Massage Therapists & Bodyworkers group:

I would like to hear what other therapists tell their clients when they ask why you've raised prices. (or if they complain about it). I raised my prices last year from $70 to $80/hour. I was underpriced for my area, now I'm competitive. I own the business so about 30% of my clients tip but I don't count on it and it isn't expected or considered in my financing. We all know why we have to raise our prices: 1) To stay competitive and not under-value our work. 2) To pay for the increases in the cost of doing business so that our profit margin remains the same. People who are employed get annual 'cost of living' raises. we don't unless we raise our prices. I am resentful of people who don't understand this, and have a hard time coming up with a concise, professional way to explain. I certainly think I'm worth the raise, so that is not the issue, and I'm not defending that. Thanks!

Cass Vertefeuille Garrett of Greenleaf Therapies, LLC

First off, Cass has it right. When we're self-employed, we are the ones who have to give ourselves a cost-of-living adjustment. I think that Cass has already presented some good reasons why we need to raise prices, but let's take a look at the thought process behind it and the when and how of increasing rates.

Why Raise Rates?

The thought process here is a simple one. Our prices aren't static, as our clients often seem to think they are, and like we MTs can even fall into the trap of believing. There are lots of factors that drive our pricing, some of the most obvious being: inflation, increased cost-of-living, increased costs of doing business, having increased experience, training, or specialized skills, and so forth.

Because these expenses aren't static, neither can our prices. We need to build that mentality into our business plans and practices. Ideally, we should also build this into our clients' expectations. Think about the example of a client who wasn't informed that they might be sore following a massage who then becomes sore afterwards. The are upset because it was a surprise and worried that something might be wrong. The same can happen with your business practices. Build in the expectation that prices will change periodically to reflect the current economic environment and it won't be such a nasty surprise when it happens. I'd include this expectation in your policies from the very first appointment with your client.

When to Raise Rates?

The knee-jerk response to this question is "when you need to" and that is a valid answer. But it is also an answer that implies a lack of planning or control. While you do need to be responsive to factors such as rent increases and the like, that shouldn't necessarily be the only reason to look at your rates.

My recommendation is to develop a process to systematically examine your pricing structure. Earlier, I used the word "periodically" to describe when rates would change (nice foreshadowing, eh?). That means that there is some kind of established and regular time-frame for when the rate changes occur. I go with a yearly period, but you could go shorter or longer if you'd like.

This evaluation should take into account all of the changes to your personal business climate over the course of that period. Some examples:

1. Taxes - increase or decrease?
2. Expenses - personal and business
3. Inflation - don't overlook this one!
4. Local changes in the market - competition, new regulations...

Inflation alone means a pay-cut every year if you don't adjust your rates. A 3% inflation rate means you essentially earn that much less in spending power that year. Over a couple of years of static pricing, that really adds up!

Generally, I would suggest that you factor all of the cost increases in and figure out the percentage that impacts your real income (not dollar amount, but buying power). If it's not too big, you can hold off tacking on another $5 onto your rates, but then plan on it for the following year. Just make sure that you establish a schedule - a fiscal year, if you will.

How?

This is probably the one most MTs have the problem with. How do I actually break it to my clients? Won't they be resentful? Will I lose clients? These are common fears.

As far as resentment from your clients, nobody likes to have prices go up, but it's a fact of life and if you have prepared they way with client expectations it won't be as big of a deal. And losing clients? Maybe. But if a client leaves because of a small and realistic price increase, they weren't there for you, the health of your business, or the results you deliver; they were there for price alone and you won't miss them. That's a reason why I only use low introductory rates with caution - it fosters an relationship where the most important factor is your low price relative to the competition. If you do have some clients that truly cannot afford your new rates but you want to keep in your practice and they need the work - try including these clients in part of your planned charitable giving. All individuals and businesses should plan on giving some of it all away, either for free or at cost. It's good for everybody. Set aside a certain number of appointments a week (I shoot for 10%) that you can either give away or perform at a reduced price. That way the cost to you is limited, accounted for, and planned on. Everybody wins.

Breaking the news is not the most pleasant of tasks, but like other forms of boundary enforcement, it is necessary. It should be done in the spirit of both acceptance of the fact it must be done and compassion for how it affects your clients. It should be delivered firmly and clearly, with compassion but not regret or apology. Some suggestions that I posted on the LinkedIn forum:

You might try something along the lines of:
"Dear valued client, As I'm sure that you are well aware, the current economic environment has placed additional pressures on all businesses. Unfortunately, my practice has not remained isolated from these pressures and in order to continue to operate soundly I need to increase my rates to (insert your new rate schedule). These new rates are effective on (date). Thank you for your continued support."
Or...
"Periodically, I must adjust my rates to reflect changes in inflation, cost of living, and operational expenses. As a result, I will be increasing my rates to... on (date)."

Promote It

As a teacher, I've had to deal with from time to time is change - curriculum changes, textbook changes, procedural changes - and times of change can be stressful to students (and clients). The important thing when you are implementing a change, even a rate change, is to promote the positives. Sometimes it icludes an explanation about why, sometimes you just emphasize the improvements. With rates, it could be as simple as "to continue to provide the same level of service in the face of rising costs". Your students, and you clients, will pick up on your attitude about it and it does influence how they feel about it. If you are positive, it will move their feelings about it in a more positive direction. If you are negative, they will fight you on it. And if you are wishy washy about it, they will feel they can get you to make exceptions and special allowances.

One thing that can turn the change more positive is to tie in the rate increase with a promotional period. Give a date for when the new pricing takes effect and allow your clients to take advantage of getting in some more appointments at your current rate. Even allow them to buy packages or gift certificates at your current rates up until a certain date. This can have the effect of increasing both the amount of business and having money in your pocket up front. If you worry that things might get tight, you could restrict the discounted certificates to certain times or days so it doesn't interfere with your full-priced business.

So to summarize, make sure you regularly evaluate your pricing and make sure that your pricing is optimal for your business climate and meeting your needs. Be positive, firm, clear, and compassionate about how you communicate a rate increase to your clients. Expect you may lose a few, but most will understand and the ones that leave aren't the healthiest clients for your practice anyway.

Good luck!

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Massage and Money

Money. It's a word that has a lot of baggage tied up with it. And it's something that I have noticed that many people seem to be uncomfortable with. Especially massage therapists. I have had plenty of students and seen plenty of practicing MTs that have an unhealthy relationship to money. Why? Massage is about relationships, and this post is about a massage therapist's relationship with money.

I've heard many people misquote the Bible as saying that "money is the root of all evil". Actually it says that the "love of money is the root of all evil." A big difference and a lot more true. Money itself is just a tool. A medium of exchange. A knife isn't a good tool or bad tool, it's how you use it.

Another heavily quoted line is "do what you love and the money will come". A lot of people do what they love and money doesn't come, so what gives? This statement has the priorities right, but misses the mark. I choose to interpret it as

"do what you love (follow your passion with a systematic plan) and the money will come (if you respect it for what it is and what it means to you)"

So why do so many people have such an antagonistic relationship with money?

First off, some people hate what money represents. They have seen what some people do to others to get it and don't want to be associated with that. It could be a matter of worth or value - the the therapist doesn't feel that they are worth the money - a self esteem issue. It could be a sense of idealism or a genuine desire to help without need for compensation.

Money can seem hard to come by. It can seem like there is a chronic lack of it. Especially in these economic times. A person can get used to thinking that there is never any money for them, hating it all the while. Some people pursue money as an end to itself, a way to keep score, as if just having money affords the status or life that they want.

The problem with the pursuit of money is that money is a very poor motivator for happiness. People (and studies prove this) don't gain a whole lot of satisfaction or improved quality of life from having more money. Ironically, the reverse is true though, that not enough money is a huge de-motivator and a source of distress and unhappiness. Money can't buy happiness, but not having any leads to sadness.

Putting Health and Money at Odds

Our society often seems to pit health and money against each other. When we hear studies of the impact of some diseases on the poor and the exclusion of 40% of americans from our health care system because they can't afford it, there is an association with money. In fact, the increasing inclusion of massage in health care may make massage more exclusive instead of more accessible.

Many massage therapists have an idealist streak that creates guilt about charging money for what they do. Massage is like a divine gift, something that is present in all of us and can sometimes feel like charging for bottled water when people can get perfectly good water out of their tap.

Unfortunately, this can lead some MTs with a burden of guilt about money and their business. It sets the stage for a struggle with their career. After struggling in their private practice, they may get a job at a massage business and harbor resentment towards the business for collecting the money the therapist feels guilty about charging! Sometimes the MT grows disillusioned, thinking that the bodywork itself was tainted when it was their attitudes and beliefs about money that were the problem. They end up moving into a profession they don't really care about but is more "reconcilable" with their ideas about money.

Cultivating a Healthy Attitude About Money

If you already have a healthy attitude about money, you can skip this next part. This is for any MT who feels at all guilty about collecting money for their services.

Money isn't evil. I'll say it again. Money isn't evil. You say it. Really. That wasn't so bad, was it? The first step to cultivating a healthy attitude about money is to acknowledge that, at the risk of being redundant, money isn't in fact evil. It's your attitude that is.

You have to realize that you need to make a living. If you can't make a living doing massage, you'll need to make a living doing something else to pay the bills - which means that you won't have nearly as much time to give the gift of massage. Massage-wise, everybody loses that way. You aren't doing what you love and your clients won't get to receive the benefits of your work. I suppose your new employer would benefit from your awesome-ness, but that's not quite the point.

A healthy business supports both you and itself. And when I say supports, I don't mean just squeaking by. It should support your lifestyle and help you to achieve your dreams.

Example. I knew a massage therapist a while back who had been working longer than I had. She'd been out of school for maybe four years and still had plenty of clients that were paying her student rate - half her regular rate. I found this out after asked some questions following her wondering why she was having trouble making her car payment. When I asked why a significant number of her clients were still paying such a reduced rate, she told me that she was afraid of losing them if she charged them more. Several weeks after we spoke, she did decide to raise her rates. Not all the way, but much closer to her going rate. She did lose a few clients, but most stayed with her, and a few even told gher straight out that they had wondered why she hadn't raised her rates a long time ago. She ended up making more from the remaining clients than she did with her full load at the prior rate. The clients that left only came to her because she had the cheapest rate around, not out of any loyalty.

There Is Plenty Of Money To Go Around

You may not believe it, but there is. For example, here in the Bay Area we have around 7 million people and a median household income of a little over $70,000 per year. If we estimate an average household as 4 people then we're looking at somewhere around $120 billion every year flowing through this area. That's a plentyhuge pie to capture a very small slice of.

The other thing is that that money is going to be spent anyway. Either they go to buy a car, or they go to the mall, they order an iPod online, or they invest it somewhere - but money is changing hands all the time. All you want to do is have some of it pass through your hands first. There's no need to feel guilty about that. Shed the attitude that just because you make money, somebody else loses it. It's just not true. All you need to do is figure out how to tap into that flow.

Tapping the Flow

Think synergy (boy am I full of cliches in this post!). It's not really a competition. When you do well, your clients do better, you do your part to keep the economy chugging along, et cetera. Synergy is when the sum is greater than the parts. In this case, your massage + your clients' money = better lives for everybody. Really, your work helps to make your clients' lives better, and isn't that what they are out there earning money to do? Gee, I hope your guilt meter is starting to read zero by now!

Think Win-Win-Win

Thinking synergy involves thinking win-win-win. You win, your employer or business partners win, and you client wins. Everybody likes to play when they can't lose. Think of money as the tool that it is - a device to help everybody win.

Another way to look at money to develop a positive attitude about it is to look at it literally - as a means to an end. Money by itself doesn't do much for you. It's what it allows you to do that makes it important. Think about the things that enough money will allow you to do - expand your business, take that vacation you've been longing for, take scuba lessons, whatever. Look at money as a stepping stone to your goals (see my last post for more on defining success).

Parting Thoughts

Think about money differently. It is not a dragon to be slain, a mountain to be conquered. It is a tool of the trade. A necessary tool that will allow you to continue helping people while also experiencing what life has to offer. Now get out there and tap into the flow.

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Stacking Services with Massage Therapy

Would you like to be able to earn more money for your work?

The real question is who wouldn’t? There are several ways you can earn more money by increasing the value of your work – making it more convenient, offering better results with advanced techniques, et cetera. Today I’ll talk about stacking you services.

What does “Stacking Services” Mean?

Stacking services means performing more services that you can charge money for within the same amount of time. An example from my spa days was to have a base rate for a one-hour massage and then charge more for add-ons. For instance, you could charge an extra $10 for deep tissue or aromatherapy, or $15 for both together. The key here is that you are increasing revenue without increasing time.

Stacking services is a way to become more efficient with your time. Let’s step into the shoes of a spa manager for a moment. You’d know that you have a certain number of treatment rooms and that you are open for a certain number of hours per day and per week. That means that there is a certain dollar-value in revenue for each room. What stacking services does is to increase the revenue that each room would make every hour.

Doing More with the Same

The same thing applies to large spas or private, individual practices – you have a certain amount of work that can be performed and it is limited. For an individual therapist, that limit would be the number of massages one could do in a week. For a simple example, if a MT can do 20 massages a week and makes $50 per massage then they are limited to a maximum of $1000 per week. In a perfect world, this MT would earn that much, but in the real world we know that they would seldom be fully booked and would be lucky to make 75% of that.

Now if this same MT stacked some services and raised the average profit per massage to $60, then the weekly income would go up by 20% without working any extra hours. Nice improvement!

For a real-world example, at my old spa, we charged an even $100 for our base one-hour service, a one hour Solace Massage (more on branding later), but our average billed service ran $128 for an hour. All due to stacking. Needless to say, this improved our profitability by 28% without any more hours.

What Can I Stack?

The key to stacking is to do more things in the same time frame. It is fairly common for massage establishments to charge more for specialized massage treatments that require additional training – clinical deep tissue, pregnancy massage, manual lymph drainage, hot stone therapy, and so on. This reflects the fact that fewer people know how to do it. Do you have skills that you could charge a premium for? If you are looking to acquire some skills, find a good balance between what you want to do and what your clients are looking for. If you don’t know what your clients really value about your work – find out! Here are some examples of things you can stack easily:

1. Hot Stone Massage
2. Aromatherapy
3. Deep Tissue work
4. Sports Massage
5. Reflexology
6. Body Treatments – Exfoliations & Body Wraps
7. Eye Zone treatments
8. Signature treatments (i.e. your specialty scalp massage)
9. Postural Evalutations

This is by no means an exhaustive list. Do some brainstorming and think about what you can do to add value for your clients. Will they all jump to take advantage of your add-ons? No, but if you really take into account what they want and look to you to deliver, these add-on services can tailor their treatment to even more perfectly fit their needs.

Adding Time

Another relatively easy way to increase the efficiency of your time is to increase the length of your service. I found that when I was doing outcall massage to the hotels in San Francisco that maybe half of the time if the client had booked a one-hour massage and I asked if they would like to go for a 90-minute session they would say yes.

Now this is different than stacking because it actually does take more time, but especially for outcall massage it is more efficient because it maximizes your travel time.

You see, it would take about 30 minutes to get to and from each appointment for me. That meant every appointment actually took me 2 hours for a one-hour massage. However, with the upsell to 90-minutes, I got paid for 90-minutes of 2.5 hours instead of one-hour out of two. That’s 10% better. You’re already there, so why not make more while you’re at it?

The only problem with this one is when you’re already working close to your limits. Adding time isn’t the best option in that case.

Wrapping It Up

Make sure that when you think of these things that you are looking at it from your clients’ perspective. What do they value about your work and how can these add-ons make it better? If an add-on isn’t a win-win for both you and your clients, don’t do it. They’ll resent it and feel you are trying to gouge them if it only works for you. And you’ll resent having to do it if it only works for the client. If you own a massage business, it has to be win-win-win: for you, the client, and for the massage therapist doing the labor.

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Making a Living with Massage Therapy pt1

What to Charge for Massage

As a teacher, this is one of the most frequent questions that I get asked. The answer is $75. ;)

I wish it was that simple. The truth is that there a number of factors that go into deciding both how much to charge and also in determining if a job is going to pay you enough. As I began writing this, I realized that it is too large a topic to cover in one post, so welcome to the introduction for a series on Making a Living with Massage Therapy!

In this series of posts I’ll examine some of the factors that go into setting prices and taking jobs. There are no cut-and-dried answers to these questions. As much as my students would love me to be able to just hand them a number, it is different for everybody. Each part of this series will pick apart a FAQ (frequently asked question).

I’m sure I’ll come back later and edit this list, but here are some of the questions I’ll take on in this series:

1. Should I charge while I am in school (and how much)?
2. Will people pay $xx?
3. This job pays $xx (insert rate here). Is that good?

Your comments and questions will help to make this post and series more illuminating, so please, fire away!

EDIT: By the way, this does seem to be a hot-button topic, as described in this blog "Do Massage Therapists Work As Slaves?

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