Unlock the secrets to a flourishing salon with our latest episode where we dissect the complexities of strategic pricing. We promise you'll walk away with a toolkit of smart pricing models and communication tactics tailored for the unique landscape of the salon and spa industry. Discover how to steer clear of revenue-draining pitfalls associated with package deals, and learn why a one-size-fits-all approach can't measure up to a well-crafted, service-specific pricing strategy. We don't just talk numbers; we also delve into the art of service descriptions, sharing how the right wording can transform a simple service into an irresistible offering.
This conversation is brimming with actionable insights, from the way you should frame consultations to the rhythm of price adjustments that keep your business in step with market trends. Hear from industry experts who shed light on tools like salon scale and Vish, which help pinpoint the true cost of services, ensuring you never undercharge. We tackle tricky topics like price hikes and credit card surcharges, wrapping up with compassionate strategies for communicating changes to your clients. Tune in and empower yourself to craft a pricing strategy that's as sophisticated and bespoke as the experiences you provide in your salon or spa.
Do you have a question for Blondes in Business: Luxury Beauty Business Podcast? Send a text or leave a voicemail at 855.650.3445 or send us an email to hello@thephdprogram.com. We would love to hear from you. Start growing in business and leadership with powerful tools, advice and resources in your inbox every week: Learn more about The PHD Program Events:
Unlock the secrets to a flourishing salon with our latest episode where we dissect the complexities of strategic pricing. We promise you'll walk away with a toolkit of smart pricing models and communication tactics tailored for the unique landscape of the salon and spa industry. Discover how to steer clear of revenue-draining pitfalls associated with package deals, and learn why a one-size-fits-all approach can't measure up to a well-crafted, service-specific pricing strategy. We don't just talk numbers; we also delve into the art of service descriptions, sharing how the right wording can transform a simple service into an irresistible offering.
This conversation is brimming with actionable insights, from the way you should frame consultations to the rhythm of price adjustments that keep your business in step with market trends. Hear from industry experts who shed light on tools like salon scale and Vish, which help pinpoint the true cost of services, ensuring you never undercharge. We tackle tricky topics like price hikes and credit card surcharges, wrapping up with compassionate strategies for communicating changes to your clients. Tune in and empower yourself to craft a pricing strategy that's as sophisticated and bespoke as the experiences you provide in your salon or spa.
Do you have a question for Blondes in Business: Luxury Beauty Business Podcast? Send a text or leave a voicemail at 855.650.3445 or send us an email to hello@thephdprogram.com. We would love to hear from you. Start growing in business and leadership with powerful tools, advice and resources in your inbox every week: Learn more about The PHD Program Events:
Welcome to another awesome episode. We are excited to be diving into pricing pitfalls today. What are some common areas that really can be a challenge inside of the salon and spa industry?
Speaker 2:
Yeah, you've probably heard it 2,372 different ways, like how do you come up with pricing? So we want to look at some strategic pricing for salon success. And how do we even start? Where do we even start when it comes to creating that price? Because if you were me back in the day, maybe 19 years ago, you kind of reached for the air and you're like, oh, that price sounds good. Or the person down the street is charging that price. I think I'll charge that price. And so to really have that scientific, engineered understanding of why we price the things the way we do helps set your salon up for success.
Speaker 1:
Yes, I love that you said you were just reaching in the air for pricing, because I would imagine that anybody could relate to that really, because once upon a time, before you did understand all of the basics of creating your pricing inside of your salon or spa, that would be the way that you would gather pricing is.
Speaker 1:
You would maybe look it up, or even a long time ago, you would actually have to call places to see what they were charging for different services and you'd go oh, maybe we'll do it a couple dollars cheaper or a couple dollars more or whatever it was. But truly, like Jen mentioned, there is some science behind it and you want to make sure that your community can support the pricing that you're charging and that you're not pricing yourself out of the market or leaving anything on the table. At the end of the day, you want to be able to deliver that value that your guest deserves to receive. And so when you really dive into those basics of pricing and start to understand what does your market look like, what are your client demographics, that can be the starting factor to coming up with an amazing pricing structure.
Speaker 2:
Yeah, and so I think it is important to look at those things and just to look for competitive prices, client demographics and then to decide what is going to be the best pricing model for your salon. There's a la carte, which would mean everything is separate, there's packaging or everything is bundled together, and there's membership. So I would say there's pros and cons to all of those. At the end of the day, you have to understand your finances, what your break even is, how much money you need to generate, and that should help you determine, like, what's going to be the best pricing model for our salon company to thrive.
Speaker 1:
Mm-hmm. Yes, because you know really, when you understand which one of those methodologies or models that you want to use inside of your company, you know that can really help you understand, like once you've done all that market research to see kind of what that pricing is. But then you also have to factor in what kind of service do you want to be able to deliver? You know, are you trying to create an experience so exceptional that everybody leaves feeling beautiful inside and out, or are you trying to be, you know, a super fast cut and clip type of place? You know, and you know there's nothing wrong with either model, but just getting really clear on who it is that you want to be and how you want to show up inside of your community and the world will really help you get some clarity on that pricing structure so that you can know, when you're doing those demographics, where you should fall and you know how can you service multiple people in multiple different types of demographics and still have it be a win-win-win.
Speaker 2:
Yeah, and you know one thing we've worked with salon owners before that do package deals and you know, if you really reverse engineer those and you look at it a lot of times, what we'll find is people are discounting maybe a treatment, they're getting a free treatment by getting a color, you know something that they really don't pay for and at the end of the day, like that still is a service.
Speaker 2:
So, like like Lindsay was saying, is really just truly thinking about like who it is that you're serving? Are you going to be that discount salon or do you really want to create that luxury experience? Because we, what we found is it was costing the salon $26,000 a month to be doing these package deals that they were losing money on. So think about what would you do with the extra $26,000 a month? And so to really understand, you know again, like hey, what model is going to be best for me? That if I am going to do that package deal model or that packaging or packages, whatever you want to call it that it really is a win-win for the guest and it is a win-win for the company and the service provider as well.
Speaker 1:
Yes, you know, and I think too, aside from leaving that $26,000 a month on the table, you know the guest sometimes isn't even aware that you are giving them such an amazing gift during their visit. You know so they don't even put value on it, they don't see the value of it. And so you know, when we, when we look at all the do's about pricing, you know we really want to emphasize the value of our services versus competing on price alone. You know, because there's always going to be somebody who's less expensive, more expensive. You know, it just depends on your market and what you're serving, but there's always going to be somebody who's less expensive. You know, and I think you know, jen, you tell the Walmart story beautifully about how Sam Walton, you know, originally, was on a mission. What was his original mission? Now I can't remember.
Speaker 2:
Yeah, you know, off the top of my head it was to serve. It was something about serving, serving the community in a big way, and those were his exact words. But he truly wanted to create a space to serve people, where they could come shop in one place and, you know, have what they needed and build that community.
Speaker 1:
Yeah, and then eventually over time it turned into they were just competing on pricing alone.
Speaker 1:
And I know you know you've told the story beautifully before but really about how many lawsuits then started happening and just the chaos and confusion inside of the Walmart company?
Speaker 1:
You know, not that they weren't profitable, but probably not as profitable as they once were and they were definitely on a different mission. And so you know, when you're looking at your pricing and you're thinking about the things that you do want to do, you know make sure that you think about, like, what is the mission that you're on? Because you know if you're going to compete on pricing alone, eventually you'll turn into the to the Walmart's of the world and you know that's a like. Somebody can always outdo you there. But when you're, when you're really emphasizing the value that you're delivering, that's something that you can always constantly be upgrading, but that's a. That's a thing that not too many people are focused on and the affluent market is really highly aware of how they're treated in places and the value that they're getting delivered. And you know usually that's money's spent a lot more freely inside of that market and you know it can just really create a lot of abundance for all.
Speaker 2:
Yeah, and I love that you said that and it's always thinking about the a la carte method too. Our methodology is the dues of that our people will be like. Well, I don't really like that idea because it makes our receipt four pages long, four pages of exaggeration. But, like you know, words have power and so really, at the end of the day, like you can combine two treatments and have this beautiful name where it's called, instead of it saying like fuzio for 42 and old plex for 35. It can say transformational treatment, instead of saying highlight, add, gloss, add, gloss and gloss.
Speaker 2:
You know there's, there's a maybe it's called the the better bonding service or the best bonding service or whatever it may be. So I think you know, at the end of the day, just understanding your why and understanding what are the words people want to to hear, what are the words people Really get excited about, that they're one eager to pay for, and so when it comes out of that a la carte, the dues of that, you are to really just empower the words that you're using. You don't have to separate everything out on a receipt but to leave that guest feeling inspired and saying, wow, I got that the best blonde ever look, which could be really like a highlight four ounce. It can really help Create clarity for not only your team, but for your guest as well.
Speaker 1:
Yes, because words truly do have so much power, you know, and and Really, when you're, when you're breaking that down, once you've added those words in, you know really making sure that your price per minute Makes sense. That's something that we dive into deep inside of salon business school and the PhD program. But really helping people understand that price per minute so that they're not, you know, giving away certain services and then other services they could be, you know, potentially creating a lot more profit. You know, we really want to understand that price per minute so that we ensure fair compensation for the time because we are in the business of selling time and and just truly making sure that we are, you know, in exchange with our guests for that expertise that we are delivering to them during that service.
Speaker 2:
Yeah, and so the other thing you want to make sure, too, is that you just have clear communication with guests what they're paying for. You know, we're big, big believer in Consultation is your greatest asset when it comes to guest experience. So it's, it's no more. What do you want to do today? Like that, I think that just does not Showcase the value that we can give as service providers. It's, you know, what's most important to you today. Like what, what are your hair and skin goals? Like really asking those questions like that and then actually creating that plan. You know, showing that investment to the guests. Like, hey, if we do everything that we talked about today, this will be in our investment, not our price, but our investment. You know, are you ready to get started? I'm excited to work with you, and so I think presentation being clear so that there is no sticker shock At the checkout counter is, the more clear you could be about that with the guest, the more enrolled.
Speaker 2:
And what's the worst thing that could happen? Someone could say, hey, I can't afford that and that's okay. Plan B, like you can you can always create a new plan, and so I think it's it's just really, it's authentic and it does it with integrity, if you really just up front, just showcase that to the guest. Hey, this is what our visits gonna look like today, and I'm really excited to make your hair skin dreams come true.
Speaker 1:
What a beautiful way to present that, jen. You know. Another thing that you want to keep in mind, too, when you're thinking about the dues of pricing, is to just make sure that you're Regularly viewing and adjusting your pricing based on, you know, your local demographics, cost demand, market trends. You know that's something that we we view a lot with our Members, and just to make sure, hey, we're doing exactly, you know, as we're supposed to, based on all of those different things, and we are always looking for ways to upgrade the value that we're delivering.
Speaker 2:
Awesome. So let's talk about some don'ts of pricing. You know there's dues and there's don'ts, and so one thing we want to look at with don't is I know I've been there before hello ShadesEQ gloss. I think we used to give the whole town free ShadesEQ glosses. But you know, avoid underpricing your services, like you want to have that perceived value. But also think about a parts in service, parts in labor calculator, not calculated but cost, parts in labor costs, so that you can really be clear about you know what it's costing you to do the service and what the actual service is costing. So whether you use salon scale or Vish, whatever it may be for you, I think that really, at the end of the day, helps you be in that space of not undercharging for services.
Speaker 1:
So I was in that same camp, jen, with giving away free glosses to every, every guest, basically. So you know, another thing that you want to really look at when you're looking at the don'ts of pricing is just the risks of frequent price changes. You know. So you really do want to build trust with your guests and make sure that they know, hey, this pricing is going to be stable. You know, I know, a couple times during the lifespan of being a salon owner for myself, you know, probably about eight or 10 years ago, we did a pretty significant price increase and then, you know, we're fairly stable there and over the last few years, you know, again went through another larger price increase. And you know, sometimes that can be scary when you are going to do a big price increase like that. But just knowing, hey, this, we have all the market research, we know that this is what makes sense inside of our community and we also know we are going to empower everyone on the team to make sure that they are really delivering on our mission Any time you're about to unveil a price increase.
Speaker 1:
You know we don't believe in putting up a sign saying, hey, you know there's a price increase. You know it'd be like going into the grocery store. They're not like when you're about to grab a gallon of milk. They're not like. Hey, by the way, that went up 69 cents. You know they just you buy your groceries, you do that thing, you know.
Speaker 1:
And of course, anytime you do a pricing creates, we always recommend just say if you catch anyone off guard, hey, just so you know we're going to charge you the price that you're accustomed to paying and on your next visit this will be what our new pricing is. We really value having you as a guest in our salon company and you know we're grateful for all the years that we've been able to work together. So just make sure, hey, you're not doing this every six weeks or six months. You know, kind of make sure that it's a stable thing when you are going to do a price increase. And then, you know, set your team up for success on the other side of that, so that they have the language, when speaking with guests, to really feel confident and know that they are delivering that value.
Speaker 2:
Mm hmm, I love that, and you know. Another thing to think about is there's facts and opinions when it comes to passing on credit card surcharges onto the guest. The fact is, as a business, you're going to have to pay credit card fees, whether it's you or the guest, and so we're going to view it through the lens of just our opinion of why we think that that can greatly impact client satisfaction and loyalty when you do pass that credit card surcharge on for the guest. Because, at the end of the day, when you truly understand who you're serving, like I don't know, I just feel like I'm kind of a part of that affluent market, and when I shop places and they're like, hey, by the way, here's 3% surcharge on credit card, I'm like I really don't care about that, like I just want to know, at the end of the day, that the perceived value that I'm paying for is there and that's what's most important to me. So when you think about that affluent market is I really just think that sometimes that can create a negative impact and a subscarcity, and people as well as like, like, if you have to, if you need that credit card surcharge passed on to the guest, like, look at your pricing, maybe increase your pricing.
Speaker 2:
There's different ideas and ways to view it besides putting that 3% surcharge on a receipt, because it does raise some red flags for people and you know, at the end of the day, our true goal is to serve guests and serve guests in the most beautiful way possible. And yeah, we get it. We've got credit card fees. It's part of doing business, in my opinion. But, like, let's don't focus on that, let's focus on creating that experience so exceptional that we create raving fans. We are the next apple of hair salons. People are like beating down our door for the newest, latest and greatest haircut or skincare facial. So that's one viewpoint when it comes to passing on credit card surcharges on to guest.
Speaker 1:
Yes, I think that that's a beautiful view and if you're struggling, if you think credit card fees or something that are standing in your way, feel free to send us an email hello at thephdprogramcom and we'd be happy to look and see if there's other opportunities for you to look at inside of your business that could create some more profitability. That doesn't have to look like your nickeling and diming, I guess. And so great, you have all this wonderful information. Now let's talk about how do you implement that price change. We've kind of gone over some different things. Jin talked about what's some language that you can use on that receipt that a guest could see, because when you're delivering that higher value, the language that you use is gonna be part of it.
Speaker 1:
Another thing is you wanna make sure that you're communicating this price increase effectively and empathetically to your team and then also to the guest. We're not gonna put signs up or send out an email or create that scarcity. It's just truly speaking with the guest and saying let's go over your investment today and then just talking about the new investment, because sometimes people will or won't remember the old pricing, and it's okay either way if, again, if someone is caught off guard by anything that you say. If they say, oh, I thought it was this price. Last time, absolutely, we did take a price increase, and so we are happy to pass on our previous pricing for you during this visit and just so you know, next time this is what your investment will look like.
Speaker 1:
And it's also an opportunity to where, if somebody can't, for some reason, take that promotion with you, it's a great time to introduce them to another stylist on your team or another esthetician, massage therapist, whatever that might be. So price increases can happen with anytime somebody gets a promotion to the next level or if the salon as a whole is coming up with it, and so you just wanna make sure that you are creating that team environment that people know. Hey, I can see any service provider in this salon, and so if, for some reason, level six pricing isn't working for me anymore and level three pricing feels better, I have the opportunity to meet some different service providers on the team that can help me at an investment that feels like a comfortable place.
Speaker 2:
Awesome. And another opportunity to look at as well is just like, when you do have that price increase, what is the added value, what's the enhanced value to improve that service? Like it doesn't have to cost you anything at the end of the day. But again, like people want to know that what they're paying out, they're getting that value in return. So maybe it's that you had a pop of lip gloss on after the service, after a facial or hair service that doesn't cost you anything. You probably have the makeup there already.
Speaker 2:
Or maybe that it's just a extra little hot towel, or maybe it's an extra little neck massage or a neck warmer or blanket at the treatment room. So always like to look at that as like, if we are going to do a price increase, like what will the guests feel is the points of difference with that price increase? Because I think that's a lot of times why people leave salons is because the price keeps going up, but the experience does not go up with it, and so those two have to be married together where you really to create that loyalty and for people to be like, hey, I get it, prices increased, but that experience has increased and that's a win-win situation at the end of the day.
Speaker 1:
Yeah, and if you're also introducing any sort of new services or packages, that's a time where it's a great thing to celebrate. And so really making sure that you're setting that up in the right way with your guests so that they can say, hey, we have this amazing new hair, spa treatment or whatever it might be, and showing them hey, here's the pricing. It really does just come down to the way that you communicate. If you are communicating things in an abundant mindset or in a scarcity mindset, either one of those mindsets is going to be passed on to that guest or to your team, and so really making sure that, hey, we are focused on that value delivery piece, we're focused on creating an amazing experience for each person that walks in, and we know that we have to stay in exchange with the money that we are exchanging with our guests. And so when you focus on that, have the abundant mindset. Usually it eliminates all those pricing pitfalls and creates an amazing experience for both parties.
Speaker 2:
Awesome. So if you're loving this and you're thinking, wow, this all sounds great, but what is my starting point? Salon Business School might be right for you, so just shoot us a message. Hello at thephdprogramcom. If you want to learn more. We have all kinds of tools and calculators. Based upon where you're at, what your average household income is, what's most important to you, based on your profitability, where we actually can plug and play and create that root system of your business so that there's no questions when it comes to pricing.
Speaker 1:
Yes, so thanks for tuning in. If you know somebody who could really get some major support from this podcast, send it over to them. We would love to hear from you. Thanks for tuning in.
