The Price is Right: An Easy Guide To Setting Your Salon Price List
The hair salon industry in the United States has grown by 2.4% to reach a revenue of $46 billion in 2018. One study found that on average, salons bring in a revenue of one million a year. If that isn’t you, perhaps your salon price list needs tweaking.
Read on to learn how to set your salon prices.
Know What Keeps the Lights On
Many salon owners don’t know their break-even number. This is the monthly amount you need to bring in so that you can keep the lights on and pay the rent.
Then, consider how much your average service costs. Let’s say it’s $50. All you need to do is divide the break-even amount by the average service cost.
This will tell you how many clients you need a month in order to break even. Then divide that number of clients by the number of days you are open each month.
This will tell you how many clients you need a day to keep the lights on in your salon.
Once you work out the math to this basic calculation, you start to realize how doable it is. Knowing your break-even number is vital to having a solid understanding of your business.
Once you know what you need to earn each day and month, it’s time to consider what you are worth.
Know Your Worth
If you are new and just starting out you might not have the confidence and experience to set your salon prices high. And that’s OK.
But if you’ve been in the doing this work for multiple years and have made hundreds of clients happy, then you know that you are worth more than a novice.
Also, consider what your salon offers that is unique or extra. Anything that you offer that makes you stand apart from your competitors should be reflected in your salon price.
Always think about the client experience when setting your salon prices.
Simplify Your Salon Price List
This tip may seem counterintuitive, but trust us, it’s the best option. When your price list template has dozens of options with several sub-options for each service, it is confusing.
Not only for your clients but also for your employees. Your team may inadvertently choose the wrong option during the checkout process. And that means that they are undercharging.
Your clients really don’t need so many options for a haircut. Wet cut, dry, rough dry, blow dry. There doesn’t need to be different pricing for every customization.
Make it simple for your team and for your clients.
Think of it this way. When you are a restaurant, you can order your entree and choose from several sides for one price. If you say no cheese on your burger, you don’t pay less.
So stick to salon prices that make it simple. This will reduce undercharging and will help clients know how much they will pay.
Discounts sound like a great way to attract new clients. And they can be. But in fact, there are better ways to gather new clientele without selling yourself short.
Remember, discounts undercut your value. Let’s say you offer a student or senior discount. Well, you are still doing the same amount of work on those clients as you would any other.
So why would you give a discounted price for these clients? Take discounts off your salon price list.
Likely, your clients aren’t coming to you for those few bucks off their service. Yet, if you aren’t sure about getting rid of discounts all together, reserve discounts for your slow days.
This way, your busiest time slots are filled with full-paying clients. And it can drive a bit more traffic to your slow days.
Your team wants to be nice to their clients. But by not charging full price for services, they are undercutting your salon’s profits.
Even a few dollars here and there can add up to hundreds of dollars over the course of a week. Make sure you educate your team about how undercharging hurts your business.
One of the best ways you can prevent your team from changing prices is to use the right point of sale software.
Your Salon Price List Needs To Be – Not High, Not Low, Just Right
The aim of salon owners is to set the price just right. You want to price low enough to get repeat business, but high enough that you are getting compensated for your worth.
Remember, pricing too low can have negative outcomes for your salon. Sure, at first, you may have lots of clients. But it can be very hard to raise prices down the line once your clients are used to your pricing.
And, low pricing can signal low-quality service. That’s not the reputation you want to carve out for your salon.
Add Value to Your Services
If you are an established salon, it is possible to raise your prices without losing clients.
To keep your clients loyal and happy, focus on adding value to their experience. It doesn’t have to cost you money to add some bonus services.
A hot towel after a haircut or a head massage with all facials doesn’t cost you anything but a few extra moments of time. Of course, you can also create a loyalty program to offer loyal clients rewards.
Just aim to offer a little extra to make customers feel that they are getting a good value for their money.
Salon Price List Bottom Line
Thanks for reading. We hope these tips help you set your salon price list with confidence.
At Salon Iris, we offer packages to fit salons of any size. Get your free, no-obligation trial to see how our packages can help you.