click image to zoomHospitality gurus, like Eric Fisher, create unforgettable experiences for each and every guest. For more than 15 years, SALON TODAY has been educating its community about The Experience Economy, a theory and book by B. Joseph Pine and James H. Gilmore who argue that businesses must orchestrate memorable events for their customers, and that memory or experience itself becomes the product that’s being sold. Further, they believe advanced businesses who deliver experiences, can charge for the value of the ‘transformation’ that an experience offers.
While many salon and spa owners have found that clients are more willing to spend their money on professional services and products post-recession, they’ve also noticed a subtle shift in power. Today’s clients are constantly calculating the personal value they receive and constantly deciding if they will pledge loyalty to a brand.
For those salons and spas who’ve mastered delivering a valuable experience each and every time, price seems to be somewhat irrelevant. But is it possible to make your prices irrelevant? “Absolutely!” says John DiJulius, owner of the John Robert’s Spas in greater Cleveland, Ohio, area and a customer-service consultant who’s authored Secret Service and What’s the Secret?
“Otherwise how have companies like Starbucks, Apple and Nordstrom dominated their markets when they charge premium prices? Most of us have a few businesses that we are loyal to because of something that they repeatedly do for us, something they give us that we can’t get elsewhere or a certain way they make us feel. We have no idea what their competitors charge, nor do we care.”
According to DiJulius, being price irrelevant doesn’t mean you can raise your prices significantly and not lose some clients--it means that when you deliver an experience, fewer of your clients will be price shopping your services. “Where would you rather compete, in the price wars or in the experience wars?” he asks. “I’d rather compete in the experience wars where there is less competition. I’ve found that many times when customers complain about price, it doesn’t mean they aren’t willing to pay for something, it’s because the experience didn’t warrant the price.”
Are you worth it?
To illustrate his point, DiJulius shared a story from John Robert’s Spa in his weekly blog. “We had a client upset about a haircut she paid $45 for because she didn’t feel it was worth it. To make things right, I gave her money back plus a complimentary gift certificate to visit one of our senior level stylists who charges $85,” he says. “Three years later that client is still coming in to see the higher-level stylist who now is charging $100. At $45 she felt she was overpaying, but she has no problem shelling out $100 every six weeks. It wasn’t the price she was upset about, it was the total experience. In fact 85 percent of consumers report they’d pay up to 25 percent more to ensure a superior experience.”