Strategic Pricing for Massage Therapists

Do you charge the same amount for every 60-minute session you perform?

On the surface, pricing a service seems like a simple, straightforward thing. Most arrive at a number based on what they feel a “market rate” is, and then adjust a bit based on how qualified they feel they are compared to the average therapist.

Ta-da! That’s the price, forever.

Is that all there is to it? Or is there a better way that would result in your practice generating more income?

There most definitely is, and every practice owner should be thinking about this question seriously, as the result can mean a difference of thousands of dollars over the course of a year.

Most people think of pricing in terms of supply and demand, but when it comes to massage services, I think they’re wrong. Not completely wrong, just long-term wrong.

Let’s walk through a case with a consumer, and I’ll explain what I mean.

Introducing Carrie: Carrie is a 40-year-old woman who is feeling stressed out from a hectic schedule at home and work and just. needs. a. break!

So, she hops online to look for a massage. The spa is asking $120—too much for Carrie! Several independent practices show prices between $60 and $80—that’s more like it.

Carrie looks through these and finds a place with 3 reviews and a price of $30—nope, that doesn’t feel right.

Eventually she narrows things down to two highly reviewed practices that are located nearby. One shows a price of $70 for an hour massage, and the other shows a price of $80. Both offer availability when she’d like it—BUT—the more expensive place offers a first-timers special of $60.

Guess which one Carrie’s most likely going to choose?

That’s right—she’ll choose the first-timers special and not only save $10, but feel great because the perceived value is higher ($80).

Carrie receives her massage and has a great experience. She was impressed with the therapist’s work and leaves the practice feeling a sense of calm and balance she hasn’t felt in a long time.

Fast forward two weeks later and Carrie’s feeling the need to schedule another massage. 

Which of the two businesses does she choose?

Does she go with the $70 option with an uncertain outcome, or does she choose to pay $10 more and go with what she knows will be a great experience?

The probabilities strongly favor that Carrie will go back to the place she went to the first time.

Uncertainty and change are stressful. $10 is not enough to compensate Carrie to deal with the risk that the other therapist isn’t as good or personable, because then she’d have “lost” $70. In Carrie’s mind, the risk of losing $70 and dealing with more stress is way more painful than paying an extra $10 for a known positive outcome.

What’s the point?

That we shouldn’t look at pricing as being fixed, or feel that discounts should be avoided because they cheapen the perceived value of the service being received.

Used correctly, changing prices to encourage different types of behavior is a proven way to maximize long-term income for a practice.

Looking at the long-term effects of implementing the pricing strategy of the first ($70) business and the second ($80) business, you can see that not only will the $80 business attract significantly more new clients over time, they’ll also end up making $10 more per session on repeat visits, resulting in a huge difference in income over time.

The above is only one example of how small differences in pricing strategy can achieve huge differences in income over time for a massage practice of any size.

Another example of how modifying prices can create long term benefits for a business starts with a question:

If I gave you the option to choose between receiving $200 right now, or a 75% chance of receiving $300 in four weeks, which would you choose?

Most people would choose receiving the $200 today with no risk, even though the expected value of waiting would be $25 higher. (.75 x $300 = $225)

What’s this have to do with pricing services in your practice?

Many practices refuse to modify their pricing when a client wants to purchase a series of sessions. Here’s why this should be reconsidered:

The (false) assumption is that a client will keep coming in at the same frequency (i.e. once a week), no matter what, for eternity. In this case, the probability that a business will receive all the possible future income from this client is 100%.

We all know that’s not how things work. Clients miss appointments, forget to book another session, or decide they want to try something else. $200 now (to purchase a series), or a 75% chance of $300 later (client coming in like clockwork). It’s the identical question asked earlier.

In this example, offering a moderate discount for the up-front purchase of a series of multiple sessions does two beneficial things:

First, it increases the probability to almost 100% that the client will return until their session credits are used up.

Second, in my experience as a practice owner, it tends to increase the frequency that clients come in. Most of my clients would book all of their pre-purchased sessions out into the future.

Third, the fact that these folks were coming back with regularity not only made my schedule more predictable, the sessions at regular intervals became a habit for clients, increasing the probability that they would continue even after their session credits were used up.

I’ve given two examples above of simple pricing strategies any practice can implement, but there are countless other ways. Take some time, look at how massage therapists near you are pricing their services, and come up with your own plan that gives you an edge.

If you have your own practice, tap into the entrepreneurial spirit you already possess and run some pricing experiments—until you find a combination that results in the (longer term) outcome you’re looking for. 

Mark Volkmann is CEO of MassageBook.