November - Stylist and Salon Newspapers

The Value of Wisdom in Your Pricing StructureBlue HighwaysJerry TylerWould you like a raise?In both good and challenging financialtimes, the pricing for services remains a subjectworth considering. It is also something torevisit from time to time to see if our worthas service providers is in step with the compensationwe receive from our customers.One of the major benefits of our industryis that we (or our employers), can giveourselves a raise by raising our prices.What are the benchmarks to gauge ourprice structure? There are many componentsto consider in our quest for fair pricing.Don’t base your pricing on emotion.Some stylists feel their experience and timein the industry demands a higher price.However, what should younger, less experiencedstylists who have far more advancedtraining do?The question to ask yourself is: Whatam I offering my client? To be truly worthextra to your client, the price point shouldbe in alignment with the level of service youprovide, and their perceived value shouldexceed it. This way you maintain your client’strust and loyalty.There are four points to consider whenpricing:1. The quality of the services offered.2. The level of service the customer feelsthey received.3. Whether your image and marketingare in alignment with the quality of yourproducts and services.4. Whether your image and quality of areeffectively communicated to clients.Clients expect the technical and creativeskills we offer fit the price point. The $12chain salon haircut client has the samedemand as the $500 celebrity haircut client.They expect the professional helping themto deliver a quality of service that matches orexceed what they are paying for.The investment of the stylist is constantand continuing improvement of their service,which is the cut, color, skincare service, etc.Continually upgrading the skills and productswe offer our clients is important. However,increasing quality in the marketplace onlycommands higher prices when the perceivedquality increases. That means you need yourclients to notice.Your attention to the quality of your customerservice is priceless. Customer servicedemands a focused attention to details. It’sall about the experience. How do they feelwhen they leave? Is the service high level oreye level?You can do much to assure the perceivedvalue exceeds the price of the service. Itcomes down to how we treat the client.World-class customer service has little or noadded cost but reaps huge rewards in clientsatisfaction and continued loyalty.Many progressive salons are now using aprogressive pricing structure to reward theirstaff for doing the right things. To movefrom basic stylist to advanced stylist to masterstylist then to become a mentor or icon stylistcan become an internal career path. Many usea raise in weekly total targets, request versuswalk-in percentages, average ticket-salesincreases, home care sales, up-servicing, prebookingpercentages and continuing investmentin advanced and continuing educationas benchmarks to increasing their pricesthrough their progressive price structure.When there is evidence of high clientdemand and your brand is doing well,particularly in robust economic times, a raisein the price structure is usually a no-brainer.Now, however, with the evident economicchallenges we all face, how do we deal with aprice structure in a soft economy?During uncertain political and financialtimes, the first step is to be real. Our pricesfor products, labor costs and taxes are goingup daily just as they are for our clients. Weneed to be realistic and wise about how wereact.We may need a price increase just tokeep up with the cost of doing business. InCalifornia, the minimum wage was raisedthree times in a one-and-one-half yearperiod. To maintain a high level of customerservice, cutting support staff may not be anoption. Moving from high-end, well-respectedprofessional products to lower qualityproducts lowers the integrity of the services,which again is not an option. Although it’simportant to make greater investment inupgrading education to stay ahead of thecurve of technique and fashion, doing so maynot be an option. Even to just maintain thestandards our clients expect, we may need toraise our prices. That is what we must do ifwe want to continue to thrive and grow as anindustry.Lastly, in these times many turn to theoption of discounting services. In good timeswe can’t charge too much and in bad timeswe won’t charge what we are truly worth?Count the cost. Rather than discounting andlowering the perceived value of products andservices, creating incentives for customerloyalty and new referrals has true dollar valuewhile upholding the integrity we all workhard to maintain as industry professionals.In a recession it doesn’t mean our clientsdon’t have money to spend, it means they aregoing to spend it with greater attention to thevalue they receive. Lowering our prices lowersthe original value of what the client wasalready paying for. So again, count the cost.This one step up, two steps back approach onlyundermines the strength of your brand.Fair and sensible pricing based on thestrength of products and services can create asolid level of security even in these uncertaintimes. However, it will only happen if weexceed our clients’ expectations and assureour worth is far beyond our price point.Jerry Tyler’s column Blue Highways is his “Road Less Traveled” perspectiveon the solutions and challenges facing the beauty industry. Jerry Tyler hasbeen a stylist since 1975 serving as the former artistic director for Vidal SassoonAcademy and currently as Director of Education for Carlton Hair salons.He is also a licensed cosmetology instructor and has served as President ofthe California State Board of Barbering and Cosmetology. | NOVEMBER 2008 | NORTHWEST STYLIST & SALON