Let’s not beat around the bush – it’s hard out there in business. Perhaps you’re thinking of having a sale? Some money is better than nothing, right? Well… my advice regarding “having a sale for the sake of a sale” on salon services is a simple, hard, no.
By all means, offer promotions to your current/loyal client base. On the other hand, attempting to claw in “bargain hunting” customers with agressive discounting does not gain you a long term customer willing to pay full price. Let’s take a look, shall we?
Scenario 1: You serve an upscale market.
Wrong way: Offering a discount of any kind to this group is surprisingly dangerous. To your wealthy customers, the salon’s premium experience — and premium price — might be something to be proud of, not negotiated. Offering discounts can even cause some of them to flee for more pricey pastures.
Right way: Your salon already offers a premium experience at a premium price. Instead of a sale or a discount, why not offer bonus features, like a complimentary treatment if a customer fills a chair after a late cancellation. It’s a savvy way to say thank you, and you’re still charging full price for your work.
Remember – you aren’t your client’s accountant. It isn’t up to you to decide what they can afford. If they are booking in with you, they are willing to pay.
Scenario 2: You’re offering a 10% off discount.
Wrong way: You spring the savings on your client at the last minute by saying “Normally, this facial is $100, but today it’s only $90.” This is an unnecessary time to spring a discount on a customer. You’re already well on your way to closing the sale, and offering a discount that late in the game cuts into your credibility and makes you appear a little pushy.
Right way: You’re upfront with your customer on the initial phone call and say “Just so you know, we’re offering a 10% discount on all products until the end of the week.” Your customer will appreciate this inside info, and she may even pop in to snag a favourite item or three even if she doesn’t have an appointment until later on.
Scenario 3: You’re discounting the *wrong* services.
Wrong way: You charge $20 for a brow shape and tint which is your most frequently booked service. You then decide to slash this to $10. That should lure in more customers, right? (Despite the bulk of your clientele booking this service anyway) Taking approximately 15-minutes to perform – say you are paying your beauty therapist $25 an hour. Forking out $6.25 on labor, $1 on back bar, another $1 for overheads (power, laundry, credit card fees)… soon we have arrived a measly profit of $1.75! You could be making $11.75 instead with clients who would happily pay full price anyway.
Right way: Know your profit margins and look to services that cost little to offer. Discount those! How about $25 of labor + $12 backbar/overheads for a $120 one-hour facial (not to mention the chance to upsell skincare products)? At full price bringing in $83 leaves room for discounting while still profiting. (Or you could stick to your $10 brow shape and tint and net $7 in the same hour)
Business is a simple formula: Price – Cost & Overheads = Profit. Too often salon owners forget to look at the cold, hard numbers. If you know your service costs & profit margins, you can then make calculated decisions.
Discount Smarter. Not Harder.
If you feel the need to discount – be wise. Take the time to consider your treatment arsenal. What treatments can you afford to discount? Or better yet, don’t discount at all. Be smart and charge your worth.
