11 Tips to Help Increase Beauty Salon Profitability
Posted: Tue Jan 21, 2025 10:52 am
Source: shutterstock.com
The issue of correct pricing is probably the most important for any entrepreneur. And the salon business is no exception.
How can you find that golden mean so as not to scare away clients and not end up in the red?
In the vast majority of cases, studio owners act on intuition: some set prices for services, as they say, “out of thin air,” while others, without thinking twice, copy their closest competitors (most of whom also set their prices intuitively).
The most advanced physician database ones tie the prices of their services to the exchange rate of foreign currencies, and there are also those who simply dump in order to push their competitors out of the market and take their place.
As a result of such "violent activity" at the beauty industry enterprise, a price list with unreasonable prices for services appears. And customer loyalty and the profitability of the entire business depend on these prices.
Therefore, the issue of pricing, especially in an unstable economy, must be approached very thoughtfully and an attempt must be made to adhere to a differentiated approach in servicing one’s clients.
1. Differentiate prices for services
In the conditions of the economic crisis, a differentiated approach to pricing will help the studio to significantly smooth out the price increase. For example, if your salon employs specialists with different levels of qualification, then you can also set different prices for their services. Thus, the higher the professionalism of the master, the higher the cost of the procedure, and vice versa. This will help you retain those clients for whom price is the main criterion for choosing.
On the other hand, the more in demand a specialist is, the higher the brand recognition and demand for your salon's services. The presence of diplomas and awards among the masters also speaks in favor of a differentiated approach.
2. Calculate the profitability of procedures
Calculate the profitability of procedures
Source: shutterstock.com
The key point in setting prices for services is calculating the profitability of each procedure separately, since this indicator is entirely extrapolated to the profitability and payback of the entire establishment. Forming an adequate price for a service includes studying competitors, assessing the level of the salon and the process of calculating the cost of the service. Particular attention should be paid to the quality of the materials and equipment used, thereby showing concern for the client and his satisfaction. By collecting and generalizing the obtained data together, we get adequate prices for services in the beauty industry. During the period of global economic instability, experienced market players, in order to maintain their competitive advantages, first of all do not increase prices for services, but optimize business processes, implement advanced scientific and technical developments, and promote the development of their personnel competencies. All these measures taken together allow not only to keep the business afloat, but also to actively increase the pace of development even during a crisis.
3. Consider the purchasing power of customers
The issue of correct pricing is probably the most important for any entrepreneur. And the salon business is no exception.
How can you find that golden mean so as not to scare away clients and not end up in the red?
In the vast majority of cases, studio owners act on intuition: some set prices for services, as they say, “out of thin air,” while others, without thinking twice, copy their closest competitors (most of whom also set their prices intuitively).
The most advanced physician database ones tie the prices of their services to the exchange rate of foreign currencies, and there are also those who simply dump in order to push their competitors out of the market and take their place.
As a result of such "violent activity" at the beauty industry enterprise, a price list with unreasonable prices for services appears. And customer loyalty and the profitability of the entire business depend on these prices.
Therefore, the issue of pricing, especially in an unstable economy, must be approached very thoughtfully and an attempt must be made to adhere to a differentiated approach in servicing one’s clients.
1. Differentiate prices for services
In the conditions of the economic crisis, a differentiated approach to pricing will help the studio to significantly smooth out the price increase. For example, if your salon employs specialists with different levels of qualification, then you can also set different prices for their services. Thus, the higher the professionalism of the master, the higher the cost of the procedure, and vice versa. This will help you retain those clients for whom price is the main criterion for choosing.
On the other hand, the more in demand a specialist is, the higher the brand recognition and demand for your salon's services. The presence of diplomas and awards among the masters also speaks in favor of a differentiated approach.
2. Calculate the profitability of procedures
Calculate the profitability of procedures
Source: shutterstock.com
The key point in setting prices for services is calculating the profitability of each procedure separately, since this indicator is entirely extrapolated to the profitability and payback of the entire establishment. Forming an adequate price for a service includes studying competitors, assessing the level of the salon and the process of calculating the cost of the service. Particular attention should be paid to the quality of the materials and equipment used, thereby showing concern for the client and his satisfaction. By collecting and generalizing the obtained data together, we get adequate prices for services in the beauty industry. During the period of global economic instability, experienced market players, in order to maintain their competitive advantages, first of all do not increase prices for services, but optimize business processes, implement advanced scientific and technical developments, and promote the development of their personnel competencies. All these measures taken together allow not only to keep the business afloat, but also to actively increase the pace of development even during a crisis.
3. Consider the purchasing power of customers