Pricing your services is the one thing you HAVE to get right from the start, but with so many variables it can get complicated real quick. As a designer and copy writer I know all the details can be presented with a great website that both educates your market and demands your worth. Entrepreneurship is in a league of its own and showing up to show how your better is key in profit growth.
The month of June has shown me a few of my own gaps so in my need to repair the nuances in service descriptions, updating price lists and extending the timings of the offending services, I am reminded that I serve people where they are, not for what's easy on me. You may find yourself emotionally discounting on the fly but it isn't serving you, your guest or the next booked appointment behind them. We start cutting corners and not providing the exceptional service we pride ourselves on. You have my permission to stop that, gracefully; and I'll explain why.
Psychology of Pricing
In the beauty industry, pricing is all over the place. From discount chains for haircuts to corporate Day Spas, stylists provide their craft in a range of price points. Clients are price comparing like never before and with a recession on the horizon it will become increasingly more so. This is not the time to start advertising 25-50% discounts, that will have you working twice as hard and losing revenue. Instead, double down and provide a few amenities that cost just cents on the dollar to execute. Lavender essential oil in the towels, provide pre visit phone calls to confirm service and give answers to any concerns or even a thank you card for post visit follow up.
Cheap pricing will attract cheap or complicated people with high expectations and zero respect. People just want to feel of value in this world and it looks different to everyone. Marketing studies have repeatedly shown us that humans equate value with pricing.
What is value?
https://www.merriam-webster.com/dictionary/value defines as:
1: the monetary worth of something : MARKET PRICE
2: a fair return or equivalent in goods, services, or money for something exchanged
3: relative worth, utility, or importance
4: something (such as a principle or quality) intrinsically valuable or desirable
5: a numerical quantity that is assigned or is determined by calculation or measurement
1: to consider or rate highly
2a: to estimate or assign the monetary worth of : APPRAISE
b: to rate or scale in usefulness, importance, or general worth
: of, relating to, or being a brand of inexpensive products marketed as an alternative to other, more expensive brands
With all that being said, you can see why defining your value can get complicated. What's valuable to you may not be valuable to your target market, and that's our goal; attracting that niche audience that loves your brand, your product and service. After you have done the work to define your perfect market you have to throw in the other variables, your business expenses. The rent, the digital subscriptions, ad spend, product overhead, insurance and payroll. You set the pricing but it's never all profit.
I got incredibly lucky with my lease, the landlord is a humble and energetic man that just wants to earn an honest living; but a lot of real estate is owned by corporate entities that are following the inflation in the economy so rent and mortgages are high and rising. You want to find a location that will allow you to be in price point of your target market so that plays a factor in your pricing too. I have had a few double takes from new guests because in their price shopping, I have come in significantly lower than nearby competitors. I quickly reassure them of my value by educating on the methods, the ordering time and after care. I don't want them to choose me because they perceive me as being cheap. I priced my luxury service affordably because I can afford to. With all the amenities that I have built into my pricing, a guest would be hard pressed to find that with those competitors.
If you price too low, however, you could be minimizing your visibility to those clients you're seeking. Think about it, you can filter price point in real estate and retail search engines, and social media has the ability to provide a $$ rating on small business pages. So don't undercut yourself by trying to be competitive with the business down the street.