Has there been a more commonly used phrase in the past 12 months than ‘the increasing cost of living’? Everyone is feeling it, and raising prices is a hot topic among salon owners – most know they need to do it, but are afraid of what their customers will say about it.
But what if you could raise your prices, while still giving your loyal customers the option to retain your old pricing rates, simply by making some small changes to their schedule? Sounds like the ideal compromise, right?
That’s what Jason Everett put to salon owners in his ‘Prime Pricing’ workshop at the 2023 Salon Owners Summit, providing much food for thought.
The Problem With Single-Tier Pricing
Most salons will charge the same fee for their services, no matter the day of the week or time of day – aside from possibly a higher price for more experienced professionals.
The problem this causes for salon owners is unbalanced books, unbalanced rosters, and unbalanced appointment calendars. You could make a killing on a Saturday, but maybe you barely scrape through a Wednesday with very few bookings. Meanwhile, you have a team of employees who are unwilling to work on a Saturday – and why would they want to when they make the same money on a nice, quiet Tuesday?
What is Prime Pricing?
Prime pricing means charging varying levels for your services depending on demand for the appointment slot by the day of week and/or time of day – similar to how airlines, hotels and taxis charge for their services. This allows you to raise your prices for the prime spots in your calendar, while leaving your old, lower pricing available at less desirable times.
Jason recommends raising prices by 5-20% on your most sought-after times.
Start simple – for example, charging higher rates on Tuesday-Friday lunchtimes and all day Saturday. You can even trial it one day per week or with one staff member and see the reaction.
If it goes well you can start to get a bit more granular in your peak times and prices. You can even try ‘Premium Pricing’ – charging double for staff members off-days (e.g. if a client requests their preferred staff member on a day they don’t usually work) or on emergency openings (e.g. Sundays).
Benefits of Prime Pricing
Consumers are familiar with it
Hotels, airlines and taxis have laid the groundwork for you – sure, Prime Pricing may be a novel idea within the salon industry, but it’s nothing new to consumers. Your clients will understand the concept immediately.
Allows you to raise your prices while giving your clients options
A flat raise in prices across the board would likely ruffle some feathers – particularly in those clients who have long-standing appointments with you. But Prime Pricing gives those clients a choice – they have options now – they can keep their prime-time booking with you and pay a little extra, or they can move to a less in-demand timeslot if they want to continue to pay the same rate. You’ll be surprised how many people won’t mind paying extra when you present the option.
Spreads your appointments out more evenly across the week
The beauty of offering these choices to your clients is that different clients will have different personal preferences. Some will prefer to nip in on a Wednesday at 10 while they’re working from home to save some money on that cheaper timeslot, while others will be happy to pay more to get those prime Saturday slots. Jason referenced a salon that is part of his High Performance Salon Academy that rolled out Prime Pricing and is now as busy on a Tuesday as a Saturday.Â
Gives proper incentives to your staff to work weekends
You can use this as a motivating incentive to get staff to want to work Saturdays. If you can now charge 20% more for prime Saturday appointments, staff can earn a higher hourly rate and more commission on a Saturday than on an off-peak day.
Dodging the ‘Arrows’ – Addressing the Pitfalls of Prime Pricing
In true workshop fashion, Jason opened up the floor to plenty of audience participation on the subject.
He asked the audience to ‘hit him with their arrows.’ He knew that with such a novel pricing idea for the salon industry, there was bound to be some apprehension. So Jason asked the crowd to poke holes in the idea, and then together to think of workarounds for those holes. Potential pitfalls that came to mind for many were:
Addressing negative feedback from long-standing clients
Every salon has at least one client who has a standing appointment in a prime slot, and many owners in the room thought of this person and what their feedback might be – they won’t want to pay more, and they won’t want to move slots. But they are a loyal client who they don’t want to lose.
Some potential workarounds for this included:
- Offering them a lower tier staff member at that time and rate
or
- Honouring their old rate and slot for for as long as they have already rebooked, but as soon as they miss a slot, their old rate and time can no longer be honoured.
Addressing apprehension from staff
Without them realising it, Jason was already coaching salon owners in addressing apprehension from staff. All they needed to do was replicate what they were doing together now: present the idea to staff, ask them for their ‘arrows’, and discuss workarounds together.
This beautifully mirrored Jason’s lessons from his main stage talk earlier in the day on Leadership and Motivating Your Team, on the difference between Leadership 1.0 and Leadership 2.0.
Keep Learning from the Experts
Read more of the 2023 Salon Owners Summit Recap
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