Anyone In The Room Got ‘Price Increase Wobbles’?
Many hairdressers still think raising their prices will drive loyal clients away. It won’t, says Boss Your Salon’s Maddi Cook. Not when you raise your prices for legitimate reasons.
by | THE COST OF DOING BUSINESS
In an industry that thrives on trends and innovation, there’s one area that we need to leave in the Naughties, along with the pouffes and pobs: low-balling our pricing. And I know, I know, you’d likely rather reconcile your accounts and clean your trolley wheels than tell your clients that their cuts and colours are going up (especially lovely Doris, who’s been coming to you since time began). But hear me out… As someone who’s taught pricing strategy and money mindset to over 20,000 of you lovely lot, I’ve heard it all when it comes to the ‘price increase wobbles’.
Pull up a proverbial chair as I share five reasons why it’s time to get your head out of the sand when it comes to raising your prices.
1. If you did what almost everyone else did, you did it wrong.
I’ve surveyed everyone I’ve taught pricing to, and an eye-watering 80 per cent of them said they got to their prices by copying others or by plucking them out of thin air. And it’s no surprise, because pricing doesn’t feature anywhere in our hairdressing education, yet it’s one of the first things we have to come up with as we set up our small but mighty businesses.
I remember doing ‘competitor research’ when I was first setting up. This highly scientific exercise consisted of sending my family members into local salons to grab paper price lists before writing them all down on a bit of paper and plonking myself somewhere in the region of near-the-bottom-but-not the-actual-cheapest, in a bid to seem attractively competitive.
Cue, a revolving door of salon-hopping bargain hunters, who all seemed to want their hair done at 8pm on Sunday, for less than what “her down the road” is charging, and not to worry, they would definitely pay next week when their wages came in.
2. The cost to do business is rising rapidly.
First of all, there’s stock costs, where between a post-Covid hangover, Brexit and the rising costs of production, wages and energy, it’s understandable that the cost of products keeps creeping up. But the same also applies in-house to your own business, especially those of you who are salon owners with employees.
From tubes of tint to brews, loo rolls and keeping the place warm, almost every cost you have will have risen in the last six months alone.
3. Inflation and the cost of living means your profits are stretched thin.
We’ve already seen above how the rising costs of doing business are eating further into your profits, but what that profit gets you is rapidly shrinking, too.
If you’re like me and your mortgage came off its fixed rate, your biggest bill shot up overnight with nothing to show for it. The same can be said for energy costs at home, general household bills and running costs, plus the price of your day-to-day essentials, like food shopping and fuel.
The Retail Price Index (RPI), which measures inflation, shows us that £50 in 2014 should be £75 in today’s money. It’s crucial that you don’t just factor in your business costs but also consider what you need to have left over in your pocket, and how far that will take you in today’s economy.
4. Your experience is growing by the day.
I find it can be helpful to think of yourself as a worker within your company. In my past life working for someone else, I would have a meeting at least once a year to discuss a pay rise. At the very minimum it covered inflation, but it also factored in my performance, my experience and education, my contribution to the company’s profits and customer satisfaction.
Every single day you get more experienced, and you sure as heck contribute to your company’s success (in fact, for most of you there wouldn’t be a company, if it wasn’t for the graft you put in).
Book a meeting in with your gaffer (ie, you) and put together a compelling pitch as to why you deserve a juicy pay rise. Don’t be the worst boss you’ve ever had!
5. You’re actually doing a bunch of jobs
I have a fun (see: gut-wrenching) exercise that I do in my group coaching programme, Breakthrough, where I get everyone to list all of the different roles they play in their business, along with the hours they spend doing each. We then literally work out what they’d earn for doing each job for that much time every week, to really show how much they ought to be earning. Sometimes it’s over six figures! It’s always tonnes more than what they’re currently taking home.
Think about how each of these five points are showing up for you, and if the maths isn’t maths–ing, it’s time for a price increase.
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