How pricing impacts your business and your relationship with your clients
Pricing is one of those topics that is on the forefront of so many stylists and owners these days Whether it be pricing services, communicating price to your clients in consultation, or having a price increase. We want to walk you through it so you feel confident behind the chair.
Nina Tulio: When it comes to pricing services it’s not as easy as throwing a few numbers together. There are a few ways you can calculate pricing. But the way I teach pricing is a bit more in depth and based on facts and not feelings. Here are the 5 factors to take into consideration when pricing your services.
- Time- How long it takes you to complete each service
- Product- How much product is used on each service
- Target profit. Which is at least 50% for suite owners/renters and at least 20% profit for commission salon owners.
- Total business expenses
- Demographic
Where we tend to go wrong at times is when you base your prices off of a FB group, friends down the block and mostly your feelings. I say we because when I opened my salon I used a few of these tactics as well. What I really want you to understand is pricing is a business decision that affects your business long term. If your pricing is under $10 and you see 20 clients a week, you just lost $200 per week and $10,400 per YEAR in revenue. Which leads me into my next category: Price increases. If you haven’t had a price increase in over a year/year and a half. It’s time. Cost of goods has increased and if you are charging what you did 2 years ago. You could be losing thousands of dollars per year in sales.
How does your pricing affect your business?
- Your sales.
- Your profit.
- Your schedule.
- If you are undercharging you are losing money in sales.
- Your profit can potentially be lower.
- You are most likely working WAY harder than you have to. It’s time to think of pricing as a business decision and not an emotional decision. Think of all the time, money, and energy you put into your business on a regular basis. You deserve to make more money, more of a profit and work less.
Jladner: Now let's dive into transparency ….
Transparency is a crucial part of your business as a stylist behind the chair. When you're transparent, you invite trust by revealing that you have nothing to hide. You establish yourself as an honest, and trustworthy person in the eyes of your guest and it allows you to build credibility.
When it comes to price; your guests want to know what it takes to achieve their hair dreams. This is where transparency comes in! Here are a couple tips on why it’s so important.
- Consistency. Just like your daily life, there is a “budget” that is set in terms of what you spend and what you see value in. Being consistent with your price will gain loyalty and have your guests coming back.
- Conversation. It’s your role as a professional to have conversations about price. Instead of asking your guests what their budget would be; let them know what services you offer and what they cost. Let your guest determine the price, not you. There is credibility in mastering the consultation conversation!
- Less stress, more hair dreams. As we know, it can get emotional. We are your guests' safe space in most situations. It’s our role to serve and to handle the price first and slay later. It allows for less stress. What you will find is that your guests are ready! They trust you and that transparency of price is the stepping stone to building a long lasting relationship!
Transparency is everything in business and we owe it to our guests to lead with compassion and serve with clarity. You got this! Roadmap and plan!
If you are looking for more information on how to raise your prices and more tips on pricing. CLICK here to check out the library of business educational videos on the Oligo website.