Struggling to price your services as a beauty professional? Fear not! This episode is packed with insights on overcoming the fear of raising your prices and embracing your worth. We dive into the reasons behind discounted service prices, figuring out your cost per hour, and the impact of inflation on our industry. Plus, discover the fascinating 'lipstick effect' and why people still indulge in luxurious services, even during tough economic times.
Taking care of yourself and investing in your future as a beauty professional is crucial, not only for you but also for your clients. We discuss the importance of specializing and niching down, allowing you to charge more for your services and establish yourself as an expert. Learn about fearless business pricing strategies, how to confidently raise your prices while understanding your costs, and ensuring profitability. Be prepared for those essential conversations with clients about pricing changes and take control of your financial success as a stylist!
Struggling to price your services as a beauty professional? Fear not! This episode is packed with insights on overcoming the fear of raising your prices and embracing your worth. We dive into the reasons behind discounted service prices, figuring out your cost per hour, and the impact of inflation on our industry. Plus, discover the fascinating 'lipstick effect' and why people still indulge in luxurious services, even during tough economic times.
Taking care of yourself and investing in your future as a beauty professional is crucial, not only for you but also for your clients. We discuss the importance of specializing and niching down, allowing you to charge more for your services and establish yourself as an expert. Learn about fearless business pricing strategies, how to confidently raise your prices while understanding your costs, and ensuring profitability. Be prepared for those essential conversations with clients about pricing changes and take control of your financial success as a stylist!
Welcome to the smart, wealthy stylist podcast. I'm your host, emily Cardin. Over here. We're dedicated to helping hairstylists manage their finances, stay organized, healthy and manage their time and mental well-being. We focus on staying healthy in all areas of life and maximizing productivity. If you're a hairstylist looking for these things, then this is the podcast for you. Together, we'll avoid burnout and step into being the smartest, wealthiest stylist that we can be.
Speaker 2:
Good morning. Welcome back to the Smart, wealthy Stylist podcast I am going over. Is it time to raise my prices? I know that this is such a hard topic for so many of us, including myself. Anytime it comes to pricing as a beauty professional, i feel like we are compassionate. We love our clients And, to be honest, it's really hard to put a price on your worth as a stylist and put a price on the services that we provide. It's such a personal business to be in And I've always been an emotional discounter.
Speaker 2:
I have single moms, i have retired clients, i have people who have lost their husbands And I just know. I hear about the problems that they're going through and the financial struggles And I understand that that. You know their hair is a priority to them And I feel like it's my job to you know. Give them a discount or whatever. That is so far from the truth. As I have evolved in my business and learned the about pricing and how to figure out where I need to be and my cost per hour and all these things that I've traveled through this last year, i have realized that I have cut myself short so much And I could probably already be at a debt if it weren't for the amount of money that I emotional discount my clients and have over the course of the 13 years that I've been doing hair. I don't know why, as an industry, that we do that. I think that we're probably the only service based industry that discounts like that. Well, probably not. There's probably other service based industries that do that.
Speaker 2:
And you know, when it comes time to do a price increase, why do we just totally freak out? You know I literally like had hives and like had a meltdown. Whenever I did my last price increase. It was about a year ago And I mean it was like the most stressful thing And I was, you know, telling my clients, like, okay, you know, i just want to let you know I'm doing a price increase. I understand if it's too much. Like you know, i posted it everywhere. I over explained, i had to tell them how I had a loss in my business and, like I just over explained the whole situation. No one else does that. You know we go into Walmart, we pay the prices And you know Walmart's not over there saying do you know how much it costs to get a bottle of ketchup shipped to our store? Like, do you even know how much we're having to pay our employees. Like no, like we literally just go and pay the price.
Speaker 2:
I know my myself, like anytime I go and get my hair done or whatever services that I receive as a consumer, i don't even ask them how much it costs. Like, and I'm on a strict budget. I realize that the services that I want and the providers that I go to, i want to go to the best. So, like, if I'm getting my hair done or say you know, i want to get Botox or whatever, like I'm probably bringing $300 or $400. I've saved for this. I've, you know, stashed money away, put it in an envelope. I don't even ask what my service providers are charging me And I just expect to pay whatever. So I have a lot of clients that do that And I didn't realize that. Actually, just last week one of my clients was like I don't even know what you charge, but I'm going to pay whatever you charge because you're worth it. So I was just totally in my head about that and just making it way more difficult on myself that it needed to be. And you know, right now, in this economy, with all this inflation, there's more money being printed now than there has ever been. I mean, it's like the economy is so super inflated It's just causing so many issues And It's causing a lot of people financial hardships.
Speaker 2:
Back in 2001, when the lot there was a big recession then too, and Estee Lauder came up with a concept called the lipstick effect. And It's so interesting to me to see consumer behaviors and buying behaviors, because the founder of Estee Lauder was talking about how, you know, they weren't selling the luxurious items, like they weren't selling their high dollar foundations and all this stuff. But people were more willing to commit to a lipstick. You know they wanted a change. They wanted to, you know, give them self a treat. It was, and that's what he called it. It was a luxurious treat, and Anytime there's inflation, a lot of times the lipstick effect goes into effect.
Speaker 2:
People are looking for a change. They're looking to treat themselves. You know, typically it is getting their hair done, making a change with their makeup or hair or their nails or whatever. So you are included As a service provider in That lipstick effect. So, even though there's inflation and even though there's technically a recession right now, don't think that you can't raise your prices Simply because there's this inflation going on.
Speaker 2:
So how do you know when to raise your prices and how much should we raise our prices? Well, through my experience and helping several other stylists walk through this transition, the there's three key markers. One of them is how far booked out you are. The second is are you taking a loss in your business or minimal profits? And the third is that you're wanting to shift or into a specialty or niche down. So let's go over each of those.
Speaker 2:
If you're booked way out So if you're booked out more than eight weeks and you can't get new clients in and at least two to four weeks, you're most likely in need of a price increase. If you're topped out of your market pricing and you feel like you're seeing less new clients, you'll need to up your perceived value. You will never hear me say, oh, your prices are too high, you need to lower your prices. Why don't you give a discount code? Why don't you? you know? No, you need to make as much money as you can so that you can better your future. But if People aren't willing to pay your prices, you're seeing new guests Really fall off, like you're not getting any new client requests. It's most likely because your perceived value is not there. And that means perceived value, means like what amenities that you're offering your clients, what services you're offering your clients, what is your salon space like? What is your booking experience? like you know, upping your perceived value will help people pay for their clients. You will help people pay whatever.
Speaker 2:
So, like I have fresh baked goods baked for my clients every week. I have usually one to two items for them to pick from. I have a snack bar, a coffee bar, bottled water. Every once in a while I'll even have like wine or mocktails or whatever. I do double book some. But I have a huge salon studio so people have their own private space. It's not loud, you know. It's a quiet experience. The salon is beautiful, it's clean. You know the experience is part of the service and They're allowed to book online. I have a website with all very clear pricing. I have a social media with tons of before and after pictures. All the time I have people bring me inspiration pictures off my own website or off of my revivifyemily Instagram page and You know, just having that experience for the clients is something that you really can't put a price on and You know I know a lot of you are working in salons that you feel like your growth is inhibited because The salon is loud or you know it's dirty or There's.
Speaker 2:
You know it's just not the right environment for you. Like you really struggle growing your luxury clientele or maybe you're not. You're not into luxury, maybe you're wanting to do more kids here and you're in this like you know Super fancy salon. Maybe you need to shift into somewhere That's more family friendly. You know Whatever it is that you're wanting to do, trying to figure out What your message is, who you want to be speaking to and then Looking at your salon and saying does this fit? who I'm speaking to? does this fit my perceived value? is the amount that I'm charging cohesive with what I'm doing as a stylist and what I'm offering my clients? so if you really want to raise your prices and You feel like you Aren't supporting what your prices are with what your services are, up your perceived value make you know, really stand out in your business and stand out in your niche or your specialty and Just know that It's just as dangerous to close your books because you're too busy as it is to have empty books.
Speaker 2:
If you close your books, you're a dying business. You know people move, people have life changes and When you're booked way, way out like that, it has its own problems. I am one of those people like right now. You know I've already done a price increase, i have Nitched down. I do still serve some clients that I've served for years that I really enjoy. I'm not planning on firing them, you know. And It is a hard thing to navigate because you know I'm sitting here, going okay, i'm literally already booking into the end of August, beginning of September, and we're in June. And you know now it's forcing me to come in on my days off because you know I have all these new client requests coming in for extensions, which is what I'm wanting to move more into. So it is a hard thing to navigate, you know, but going okay, i'm here. At this crossroads Is it time to do another price increase? You know. So, just evaluating your business, seeing where it's at, seeing what your perceived value is, making sure it's in line, and then you know, if you're booked way out you're going to have to make a move.
Speaker 2:
Another one is are you taking a loss in your business or even a minimal profit, once you take it into account all of your expenses and then figure out how much you let you bring home. Are you coming up empty handed? This is one of the only service industries that service providers are okay with not making money. I see stylists all the time that are proud, you know, like I was talking to one of my salon reps and she said you know? I was talking to a lady and she said I've been doing here for over 30 years and I have never raised my prices And she was proud of that, like that's some sort of a badge of honor.
Speaker 2:
If you're still charging $30 for a root touch up and you're proud of that, i'm not shaming you, but you are degrading the hair industry and you are cutting yourself short When it comes time to retire and you don't have any money and you're literally having to live off of your social security and food stamps. You're going to be wondering why you didn't raise your prices. I don't know. There are no doctors, lawyers, people working regular nine to fives that are getting you know, 401k, pension, whatever. None of those people would go to work for free. Why do we? Why are you going to work for free? Because I don't understand.
Speaker 2:
I understand that the hair industry is an industry of passion and compassion for our clients. We're full of empathy for them and you know we're holding their hands through marriages, divorce, babies, like we're in it with these people. They aren't just clients, and I completely agree. But whenever you're retiring and you're having to live off social security and you can't pay your bills and you didn't you're not debt free because you didn't have enough money to pay off your debts as you were working Are your clients going to come and take you grocery shopping? Are they going to pay your medical bills? Are they going to be there to help you because you can't afford in home healthcare? I just want you to get real with your thinking about your future and thinking about what you're contributing to yourself, because by shorting yourself today, it only affects your future. You're shorting yourself day to day and you're shorting yourself 30, 40, 50, 60 years from now. However long you live. You are shorting yourself. We have to level up.
Speaker 2:
As an industry. You can still love your clients and be compassionate, but charging them nothing for a great value is insane And things are expensive. I look at my weekly bill for my hair color products and you know all my processing solutions and all the things I know you can relate. I know you're having the same bill that I have and it's absolutely insane to not charge enough to cover your expenses and still take money home. You should be taking home a paycheck because your business should not. You should not be spending out of your business account for your personal stuff. You should be paying yourself a paycheck weekly so that you can actually have a paycheck to spend at home.
Speaker 2:
Every other industry that there is, you know, or every other job that there is, people take a paycheck home. They have, you know, an actual paycheck to pay their bills with in their personal life And I'm not talking in your business life, your actual personal life and you know whenever your price super low, typically you're very, very busy and fear can be completely overwhelming, overcoming, and I lost probably 50 clients when I doubled and tripled some of my services Last year when I did my price increase. Literally some of my color services tripled, but I was that far behind I had not raised my prices and literally well, i'm not going to be able to do that. I guess I hadn't raised my prices in 10 years. And then I did a small bump up and it still it wasn't even close to enough. And then, once I actually dug in and saw my numbers and realized how far behind I was. And then when I went into my accountants office and she said, hey, you had a loss of $4,000 this year, that was absolutely shocking. So I'm actually making a profit now and the fear of losing clients should not be bigger than the fear of not providing for your family. I just want you to think of your future. Are you investing? Do you have savings? Will your clients be there to supplement your income when you're forced to live off social security? Think long and hard on those things, because they are absolutely relevant and it is absolutely something that you should be thinking about.
Speaker 2:
The third topic is a good reason to raise your prices is because you're shifting into a specialty or you're niching down. So when you're specializing in something, you can typically charge more, especially if there's a demand for it. So I'm kind of I don't want to say transitioning into an extension specialist. I am an extension specialist. I do invisible beat extensions. I do still have some clients that don't have extensions, and that's fine. I still really enjoy serving them. So you can still serve your clients that you love, that you've done for years, and niche down because basically the only new clients I accept at this point are extension clients or curly girls. So I love cutting curly hair also. Those are two of my favorite passions. So I just don't accept anyone unless they are a curly girl haircut or they are an extension client. I am still going to service my base of clients that I have that are not my specialty, because I love them and I enjoy doing their hair and I find joy in my work. So there's nothing wrong with that. But by niching down, you can, you know, present yourself as an expert and show these people the amazing things that you can do and the services that you can provide and you know your knowledge and expertise.
Speaker 2:
People pay more for a specialist in the medical field and dental fields and you know really any field. If it's a specialist, that's all they do and that's what they really hyper focus on. I will pay more. Say, I wanted Botox, i would probably go to a person who specializes in Botox. Or, you know, if you wanted filler, you would go to someone who specializes in filler. If you wanted plastic surgery and you really wanted a tummy tuck, you should probably go to someone who specializes in tummy tucks. You wouldn't go to someone who specializes in noses for a tummy tuck. So it's the same in our business. You need to find what you're passionate about, you need to niche down. And once you niche down, you can really you know only do the services that you love and then charge more for them. People will pay for expertise. They want to know that you're passionate about it, that you're excited about it, that you're, you know, doing continuing education on it. And whenever you pay for continuing education and showcase that to your clients like, hey, look at all this continuing education that I'm doing to bring you guys the very best that I can, that brings a great value and sense of security to your clients. So, like I said, by niching down on a specialty, you can charge more for that because you're giving them a greater perceived value.
Speaker 2:
And, once again, you know the fear of losing clients who don't fit what you're wanting to shift into is unrealistic. And if you do dread them coming in or you're afraid to let someone go, fear is something you'll have to overcome. And I'm preaching to myself too. I struggle with that. I always think well, you know what if? what if they're mad at me? you know what's what if I upset them? or what if the right people don't get in my chair. Well, that's all unrealistic.
Speaker 2:
Overcoming fear is a hard thing to do, but once you do it, you realize like it is literally just a mind game. Fear is not reality, fear is fear. Fear is confusion, fear is self doubt, self loathing, whatever you know you're feeling, fear is negative. And when you're trying to make positive shifts in your life and in your business, fear will always try to come up and steal that joy or still that spark. So by overcoming fear and just saying no, i am doing this, i'm committing to this, this is what my prices are going to be, this is my goal for my business, this is my goal for my future. I am going to commit and see it through, and I know that that's easier said than done, because I'm dealing with that right now. You know, i'm just like I'm booked out. I have all these people that are trying to get in. I don't have anywhere to put them. I'm coming in on my day off. It's just like these spinning wheels, you know. And by overcoming fear and just saying, ok, you know, I've analyzed my business, i've put the pen to paper, this is where I need to be. You know, this is how many days a week I want to work. This is, you know, setting strict guidelines on your business, your hours, your prices, and sticking to it You will absolutely thrive.
Speaker 2:
So how do I go about raising my prices? The very first one is figure out your cost. You can go to smartwithystylistcom and subscribe to the website and I will send you my free cost per hour calculator. When you go on there, you can type in your expenses and how many days a week you work and all that stuff, and it will actually tell you how much it costs to run your business per hour. Then that gives you a really good sense of OK. So this is how much it costs me per hour to run my business. How much do I need to be charging my clients to make a profit or even break even, if that's where you're at? And then second is, adjust your prices per per. Adjust your prices for profit. Why even be working if you're not making a profit? There's no point in that. So just make sure that you raise them high enough that you can actually make a living and take home a paycheck.
Speaker 2:
Number three be fair to yourself. So I think it's great to be fair to your clients also. But I know, when it comes to putting a price on yourself, your services, what you're providing for others, it can be extremely difficult, especially if you're not a confident person. So whenever you do your cost per hour calculator and you see how much it's costing you to run your business per hour and you say, oh my gosh, i'm going to have to be charging, you know, two hundred dollars for this service to make any profit, don't self doubt yourself. There's truth in numbers and You have to charge what you need to charge to make money. Don't put a price tag on your self worth.
Speaker 2:
Number four be prepared for a conversation. So this is the hardest one for me. I don't know if you guys can relate, but having a face to face conversation with someone and saying, hey, you know you're so valuable to me. I hate that I'm having to do a price increase again, you know whatever? Well, if you show weakness in your conversations, it can cause your client to feel uneasy about committing to the price increase.
Speaker 2:
And so whenever you introduce your price increase to your clients, i want you to be very matter of fact and secure. Stand up tall. You know. You don't have to say you know, i'm really sorry. There's stuff so expensive and I just I really I'm, you know, don't do that. That's what I did the first time And I'd be like I took a loss on my business and I did this and and I'm not making any money and da, da, da da, you know. No, they don't need to know all that. Because you're taking continuing education. You are giving them the best amenities and services that you have to provide. You're giving them a great service. Do it with confidence. You know your prices are worth what you're charging and you can announce it with confidence.
Speaker 2:
So when you're preparing for a conversation, the first thing that you should do is email your clients. You know, just let them know. I'm implementing a price increase. This is what my new prices are. These are the packages. This is what they include. Thank you so much for being a client. If this is not fit in your budget, please let me know and I'll refer you to someone who will fit in your price range. Very clear matter of fact. And then post the same thing on social media. Canva is a great way to make social media posts, instagram posts. It has email templates and you can get a lot of that for free, but I do pay for the pro version, because then you can keep your branding consistent through all your social media stuff with the same texts, fonts and colors and all those things. But so, email first, post to social media maybe put a little pricing bubbles in your highlights on Instagram and then post a sign at the salon. You can put a sign on your mirror or, you know, like a menu on your table on your salon station.
Speaker 2:
And then, number four, the hard one is have a face to face conversation and just say you know, when they sit down in your chair Hey, lisa, i just wanted to let you know that I will be doing a price increase, so next time your service will be $250. That's all you have to say, you know. And then kind of read the room. You know if they are feeling uncomfortable, you can say you know, i know that seems like a lot And if that doesn't fit in your budget, i completely understand it And I would be glad to refer you to someone who. It will fit in your budget If you're booked way out and you know it may not be a bad thing to lose a few people, especially if they aren't your target market, if you do lose some of your favorites or some of your target market clients.
Speaker 2:
That's okay, because there will be other people that will be glad to pay your prices. That will be your clients soon, so don't get too up in arms about that. And then, um, the fifth way to have a conversation with them is to remind them at checkout. So let's go over that again, email and then post to social media, post to sign at your salon, have a face to face conversation and then remind them at checkout. So whenever you're checking them out, just say, okay, just a reminder, next time your service is going to be $250. And then you make their appointment and they are out the door. So I know that that's hard, but I know you can do it.
Speaker 2:
And then the very last piece, um, to go about raising your prices, is do it. You have to actually take the leap and follow through what you've committed to. I am the worst about that, i will. You know. I have all my stuff typed up, i have all my social media posts created, i have all the things ready to go, but I have not committed. And even on mine, like, i'm not doing a huge price increase, but I have some clients that I've been charging $120, which is what I charge for my base color, and they're getting a full head foil. Well, my full head foils are $190.
Speaker 2:
And you know I have a retired teacher, i have a single mom, you know I have several people that it just totally cringes me out to think that they're going to have to pay $190 to get their hair done and that I may lose them. But I love them so much. You know, i love them as people, i love them as clients. But I have to make an executive decision in my business to say, yes, i'm compassionate for these people, but I have to do what's best for my business. They are not going to be the ones paying my bills. They are not going to be the ones investing into my retirement. They are not going to be there for me whenever I retire. It's me. I have to make sure that I'm taking care of myself financially to better myself, better my children's future you know better mine and my husband's life that we're creating. It's a difficult decision, but I know that it's the right one And by committing to follow through what I started, i know that will bring me a great deal of peace and joy.
Speaker 2:
So I want to encourage you to do the same. If you are in need of a price increase, follow these steps and do it. I believe in you. I hope that you believe in yourself and that you know that you're worth every single penny that you charge on your services. So I hope you guys have a great day and I will talk to you next week. Let's get to raising those prices. Thank you for listening in today.
Speaker 1:
If you have a burning question or a topic you want me to cover? leave a review and ask the question in the review. This is the best way to get your questions answered. Just remember you are a smart, wealthy stylist and you are capable of anything you set your mind to. I'll catch you later. Don't be a stranger.