Posted on October 20, 2015
Alex B. Jones
For many salon owners, there’s nothing more perplexing than how to price their salon services. In fact, many of us fear “getting it wrong” so much that we underprice our services, leaving money on the table and jeopardizing the very health of our business.
Well, don’t fret. The truth is there’s no such thing as the “RIGHT” price. So, don’t worry about getting it perfect. Perfect doesn’t exist. Strive to reach a healthy balance with optimal pricing. Optimal pricing is getting the highest price possible for your services and your clients leave feeling as though they’ve still received great value.
There are many different pricing strategies. Here are three questions to ask yourself when pricing your services.
First, does your pricing generate profit sufficient for you to meet your salon business objectives and have enough revenue for growing your business? Examine your monthly expenses including a fair salary to yourself and return for the business risk you take on as a self-employed business owner. Be sure your monthly revenue covers all your business expenses including your salary and provides additional revenue to reinvest into your business for things like salon upgrades, education for you and your staff, or purchasing equipment and software which will improve your ability to enhance your client’s salon experience.
Secondly, does your pricing attract the “ideal” clients you want to do business with in high quantities? Analyze your “ideal” clients’ habits. Do they come back to the salon when they should to maintain their great haircut, color or style with no problems? Or do they stretch out their visits? Do they purchase retail? Do they tip well? The answers here may be small tell-tale signs that your pricing is off. Try adjusting the price of your most popular service with a “promotion”. Using a promotion instead of lowering your price allows you the flexibility to offer an incentive for clients to come in more often without making it a more fixed discounted price.
Finally, look at your booking percentage. Do you have a flood of clients and very little space on your appointment book? Are clients having a difficult time getting in to see you? It may be time for you to increase your prices if you are consistently at least 85% booked. Optimal pricing will likely cause some clients to leave, which is part of the goal. If you increase your prices and 10% percent of your clients don’t leave, then increase it again until they do. This is only if you are more than 85% booked. You’ll receive more revenue from those who remain and from the new clients who were having difficulty getting in with you before.
Pricing your salon services and products can be challenging but not impossible. Addressing these questions will set you on the right path to better pricing, higher profits, and more freedom to live your dreams.
About the Blogger: Alex B. Jones, M.B.A. is owner of Revive Salon in Sola Charlotte and Business Performance Coach who helps salon suite owners and their businesses perform better so they can finally live their dreams.
For more from Alex B. Jones, The 6-Figure Coach, please visit alexbjones.com.