“People do not mind paying a little more if you exceed their expectations.”  Jon Gonzales

Salon owners, like business owners across all industries of every kind, are struggling in this changing economy to to stay ahead of rising business costs and the cost of living.

Far too many salon owners are trying to find solutions to these challenges by trial and error. As your business costs keep rising, profits will continue to drop.

The bottom line we must raise our prices. But before we raise our prices we must create a demand for our services and add value for our services  to justify raising prices. We need to give our customers more than just outstanding salon services.

A great start would be by educating our staff about the power of customer service.

Good is not enough anymore.

In an effort to  stay afloat and keep top hairdressers, many  salon owners have resorted to any number of the following: recruiting top stylists from their competitors; lowering their prices, paying commissions that are too high; or renting out stations just to survive. Many more are allowing some of their star performers to go solo, refusing to follow your vision, goals, and team concepts in an effort to keep them in fear of losing a member or members to a competitor.

In effect, holding you hostage. Remember you are the boss. Appeasement is not the answer.
Honesty and a code of ethics is the only way to grow a successful business.

How can we grow our business and raise prices in this kind of atmosphere.

If we  are to raise prices we must raise our standards of excellence to justify raising prices. We as a team share the same vision.

One thing I have learned over the years is customers don’t mind paying more if you work hard to exceed customer expectations, by excelling at customer service.

It is critical that every member of your team understands the power of customer service.

This should be a critical part of your training program. My book A Hairdressers Guide to Success was a vital part of our training program. Every member of your team should have a copy.

Remember; when you have too much down time, or not as busy as you would like to be you run the risk turnover.

Once you create a demand for your services and start increasing salon traffic, then you can start raising your prices in small increments.

You could start raising prices for your key members who are creating a demand for their services.

If I get enough request for my all day personal development seminar for your team, I will schedule my all day personal development seminar in Las Vegas, in November. I urge you to attend with your team.

As a salon owner, my greatest profit potential was educating my team. As leader of your team you must  develop your management skills, improved profits will be your reward.

 

Here are a few tips :

 

Positive Word of Mouth Referrals – will be your score card in helping you decide when and how to raise prices. Monitor your customer return rate for each member of your team. If your referral rate is high, then you should consider raising your price.

Deciding When to Raise Prices – Once you’ve created a demand for services and have a high rate of customer returns and referrals adjust your pricing as needed. However, if your salon is not busy, you may have to keep your existing prices stable until you are able to brand the image of your salon and create a demand for your services. The best time to raise prices is 2-4 weeks before your busy season. January and February are not the best  months to raise your prices, as is “tax time”.

Rule of Thumb for Price Raises – Generally, small increments is best. Chemical services can be raised by $5.00, or hair cut prices by $ 3 to 5.00 depending on your salon’s reputation.

Getting the Message Out – Before you announce price increases to your clients, have an all-staff meeting to discuss the changes. Be sure your staff knows how to present the increase in the best light with their customers. Once you’ve met with the staff, create a simple sign that can be displayed near your sign-in or reception desk. Effective  the first of June there will be a small adjustment in our services at least one month in advance.  A simple “Thank you for your understanding and continued patronage” statement goes a long way.

The bottom line, we must develop high end salons,staff, and high end management. These are challenging times for salon owners.
In closing, as business costs and the cost of living continue to rise, we must raise prices accordingly.