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Are Your Service Prices Slowing You Down?

Source: Aveda Flickr
Source: Aveda Flickr

The saying, “Price is what you pay. Value is was it worth it?” highlights one of the single most important concepts in how quickly your salon gets busy—and stays busy as you grow.

Your entry-level service price point may be one of the most important numbers in your business. When it comes to service price, if entry level prices are too high, an empty chair is the result. Empty Chair Syndrome is a very sad thing. It creates unhappy hairdresssers, unhappy guests and unhappy salon owners. It’s the ultimate lose-lose-lose scenario.

At The Salon People Business Academy, understanding the importance of setting the right entry level service price is taught as one of the operational foundations for long term, sustainable growth.

What is appropriate entry level pricing? It’s pricing that makes it easy for the guest to say “yes” to the service. The Business Academy recommends a $30 entry level haircut price.* Why? It’s easier to get the guest through the door at that price. Then, the quality of the service experience sets the course for building strong guest relationships, retaining guests and creating ongoing demand.

Worried your stylists are going to balk at changing their prices? Time to shift the conversation in your business so they understand their value lies in the experience they create and number of guests they serve, not with what they charge.

Ask stylists not to question, “Am I worth it?” but instead, “Am I busy at my current price point?”

Once they create demand at their current price point, then it’s time to increase price.

Putting the Pricing Plan into Action

Maggie DiFalco owner of Maggie the Salon in Pembroke Pines, Florida, and her son, David DiFalco, salon coordinator, have attended two The Salon People Business Academy sessions and implemented new service pricing based on what they learned.

“All of our entry-level people were between $45-$55,” David says. “And they all saw a different number of clients at different prices.”

The DiFalcos spent three or four months going over numbers to see where each stylist landed on guest count, pre-booking and the other promotion criteria that are part of the Business Academy Blueprint, a path for team member growth and prosperity.

“We brought it all back to guest count, and then I was able to figure out new pricing,” David says. “We ended up changing our starting price with a level-one designer for a cut and blow dry to $35.”

On the flip side, the salon’s top cutter’s price went from $80 to $90 based on demand.

“We widened the gap from designer one to master,” David says.

“And a lot of our senior people are benefitting from this. Their prices went down a bit, but they are getting busier.”

At Venue Salon in Lakeland, Florida, owner Patricia Uiterwyk turned to The Salon People Business Academy after she purchased the existing Aveda salon in December 2017.

“I needed a plan and a map,” she says. “It ended up modifying our haircut price with a new stylist to $30 (up from $20-$29) and adjusted our other stylist prices to be in line with that baseline change.”

Before, the salon had no level system, so it was a big change for some of Uiterwyk’s stylists—one even dropped from a $70 haircut to a $45 haircut.

“But it wasn’t her pay—it was her service price,” Uiterwyk says.

“I had the numbers and facts to show my whole staff that guests were opting out due to price.”

The stylist who dropped down to $45 got busier and more bookable with the new price and some modifications to her schedule and availability.

“And now she’s in line for a raise to go up to $50,” Uiterwyk says.

Transparency Keeps the Team Together

Once Uiterwyk adjusted her prices, she had to have hard conversations about pricing with her team, but reminded them often that it wasn’t their pay she was adjusting, it was their service price.

“It wasn’t personal,” she says. “We had to look at the demand on their time, along with their expertise. And I explained it was part of my job to help fill their book. It wasn’t a reflection on their ability, but a way to get them on a path to being bookable.”

Uiterwyk has also found her staff to be more motivated to complete their training in a timely fashion now.

“And more senior stylists want to re-take classes,” she says. “It has motivated everyone to want to be better.”

At Maggie the Salon, the DiFalcos were opening a second location around the time they made the changes in service pricing. Starting fresh with a new staff with the new pricing proved to be easier than changing the structure at the old location, but they did it in both.

David told stylists in order to get a $5 increase, they had to hit four benchmarks: guest per week, retail, pre-booking and service per week (also part of the Academy Blueprint system).

“They’ve jumped all over the numbers with ZeeZor,” David says. “And in their monthly one-on-ones they know exactly what they need to do because it’s so clear cut.”

They did have a couple stylists who were too high in their haircut prices and had to lower them by $10. But those stylists got busier, and ended up more profitable.

“Would you rather do a $45 haircut for 10 guests or a $55 haircut for three guests?” David asks.

However, most of the DiFalcos’ affected stylists were new, and their master stylists’ prices generally went up.

Maggie says, “The new pricing has made us consistent. We coach them to look at the same numbers over and over again, knowing those numbers will make a difference. We have a roadmap to follow.”

The Impact on Business

After changing their entry-level service price to $35, the DiFalcos noticed they were getting busy, with the lower-priced haircuts getting booked online by new clients.

“That’s how you build the new team,” Maggie says.

“And for those who want the higher-end cuts, that option is there, too. The minute we made the change our new talent got busier.”

Uiterwyk’s also focused on adding value by ramping up her training on the Aveda Points of Difference.

“We’ve been focusing on rituals, aromatherapy, scalp and hand massage, and we added a new shampoo room we call the ‘rain room,’” she says. “We made it mandatory for our stylists to heighten the experience for all guests.”

One of Uiterwyk’s stylists noticed her tips went up by $140 the first week after she started incorporating a hand treatment in her shampoos in the rain room.

“We’re offering a luxury experience, and we equipped our team with the talking points on that,” Uiterwyk says. “We explain what’s included in our haircut price and tell them about the education we have on our days off.”

David DiFalco says he’s now having a hard time keeping assistants because they are graduating to entry level so quickly—they used to assist for about six months, and now they’re barely there for three before they’re ready to hit the floor.

Source: Aveda Flickr
Source: Aveda Flickr

“And our master stylists have never been so busy,” he says. “Our top stylist is on-pace to make $25-$30K more this year than last year. We have five people who are on-pace to make $140K after doing just a little over $100K last year. It’s a competitive atmosphere in a good way—the more they do, the more money they will make. And it’s all laid out for them.”

And those clients who come in for the entry-level $35 haircut? They don’t always stay at that price point.

“A client will see a master stylist doing a balayage and want to see them the next time they come in,” David says. “Or it can go the other way. Sometimes a client decides their daughter doesn’t need a $90 haircut.”

“The right service pricing gives us a wider audience because we have a wider range of prices.”

*The $30 entry level haircut price is The Business Academy recommended entry level haircut price for salons in non-major metropolitan markets like New York and Los Angeles.

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