Any business with multiple service or product categories considering a price increase
Integrated Wellness Centre
4-5 Minutes
3 Months
2026
+9% Revenue
+13% Gross Profit
+3pts Margin
4.7x vs Blanket Increase
Costs were rising. Margins were shrinking. The obvious answer was a blanket price increase — but the right answer delivered 4.7x more profit.
THE CHALLENGE
An integrated wellness centre with 130 active customers was considering raising prices across all treatments by a flat amount to improve profitability. The instinct was right — inflation and the rising cost of running a business were eating into margins and something needed to change. But the approach was leaving significant profit on the table.
WHAT GOES WRONG?
The business had a strong, loyal client base of 130 active customers averaging 6 visits per year across facials, injectables, body treatments, sauna and retail products. Retention was good. Satisfaction was high.
But inflation and rising operating costs — rent, wages, utilities, insurance — were quietly compressing margins. The business was considering a straightforward solution: raise every price by $5.
It felt logical. Simple. Fair across the board.
The problem was it treated every treatment category as equal — when commercially, they were anything but.
When we modelled the full pricing picture, the gap became clear:
Current state:
Annual revenue: $147,147 across 780 visits
Blended gross margin: 67%
Pricing was uniform across categories with fundamentally different margin profiles
The flat $5 increase modelled:
Additional revenue: $3,900
Additional gross profit: ~$2,700
Margin impact: minimal
A $2,700 profit improvement on a business generating $98,799 in gross profit. Less than 3% improvement. For the disruption and customer perception risk of a price increase, that return was far too low.
The flat increase was the easiest option — but not the right one.
BUSINESS IMPACT
The real issue wasn't the price increase itself — it was the missed opportunity that came with applying it uniformly:
High-margin categories like sauna (80%) and injectables (72%) were underpriced relative to their value and competitive position
Lower-margin categories like body treatments (58%) needed targeted improvement, not a blanket addition
A $30 sauna add-on opportunity was being completely ignored — a high-margin, high-frequency retention driver
Retail pricing was below market rate, leaving easy margin improvement unrealised
The business had no framework for understanding which categories to price differently and why
Without a pricing architecture, every future price increase would face the same problem — modest returns for meaningful disruption.
SOLUTION
A category-based pricing architecture that treated each treatment as a distinct commercial lever — delivering 4.7x more profit than the blanket increase, without acquiring a single new customer.
Built a category-based pricing architecture that treated each treatment as a distinct commercial lever:
Used competitive benchmarking to identify where price increases were sustainable without impacting demand
Introduced add-ons for service rooms currently not utilised for 120 additional uses — a high-margin retention and frequency driver
Raised average price of entire product ranges thus improving margin from 60% to 65%
Modelled the full impact across revenue, margin and gross profit before implementation
OUTCOME
Metric | Current | Optimised | Improvement |
|---|---|---|---|
Margin | 67% | 70% | +3 percentage points |
Margin efficiency | — | — | +4% |
vs flat $5 increase | $2,700 profit | $13,078 profit | 4.7x more profit |
Total business uplift: 13% — without acquiring a single new customer.
A blanket price increase is the simplest pricing decision you can make — and usually the least profitable. Every business has categories that are underpriced relative to their value, and others where price increases would damage demand. Pricing architecture is about understanding which is which — and building a structure that maximises profit across the whole mix, not just adds a number to every line. If your business is considering a price increase, the question worth asking first is: are you increasing the right prices?"
