Salon pricing — can’t live with it, can’t live without…pulling your hair out trying to figure it out. If you charge too much, you risk losing (or not gaining) clients. But if you don’t charge enough, you risk not making a profit (or, at least, the profit you want). So where do you start?
We’ve compiled a list of ten tips from hair and beauty industry experts to assist you with your salon pricing. Whether you’re just setting your prices now, or thinking about increasing them, below is a list of techniques to do just that. Or, you can just watch the recap:
On How Much Hair Stylists Should Charge
1. Determine How Much You Want To Make This Year
Setting a goal for annual revenue is a great place to start. Once you know how much you in your bank account at the end of the year, you can price your salon services from there. It’s more than a guessing game, and according to hair expert Nina Tulio, it’s based on “these components: Time, product, expenses, target profit, and demographic. Pricing is best when it’s based on facts.”
Start by calculating expenses. Employee wages? Add those up. Rent? Add that. Products? Add those, too. Then, you know how much you need to make before expenses to reach your revenue goal.
2. You Determine Your Own Income
According to hairstylist Jess Dworniczak, “you are in control of your own income, so if you are unhappy with it, do something about it!”
This isn’t to say that everyone can or will make six-figures right off the bat just because they want to. But, if you are not making enough to cover the factors mentioned above and pay yourself what you’re worth, you can change that! Your mindset plays more of a role in pricing yourself (and, too often, undercharging for your services) than you’d think.
On When Hairstylists Should Increase Their Prices
In terms of actually raising prices, this is based on a few things. And as our resident salon pricing guru, Tulio, is here to show us the way.
3. Base Your Timing on Demand
Take a look at your online booking system. Are you booked solid? Do you have a lot of downtime? Are you somewhere in the middle? Tulio has a pretty simple rule of thumb to follow for increasing your salon prices:
“If you are booking out 3-4 weeks consistently and your productivity is over 80% consistently, it’s time to have an increase.”
4. Don’t Go More Than 18 Months
Raising your prices can definitely be stressful, but it’s not something to feel bad about or apologize for. If you do feel like you need or want an easy justification to do so, here it is:
“If it’s been over a year and a half [since you last raised your prices], it’s most likely time to have an increase.”
5. Remember To Adjust For Inflation
“The only way your business can support inflation is by having an increase in your service prices,” says Tulio.
Prices on things like products, rent, and utilities increase — sometimes yearly. So, to make the same amount that you made last year, you’ll have to raise your salon prices. And if you want to make more, you’ll need a larger price increase.
6. Factor in Investing in Education
When you pay for education, you’re putting money towards increasing the value of the service you’re giving to someone else. Your prices should reflect that!
According to Nina, education is “not the sole reason to increase your salon prices,” but in combination with the above reasons to have an increase, it’s definitely a strong factor.
On Strategies For Salon Pricing
7. Don’t Underestimate Your Own Value
According to Lindsey Little, it’s “important that clients understand the cost of color and appreciate the extra time it takes for us to give them that treatment. Once we start just adding extras in for them that they don’t understand the value of…we start to do things to be nice or because we feel bad that it costs so much.”
Don’t give anything away for free (unless you’re running a discount or a promo). Clients want your services, but they don’t always know the value of add-ons right off the bat. That doesn’t mean you should include them for free!
8. It Doesn’t Need To Be A Drastic Increase
Salon owner, Dawn Clemens, suggests that “the best way to increase your prices is to not make a big jump instantly. Start with a 10% raise so that the customers don’t feel a huge gap and don’t get impacted greatly. This way you’ll be able to retain your customers while increasing your prices and profits. After this, if you still notice an 85% booking rate in the next 2-3 months, then you can raise the prices again.”
This will help your clients ease into the change, and it will help you gauge how much they’re willing to pay. 10% may not seem like a lot, but it definitely adds up. And remember, if it’s still not enough, you are in charge of your own income!
9. Choose A Top Service And Charge Extra
Do you have a “signature” service, i.e. something your salon is really good at or known for? Not only does highlighting it in your advertising catch the attention of your clients, it makes it seem special, and in some cases, even more desirable.
Esthetician Lori Crete would suggest “identify[ing] your signature offering, plac[ing] it at the top of the menu, and charg[ing] at least 30% – 50% more for this service.”
10. Use Technology To Your Advantage
We know, whether you’re asking for tips or letting your clients know you’re raising your prices, discussing money can feel totally awk-ward. But, we have so much technology at our fingertips that make The Ask that much easier.
Think email marketing. Philip Wolff suggests that “if you don’t feel comfortable telling them [about your price increase] face to face, [use] an email blast that says something to the effect of “Dear Valued Clients, This message is to let you know that effective ___(date)___ my service prices will be increased by ____.” and a personal ending of your choice so this way they get a polite notice. Usually 60-90 days ahead of time is a great way to do it but again there’s no perfect way to go about it.”
So, while salon pricing can be tricky, there are tried and tested techniques to follow from basic formulas, to timing, to education, and everything in between! If you’re still looking for more, here are a few other resources for salon pricing strategies. Just remember, you determine the amount of money you take home at the end of the day.