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5 Tips for Effective Service Pricing and Price Management
Pricing is one of the most important business decisions you will ever make as a haircutter. Here are five tips for effective pricing and price management.
April 16, 2018
Ivan Zoot, licensed barber, cosmetologist, certified personal trainer and author.
1/2
2 min to read
Pricing is one of the single most important business decisions you will ever make as a haircutter. Here are my top five tips for effective pricing and price management.
Do the Math – Calculate the REAL cost of delivering a single haircut in your business. Do the math on the profit you need per haircut to achieve business goals and levels of profitability. This data will dictate your minimum haircut price for your business model to operate. Survey the competition to determine where you can fit based on your price objectives and your service delivery expectations. Price smart form the start.
Full or FREE – Charge full price or give it away for FREE. Calculate a proper, fair and effective price for a haircut and stick to it. Or give the haircut away for FREE. A $50 haircut is a $50 haircut. A $50 haircut with a 50% off coupon is not a $50 haircut, it is a $25 haircut. A $50 haircut given away for FREE is still a $50 haircut in the eyes of a consumer. Maintain price integrity and perceived value.
Catch A Lyft – Take a page from ride share services and implement demand-based surge pricing. Charge 10 or 20% more for Saturdays, Thursday evenings or whatever are your overbooked peak times. This is not a discount every other time. It is a demand-based surge.
Time for Tiers – Every cutter in the shop has a different level of experience and a different volume of traffic. Use tiered pricing to manage supply and demand. Use tiered pricing to reward sales growth, success and performance. Be sure to clearly post pricing and tiers. Be sure to denote who cuts at what price. Perhaps an agreement that walk-in traffic is taken at a “shop price” and request traffic falls into the tiers makes sense. Walk-ins are not allowed to request at “shop price.”
Raise by Occupancy – Use rate of chair occupancy as the metric by which price increases and tier promotions are based. When a haircutter can run +80% occupied for six weeks straight they are ready for a 10% bump in the haircut price. They will generate 10% more revenue. If their occupancy falls off a bit they are making more money with air in their book for referrals and growth.
Ivan Zoot AKA ClipperGuy is your haircutter coach.
Connect with Ivan at clipperguy.com for help with pricing and other elements of managing and growing your haircut business. He offers phone coaching as well as his latest book Be A $100,000 Haircutter.
Originally posted on Modern Salon
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