Salon Prices: Getting them Right

The very first step to growing your salon sales is to charge correctly for all of your services and ensure your services aren’t unnecessarily being discounted or undercharged.

Take a look at your current salon prices and study how your current prices are formulated.

Your price list needs to be simple and all your services profitable. Here’s four steps to get your salon prices on the right track.

1. Know what you’re currently charging

Most salon prices are set without any particular formula – just to the level the owner is comfortable with or thinks they are worth. Further on down the track you will need to work in a proper formula, but before that, you need to know where you are now. This starts by knowing what you are charging per minute for each and every service. Take each service and divide it by the time you use (e.g. $65 Cut/BW 45 mins – 65 divided by 45 = 1.44).

Do this with EVERY single price!

Bear in mind that this step is just a place to start. Don’t get hooked up on where you want your prices to be yet. For now, just know where you are and start thinking in a ‘per minute’ rate.

What you actually sell, is time.

Don’t get hooked up on where you want your prices to be yet. For now, just know where you are and start thinking in a ‘per minute’ rate. What you actually sell, is time.

2. Remove discounts

Think of discounts as work you do that quite gives you little or no profit. That could be special rates for kids, senior citizens, students – any work you do that is discounted.

Get rid of these discounts! You’ll be amazed how much it costs you to do this work. If you feel you can’t go straight in and remove the discounts, then maybe consider offering those discounts on your slowest days only. That way your high demand time is available for full paying clients.

This is what we did as we grew our first, newly acquired, salon business – we had inherited all sorts of discounted prices.

3. Stop undercharging

I remember years ago when we started really focusing on this. In the first week we found our team had undercharged clients by over $700. That was a few years ago now and the team were as gobsmacked as we were, but a little here and a little there all adds up. Our lovely team didn’t intend on ripping us off – they thought they were being nice to their clients. Most of us have undercharged at one time or another, but it has to stop!

Having appointment & point of sale software is now essential. To help your team from undercharging, you can restrict any price change so it minimises changing prices.

Talk to your team about it so they understand how it affects your business. When you truly value what you do, you won’t want to undercharge or give a discount!

4. Simplify your salon prices

Your team will often take the easiest option for their client, so keep their options of charging simple and minimal. We often see price lists with cuts or facials galore! This is more common in hairdressing salons with sometimes three or four options for a cut – wet, dry, with a rough dry, with a BW.

Keep it simple and make it easy for your team and your clients.

Think of this: if you order a Big Mac without cheese, you don’t pay any less for it do you? Or if your doctor doesn’t give you a prescription you don’t pay less.

Your clients pay for your expertise. Simplifying your price list also makes it difficult for your team members to choose a lower price option when charging for a service. This is a very common way of undercharging.

The next step is your price plan, but understand that these four steps must happen before you increase your salon prices and start growing your sales. There is no point in putting salon prices up on services that aren’t working right in the first place.