Reboot your salon pricing
It’s a wonderful thing, the salon world. It's sparkly, ever-evolving, transformational and a truly beautiful industry to be part of. We are so lucky that we can bring our passion to life and spend time looking after our gorgeous clients. But, (because there is always a but) this ONLY works IF you can get your numbers right. Your salon pricing is fundamentally the biggest building block of your business, and now, more than ever, we need to have this in hand.
Pricing is the core of your business
You MUST get your pricing right. The price to deliver a treatment is not the price of the product to deliver that treatment.
When your brand supplier gives you that helpful spreadsheet that suggests it costs £5.57 to deliver that facial, here is your reminder that it does NOT cost £5.57 to deliver that facial.
You also must factor in – property costs, bills and utilities, software costs, staff costs, cleaning costs, consumables, rates, taxes. These are all part of running the business and must all be considered when pricing the cost of a treatment. If you fail to get these numbers in place, you may well be running treatments at a loss.
The cost of living is rising. Everyone is struggling with it. And people are unhappy. Now, we are in the industry where we like to ‘fix’ people. We like to make them feel good. So, when we see our Facebook feed full of negativity around increased prices, it’s in our nature to go against the grain and be the hero of the story, and NOT put prices up.
The thing is, our prices are going up. The cost of products, delivery, consumables, utilities, services – they are all increasing. So every increase in cost we have to pay, means we are scooping our own profits right out of our own tills and effectively throwing that money away. Price increases are how the economy works. It might be negative because things cost more, but also, people earn more. It’s negative because house prices increase for buyers, but it’s positive because house values increase for sellers. It’s always a 2-way street. And as your costs go up, so must your prices.
Take a moment to review your stock costs. There is a chance you have totally underestimated how much your product supplies have increased! Most salons don’t order the exact same stock month in month out. This means we often don’t notice those subtle price changes that the companies deliver – and very often, they don’t inform us. But you have full access to that information, so take the time to understand where you were then, vs. where you are now.
Take a look back at previous order sheets and see how much your costs have increased. Are these reflected in your prices?
Now, these are the practical bits. The number bits. The bits your accountant wants to see. But your pricing gets deeper than just the numbers on the reports at the end of the month…
Your competition is not your pricing guidance
Once upon a time, it was standard practice to use your local competition to set your prices. Local salon charges £10 for nails? I will charge £9.75 and take their business’ is what people used to say. Now, though, we know this to NOT be an effective way of pricing a treatment – for 2 main reasons.
We have zero idea as to where they got their pricing from.
It could easily have been plucked out of nowhere with no guidance. They could be running at a loss without realising it. Their rent may be cheaper. Their products may be inferior. There are so many factors to consider when pricing – competition isn’t usually one of the most reliable ones.
When we base our charges around another business, we make pricing the ‘point of difference’
A point of difference is key in business. It’s what makes us stand out from the crowd. But it should be focused around service, delivery, environment, experience and opportunity. Not prices.
Because if a client chooses you based on a slightly lower price, and this becomes the key decision making element for them, what’s to stop your competition dropping their price to trump you? Then you drop yours to trump them. And the cycle continues. It’s a race to the bottom. To a place of unprofitable treatments and clients led by cheap deals.
Charging your worth
When you charge less, you are sending a message that you are worth less. Your charging point relays a message about who you are and what you do. People don’t go to the salon just for the nail polish or the balayage, they go for the experience.
People simply don’t buy like for like for like. You can buy a decent handbag for £30. You can buy a designer handbag for £3,000. Do they actually do anything different? Nope. Their role is ultimately the same. But people will pay more for a label, for luxury, for quality and for kudos. Be luxurious and have the price tag. As long as you deliver more, you can charge more.
The more you earn, the more you can deliver
I see so many people struggle to charge more than they think they should or always have, simply because it makes them feel ‘greedy’. ‘I know my numbers and I am making a small profit. I am happy with that. I want to be accessible to everyone,’ they often say. This mindset ultimately limits us because we settle for ‘just enough’ rather than ‘abundance’.
But charging more is not just about paying yourself a bonus each month. It can be reinvested into the business to improve the environment, pay your team more, reward your team better, provide more training, support local causes, recruit more, and bring in new brands. The list is endless.
Ultimately, when you charge what you should be charging, your business will perform better, be stronger and give you more freedom and balance. If you consistently deliver excellence, then you can charge accordingly.