When it comes to pricing your treatments, there are factors that need to be considered: what price point will give you the best profit margin, while remaining competitive with other salons, for starters. But also, what price will position your salon within the demographic you’re working toward?
What’s your break-even point?
You need to add up all the inclusions that make your treatment possible. This should include product used, the salary of the therapist carrying out the treatment, overheads such as rent and utilities, marketing, and any other time spent on perfecting the treatment. “Once you’ve worked out that breakdown, you need to create a large enough margin above that to bring funds into your business,” says business analyst Jasmine Ceralla.
What are your competitors charging?
“The customer has the power because it’s their money that decides which salon will do well,” says Jasmine. “But it isn’t enough to just beat their price. You need to make sure you can afford to beat it. Going in low but not breaking even is a recipe for disaster.” Jasmine recommends analysing the prices of your five closest competitors. “See what they’re charging. Is their target market similar to yours? What value are they bringing? Is your treatment of better quality? Can you afford to compete with their price point while maintaining your standard of quality?”
Ask your customers
The easiest way to get a direct answer is to ask a direct question and in this case, you should be asking your customers. “Of course, asking a person who happens to be in your salon how they feel about your pricing can put them in an uncomfortable position,” says Jasmine. “Rather, send them an email, or a survey, asking about their feelings towards your pricing or whether they feel they are getting the best value for their money. Those insights will help you determine the appropriateness of your pricing.”
Give it a go
If you feel like you can justify putting your prices up, give it a go. “If people start to cancel appointments based on the price, consider offering long-time customers a discount, but ultimately, you need to price your services at a rate that will bring in more profit while retaining clientele.”
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