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Are You Losing Money On Your Toning, Retouch Or Highlight Services?

May 16, 2019 | 5:28 AM
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Digging deep into your numbers regarding color usage and services can really transform your business.
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The more you know, the more you save and the more money you make. That’s true of everything in your business. When you’re informed, you can make informed decisions. Knowing your numbers when it comes to hair color usage is particularly helpful because it’s so easy to over-use product and undercharge for services. Here’s how three salons, with the help of Vish software, were able to analyze the data available at their fingertips to determine which services were losing money and which were producing healthy profits.

Charge Clients Just For The Color They Use
When Bruce Brothers and his husband Carl purchased Goldie x Bob in Denver, the pricing structure for hair color was like many salons--combining the average color cost across all customers with labor costs to provide pricing for each service. But thanks to color usage data gathered via Vish, they were able to see exactly how much product was being used for each service and know exactly what it was costing. “Once we had a measurement and a cost for each service, we were able to look at our color expense in a different way,” says Bruce. After analyzing the numbers, they decided to first pull product cost out of the equation and adjust each stylist's pricing by reducing their color service rates across the board. Then they notified their customers that they would no longer be charging them an average price for their color but instead would be charging them for the actual product they use—data that Vish makes readily available. As a result, the salon has gone from a nearly five-digit annual loss for color to a projected high four-digit annual gain. “We can now provide a precise average cost of color for each service we offer based on months of data we've acquired,” says Bruce. “This has been vital data during our change to charging for actual color used, since we've been able to give our customers a heads up on actual expected costs. Our customers have been, almost without exception, very positive about the change. They appreciate they are only paying for what their hair needs. Clients with long, thick hair are understanding of their larger color bill and our clients with short cropped hair are ecstatic that their charge represents the true cost of their service. Overall, instead of color product being a cost center, it has become a revenue center and a win-win-win for all.”

Correct Mixing And Pricing For Every Color Service
The good news for Cynthia Alex of Keema Salon in Burr Ridge, IL after working with Vish for over 12 months, was that color waste was under control.  As such, Cynthia and her team were able to focus on the data provided by Vish to further examine their color business. “We discovered we were doing well with our highlight pricing, for example,” Cynthia says. “But we discovered that overmixing for retouches was more common than we thought.” The first step was to fine tune the amount of color mixed for each retouch, with the help of Vish. The next step will be to revisit pricing for retouch services—thanks to information that wasn’t available with the salon’s POS system. “The POS data wasn’t enough; it didn’t get down to the nitty gritty,” says Cynthia. “Prior to Vish there was no way to know exactly how much color was being wasted or overused, and no ability to adjust to that. Vish allows you to price accordingly and charge accordingly for every client.”

Toning Up Toning Prices
At Posh Salon in Williamsburg, VA, Nadia Duncan thought her pricing of $10 per 40 grams of color used for toning services was a pretty good strategy. Then thanks to Vish, she discovered at this rate--once commissions were factored in--the salon was actually losing money on toning. “We quickly realized,” says Nadia, “we needed to raise our prices to make a profit rather than losing money by providing this service!” By boosting the charge from $10 to $25 per 40 grams of color, Posh generated an additional $3,480 from toning services in just one month. What’s more, the new Vish Front Desk system confirms the actual amount of product used by stylists. “Often, stylists get busy and forget to account for all product mixed,” Nadia explains. “Having the front line double check what was mixed has enabled us to see even more profit without increasing service tickets.”

Data tells the complete story, and with software like Vish, these salons have found they can gather all the information they need to run their color businesses efficiently and profitably.

Schedule a VISH demo and see the system in action.

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