Posts tagged ‘the Beauty Resource’

Four Big Time Pricing Myths

Pricing your services and/or products is an integral part of your salon/day spa generating the sales and profits you are looking for.

The question you want to ask yourself is what prices should we be charging? When you think about the answer, please keep your objective clearly in the forefront.

For sure your ultimate objective is to maximize the amount of money your business makes. It’s just that on the road to doing that you can use pricing as a strategy (there’ll be more on pricing as a strategy in a future Finkelstein Report).

However before we can even make pricing decisions it’s important to wipe your mind clean from four big pricing myths. If you hang onto these myths, you’ll be sure to dilute any advantage that a pricing strategy will bring to your salon/day spa.

Myth #1 Price is the client’s most important buying criteria. Sure price is important; however, it usually comes up around #4 in consumer shopping surveys about what’s important to them. Yes, there are people who buy based strictly on price. The question you must answer is do you want to do business with these folks?

Myth #2 You have to match or even slightly under-price your services or product in a competitive or commodity driven market. With so many different ways to differentiate your salon/day spa, I’m astounded people even think this way.

For instance, you could try:

  • Specializing in a particular niche within the beauty niche (example: hair color or laser treatments)
  • Touting your experience or credentials
  • Partnering with top of the line manufacturers
  • Limiting accessibility

Myth #3 Pricing only involves taking the cost of your service or product and marking it up by your desired profit margin. Unfortunately, too many salons/day spas don’t have a handle on their true costs so even if they wanted to do cost-plus pricing they couldn’t. For that matter, cost-plus pricing may have nothing to do with the value of your services or with the market price.

However, if you don’t know already, please find out the cost of delivering the service and figure out what gross margin you need to cover all your fixed expenses.

Myth #4 If your sales are stagnant or falling behind, just drop your price and they will increase. Remember that although people put a high value on price, they also put a high value on quality. In the service business, perception is reality, so when you lower the price you chip away at the perception of your quality.

There are ways to justify lowering prices, if you believe you can retain the clients once you have them in the door and up-sell and cross-sell them with other services. However, if you lower your prices to increase sales you could very well be accelerating your losses.

Andrew Finkelstein, President of the Beauty Resource, is a successful New York City-based entrepreneur, author, speaker, and coach who helps professional beauty businesses get more clients. Andrew’s E-zine The Finkelstein Report is the beauty industry’s #1 marketing resource with free articles, marketing tools, and valuable advice for salons and day spas owners. Contact Andrew at http://www.thebeautyresource.com or 212-831-2421 x202

Building Your Salon/Day Spa’s Service Statement

David Allen, author of “Getting Things Done,” wrote, “If it’s only in your head your dead.” So how does that sentence apply to customer service?

Your salon/day spa may already have a mission statement and/or a vision statement. An enlightened owner/manager knows employees/associates need to see both the bigger picture and feel the salon/day spa heading in that direction.

You also know the challenge of keeping the troops focused on client service and uses various tools to do just that.

A service strategy statement that describes what you are ultimately accomplishing with and for clients helps your team members understand the true purpose of the work they do.

It’s a tool that when well done can:

  • Ensure your employees are working with the same idea of “what’s really important here.”
  • Give employees a snapshot summary of the salon/spa’s mission or vision.
  • Give customer contact/service providers a point of reference for their day-to-day decision-making.
  • Help people understand the rationale for salon/day spa policies so they have confidence in resolving one time or unusual situations.
  • Give people insight into your salon/day spa’s key indicators (the things that are measured).

Why would you want to create a service statement in the first place?

  • If you don’t have a clear definition of what good service means, then the odds of your salon/day spa achieving it are about 30%.
  • If you have a general definition, then the odds are about 50-50%.
  • If you have a specific definition, clearly defined in the context of both the client and the employee, and if it is well communicated, and tied into standards and indicators, your chances of achieving good service increase to about 90%.

What should a service statement look like?

  • Clear: It should be to the point, and understandable.
  • Actionable: It should communicate ways to satisfy, impress, and retain your clients.
  • Consistent: It should support the mission and vision.
  • Helpful: It should guide your employees, showing them what to do, how do it, and why. It should not make them roll their eyes and laugh silently to themselves.

How do you create one? First by including both your clients and employees in the process and by:

  • Identifying your target customer
  • Identifying your core contribution to that customer
  • Deciding what you want to be “famous” for

Like anything else, a service strategy is a tool that is meant to be used. If it simply sits in your toolbox, it will never achieve the purpose for which you designed it.

David Allen, author of “Getting Things Done,” wrote, “If it’s only in your head your dead.” So how does that sentence apply to customer service?

Your salon/day spa may already have a mission statement and/or a vision statement. An enlightened owner/manager knows employees/associates need to see both the bigger picture and feel the salon/day spa heading in that direction.

You also know the challenge of keeping the troops focused on client service and uses various tools to do just that.

A service strategy statement that describes what you are ultimately accomplishing with and for clients helps your team members understand the true purpose of the work they do.

It’s a tool that when well done can:

  • Ensure your employees are working with the same idea of “what’s really important here.”
  • Give employees a snapshot summary of the salon/spa’s mission or vision.
  • Give customer contact/service providers a point of reference for their day-to-day decision-making.
  • Help people understand the rationale for salon/day spa policies so they have confidence in resolving one time or unusual situations.
  • Give people insight into your salon/day spa’s key indicators (the things that are measured).

Why would you want to create a service statement in the first place?

  • If you don’t have a clear definition of what good service means, then the odds of your salon/day spa achieving it are about 30%.
  • If you have a general definition, then the odds are about 50-50%.
  • If you have a specific definition, clearly defined in the context of both the client and the employee, and if it is well communicated, and tied into standards and indicators, your chances of achieving good service increase to about 90%.

What should a service statement look like?

  • Clear: It should be to the point, and understandable.
  • Actionable: It should communicate ways to satisfy, impress, and retain your clients.
  • Consistent: It should support the mission and vision.
  • Helpful: It should guide your employees, showing them what to do, how do it, and why. It should not make them roll their eyes and laugh silently to themselves.

How do you create one? First by including both your clients and employees in the process and by:

  • Identifying your target customer
  • Identifying your core contribution to that customer
  • Deciding what you want to be “famous” for

Like anything else, a service strategy is a tool that is meant to be used. If it simply sits in your toolbox, it will never achieve the purpose for which you designed it.

Andrew Finkelstein, President of the Beauty Resource, is a successful New York City-based entrepreneur, author, speaker, and coach who helps professional beauty businesses get more clients. Andrew’s E-zine The Finkelstein Report is the beauty industry’s #1 marketing resource with free articles, marketing tools, and valuable advice for salons and day spas owners. Contact Andrew at http://www.thebeautyresource.com or 212-831-2421 x202