Pricing isn’t just a mathematical equation, it’s a psychology and a strategy. Pricing is Maths +Marketing + Mindset.
When it comes to pricing our services, we often think we need clients immediately knocking the door down and queuing around the corner to be able to make our business work, so we mistakenly assume that low prices = lots of clients quickly.
Unfortunately, low pricing or competitive costs rarely deliver the desired outcome. Sure, we might get lots of appointment requests initially, but we will often end up with a salon full of less-than-ideal clients that only ever seem to want MORE from us –more discounts, more flexibility, more of everything – without ever giving us MORE money! That’s because our low prices communicated to them exactly how we felt about ourselves when we set the menu – desperate. This is a fast road to financial ruin and mental burnout and before we know it we are working longer hours to make the maths add up.
So, why do we price ourselves this way?
In reality, so many of us price ourselves low out of fear of losing our clients. This couldn’t be further from the truth though.
Pricing yourself like the other local salons doesn’t set you apart, it just puts you in direct competition with them. Do you want to compete for clients? Of course you don’t. You want loyal clients that appreciate the work you do and the skills you’ve invested so much time in gaining.
Competitive pricing conveys alack of quality and value to your clients; people know they are less likely to get what they’re paying for because high quality never comes cheap. The clients you seek understand that a quality product or service takes time and costs money. Quality colour costs more than budget colour and a high level of skill takes a large investment of time and money to achieve.
High prices don’t just communicate quality, they also communicate a far more important message of luxury, exclusivity and status. When we see a high price tag on a luxury product or service, we assume that it’s out of the reach of many, which is exactly what drives us to want to purchase it. What your clients are looking to buy from you isa feeling – a feeling of being part of the upper class, the wealthy 1% that can afford such things. A feeling of higher status.
As humans, we are in a constant state of flexing our status. However, that status isn’t always about buying the most expensive item, you also witness it within other social groups like veganism or eco-warriors – they are all looking to be the ‘best vegan’ or the ‘most-concerned eco-warrior’.That’s not to say these things are bad, but once you understand this little piece of human psychology, you can see how easy it is to charge your worth or increase your prices.
Ultimately, this is why you will shed less than 1% of clients when you do a price increase or a menu overhaul, and it’s why you’ll start receiving more booking requests too. It’s because your perceived value has just risen with your prices.
Remember, high prices will not put off loyal clients that value skill and quality, low prices will though…
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