Do you feel like you were meant to have a kick-ass career as a hairstylist? Like you got into this industry to make big things happen? Maybe you’re struggling to build a solid base and want some stability.
Maybe you know social media is important, but it feels like a waste of time because you weren’t seeing any results. Maybe you’ve already had some amazing success but are craving more.
Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy.
When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, Social Media and Marketing Strategist just for Hair Stylists, and this is The Thriving Stylist Podcast. What is up and welcome back to The Thriving Stylist Podcast.
I am your host, Britt Seva, and today we’re talking about when to decrease your prices. This is something I don’t think I’ve ever talked about in the podcast. I’ve coached a very small handful of stylists through it.
It’s not something I coach too often. We’ll talk about why somebody would consider decreasing their prices when it’s appropriate because there are times where it is. What can happen if you do it wrong?
What can happen if you do it right? We’re just going to explore the conversation. Generally speaking, when people come to me asking about decreasing your prices, it’s for the wrong reasons.
But there are a handful of times where I will tell a stylist or a salon owner straight up, listen, because of the decisions you’ve made, we have to consider a price decrease. That doesn’t always mean income decrease.
If we do it correctly, it improves your market position and all other things. You should come out ahead. If we decrease your prices and you make less money, we have bigger fish to fry.
We’re going to just explore all of those things too. Let me tell you a little story first about my first experience with a price decrease. It actually happened in my own salon.
I was naive and relatively uneducated and young and impressionable and did not know what I was doing. But it was good to have this experience to realize when to do a price increase and when not.
We had a stylist, she was a veteran stylist who had been doing hair for years. She was just in a different season of life where she was a bit more focused on family.
I want to say she had decreased from five days a week to four, and was just not in the season of life and business where you were peddled to the metal looking to grow super fast.
She was still very into her client, very into her craft, but she wasn’t hungry to grow.
Because of that, what had happened is for years, the first years I worked with her, she just came in and served her clients and did great hair and then would leave. And she did that for a few years.
And what happened was slowly over time, demand and interest in working for her waned, massively waned. She wasn’t getting referral requests. She wasn’t really working to build her own business.
The front desk wasn’t able to fill her and build her because she was operating at a higher price point than most of the rest of the team. And so what she thought was, you know what, my price point has just become too intimidating.
And if I were to offer what I offer but at a lower rate, there’d be more interest in working with me. And so she said to me, like, listen, I’d really like to do this. She requested it.
She said, I’d like to decrease my prices by about 20%. I feel good about it. And I said, I feel really nervous about it.
What’s the plan here? Like, we’re going to cut your prices. And I was like, I don’t know how we’re going to explain this to your client.
This is my first time doing this. And I said, and also, I’m really worried about your well-being. How are we going to cut your prices and make more money?
And she’s like, oh, no, no, it’s going to take care of itself because we’re going to cut my prices and then my chair is going to fill because all of the stylists are operating at a lower price point are doing so much better.
And she was insistent and we pulled the trigger. And to this day, I regret it. And I wish that I knew them what I know now, because I mean, fast forward to the punch line.
She did not make more money. She did not grow any faster. And knowing what I know now, the reason that happened is all we did was reduce her prices.
There was no plan around it. There was no insulation around it. Now, was she wrong in reducing her prices?
No. Actually, honestly, she was probably overpriced by more like 40%. Like, I don’t think the 20% was aggressive enough.
The part that we did wrong was not the price decrease. I think she was right on that one. The part that we did wrong, and I’ll take the blame, the part that I did wrong was I didn’t have a plan to build and grow her in the new market.
And that was just naivety and inexperience on both of our part, probably. And fast forward also, she’s gone on to have an amazing career. She’s still doing hair.
I hope she’s well. All the things. But when you, you can’t just decrease prices and build your business.
Sometimes it’s absolutely devastating and sometimes it’s absolutely required. So in the years since then, this is, gosh, almost 20 years ago now. In the years since then, I’ve learned a lot about price decreases.
I’ve navigated several stylists through them effectively. And this episode is dedicated to that.
5:21
Reasons for Price Adjustment
So there’s three primary reasons where I do suggest any stylist considering a decrease. The first is going to be when you move. And it can be when you move across the country or when you move down the street.
Anytime you make a move, there is a chance that a price decrease should happen. Sometimes when you make a move, a price increase should happen, right?
So to round that out, whenever you’re making any kind of move, there is a pricing reestablishment that takes place. So let’s say somebody is moving from, let me pick a random Midwest state, you’re moving from Arkansas to Manhattan.
And let’s say that you are like the most talented stylist in Arkansas. Well, the economy in Arkansas versus the economy in Manhattan are extremes.
I think Manhattan is one of the most expensive cities to live and work in in the United States, if not the most expensive. It’s in the top three for sure. Versus Arkansas is a much more affordable area.
If you were incredibly skilled, incredibly talented, couldn’t do New York hair, I mean, your price point could easily triple when you make a move like that.
Not necessarily you’d have to be playing in that big dog arena to charge the big dog prices, but you might be.
Versus if you were a stylist who was living in Manhattan and your family bought land and was like, you know what, we’re going to move to Arkansas and we’re going to do this totally different thing, you would have to take a price decrease.
There is not a chance that you could charge Manhattan prices in the Midwest like that, in a small Midwest community, no way. Now there’s other, I’m using Midwest like a general term.
I know there’s big Midwest cities where you can charge big prices, but I’m trying to use an extreme to just show you, when you make a move, that happens. Now, what about local moves? Let’s talk about all different variations of local moves.
I think the New York to Arkansas thing is pretty obvious. When you’re talking about a more local move, not so much. So I just coached a stylist through this actually, so I’ll tell you that story.
There’s a stylist that I work with who is moving from a larger scale commission salon, more high-end to a booth rent. Has to take a price decrease. Has to because the expectation of the client is going to change.
The environment is going to change. The setup of the stylist is going to change. So the price point has to change.
When I was explaining this to the stylist, there was a lot of pushback. But then when we looked at positioning, I said, okay, let’s do some market research.
Let’s run you through the Thrivers Pricing Calculator, and it became very apparent that shifting the price point was completely the right move because all of the logistics of the business had changed when the location changed.
This is not a new city, same city, different salon location, different price point.
Now, what about, I encounter this a lot where somebody will say like, oh, you know what I was doing here in such and such city, and I’m going to move to another city that’s 20 minutes away, that’s closer to home. Should I change my prices?
Sometimes, yeah. And again, sometimes up, sometimes down, but a recalibration of prices with any move is required.
If you are moving at any type of way, I want you to run yourself through the Thriving Stylist Pricing Calculator or whatever pricing tool you use, because if you move and are overpriced or underpriced, it’s going to work against you.
Now, what I will say is, if you are moving and it looks like a price decrease is necessary, make the price decrease at the move. Make the move, lower the prices.
If you are realizing you’re making a move and your prices should go up, raise the prices at least 90 days after the move. Because with a move, you want it to be as enticing as possible to come to see you.
If it’s like, wait, I need to adjust to a new location and I have to pay more, it’s a barrier to entry. We never do that. So if you’re thinking about a price increase, don’t do it at the same time as a move.
Do it as a delay. It’s just too much information to take on for a client. If you are doing a price decrease, do the price decrease at the time of the move.
So big difference there. Okay, next, when you change your service experience. So if you are simplifying, if you are going to be going faster, if anything in your service experience is changing, you have to reconsider pricing.
Now, I used faster as an example. I’m gonna have a caveat to that because it’s not an all-encapsulating rule there. Time is money.
And if you can be incredibly efficient in the way that you do somebody’s services, sometimes you can even charge extra for that.
Like for me, if somebody could do my full root touch-up and a blowout in under an hour and have 100% coverage, I’m super interested in that. And there’s some stylists that I know have really mastered that.
And before any of you talk about processing time or whatever, there’s little tricks that they use, not chemical-based, that are able to make that possible. And I think it’s really interesting.
And I’m watching a lot of stylists really master that specialty of efficiency. So, sometimes when you’re being super efficient, you can charge top rate.
However, if you are slow, sometimes you actually need to charge a little bit less, because again, time is money.
So, if you change your service experience, like if you’re trying something new and you’re a little slower at it, or you have gone from something that was more elevated to more simplified, you can’t just take the gravy with that.
There’s a chance that you might have to take a price decrease there as well. And we’ll dive a little bit deeper into that in a moment.
And then, number three, if you know you’re overpriced and it’s affecting demand or retention, some of you listening to this are like, oh shoot, this episode’s for me. I think I’m overpriced in my market.
And the reason why you think you’re overpriced is generally speaking, we see it in two areas of business. One is demand, meaning new guests interested in working with us.
And number two is retention, meaning we’re having a hard time keeping our long timers, our OGs, our bread and butters, our regulars, whatever we want to call them. If you’re starting to see a softening there, there’s a chance that you’re overpriced.
We’re going to diagnose that. So just to recap, there’s three reasons why you’d consider a price decrease. Number one, if you make any kind of move.
Number two, if you ever change your service experience at all. Or number three, if you know you’re overpriced and it’s affecting your demand or your retention.
11:22
Evaluate Your Pricing
So before you decrease your prices at all, if you’re like, okay, ears open, this might be for me. Here’s the questions we ask ourselves. Number one, do you know what your price point should be?
It is mathematical and scientific. It’s not a guess. It’s not something you ask about in a community Facebook group.
Because let me tell you, I’m in all the community Facebook groups and I’m reading all the questions around. How much is everybody charging for a partial highlight these days? How much is everybody charging for a haircut these days?
How much is everybody charging for a root touch up these days? All of those posts with literally hundreds of comments on them. It’s irrelevant data.
Completely irrelevant. It doesn’t matter what somebody is charging down the street from you. It seriously doesn’t matter.
The pricing is fully contingent on the seven factors that affect you and your business. And if you want to know what the seven factors are, you can just Google search Thriving Stylist Podcast, Seven Factors of Pricing.
I have a whole episode on it you can listen to. You need to know what you should be priced at first and foremost. Don’t make any emotional decisions around your business.
Now, if you have that data and you know what you’re supposed to be priced at, and you’re a little high or you’re a lot high, we move on to question number two. When you set your prices, how did you do it? Did you do it based on emotion?
Did you do it based on a Facebook group post that I just mentioned? Did you do it because you did research and you looked at what others in the area were charging and it felt right?
Do you do annual price increases by rule where it’s like every year it just goes up by five bucks? Did your salon set your prices? Any of those strategies, in my opinion, are incorrect.
Everything I just rattled off is wrong. There’s a chance that you’ve been incorrectly priced for a long time. When we talk about pricing decrease, you might not actually be decreasing.
You might be marketing yourself correctly in your market for the first time, literally ever, which goes back to question number one. Do you know what your price point should be? Then we go to number three.
When you last raised your prices, why did you do it? Was it because your demand was high and you felt like it was the right thing to do? We don’t always raise our prices when demand is high, but sometimes we do.
Did you do it because you took on a cost of goods increase? That could have been a huge mistake. Why did you raise your prices last?
If you did do a cost of goods increase and you’re noticing a decrease in demand or retention, that is something I would really take into consideration.
I said from the start, the price of goods increases that became very popular in 2021, 2022, 2023, were dangerous and risky. We’re seeing a lot of the backlash of them now. It always takes a bit of time for these things to have the impact.
If you fall into that category, I want you to listen to this episode. I am never of the belief system that a stylist or a salon should just fall on the sword when cost of anything goes up.
But you can’t just pass that cost along to a client and expect everything else in your business to run the same. When any business does that, they see pushback. Did you see there was a big announcement?
This was over the summer. McDonald’s announced they’re actually reducing prices across their menu because they realize they overinflated.
If cost of goods increase can affect a multi-billion dollar brand like McDonald’s at such a scale that they walk it back and decrease their prices, you’re not too good for it. So I understand you have to cover increased costs.
There’s better ways to do it than just passing it on to your client and assuming it’s going to be fine. So if you did a cost of goods increase, you could fall into this category. Next question, are you actively marketing yourself?
So this is where the plot thickens because often people think, my demand is low, I did do the cost of goods increase, I probably need to reduce my prices. Not so fast.
If you’re not actively marketing yourself, there’s a chance you’re priced totally fine, but you have a broken marketing funnel. We do this a lot, a lot, a lot. I get a lot of requests from stylists who say like, can you give me some pricing advice?
The first thing I do when anybody asks me for pricing advice is I look at their marketing. Nine times out of 10, their pricing is just fine, their marketing is lacking. We’re looking at the wrong direction.
It’s a quicker, easier fix for a stylist to adjust their price than it is to learn how to market themselves. For all of us, we always go to the quick, easy adjustment.
If you’re not actively marketing yourself, I actually encourage you to look there first. When we get tactical in just a few minutes, I’m going to have you take a look at that as well.
Next question, does your marketing and perceived value match your guest’s experience? You might be marketing yourself but the marketing doesn’t match the price point.
You’re marketing yourself like a $60 haircut stylist when you want to be charging $130. That’s not going to work. That’s going to feel like a disappointment when somebody sits in your chair.
If your marketing efforts are lackluster, your pricing probably should be lackluster too. Perceived value, and you can also Google Thriving Stylist Podcast, Perceived Value, I have a couple of podcasts on that.
Perceived value is what the consumer or the client or people who are checking you out think you’re worth. I know there’s the whole charge your worth movement. I think we’re still reeling from that too.
Huge mistake. Your worth is not determined by what you feel in your spirit. Your worth is determined by what the market is willing to pay for you.
I know you’re worth a million bucks. Trust me, I get it. If you’re not marketing yourself that way and if the perception of you and your business and your work isn’t valued at that, you don’t get to charge it.
So again, going into the marketing and the perceived value doesn’t match the price point. Next question, are you having a retention issue? If you’re having a retention issue, it could come down to guest experience or pricing.
So we want to look at both of those things. Again, we can’t just focus on the price point. It could be that something changed in your guest experience, which we talked about as one of the three reasons, right?
Something changed there and that really needs to be resolved. Or it could be the pricing, but take a look at your retention and see if retention is working for you or against you.
If you’re finding there’s two different retention metrics that we like to count. If you’re finding that your base clientele retention is actually quite good, but your new guest retention is not good, it’s probably actually not your pricing.
As long as new guests and existing guests are paying the same thing, I don’t think pricing is to blame. I think marketing is to blame. So we want to make sure we troubleshoot all of these things.
And this is why retention is so important. And it’s so critical to look at both new guests and base clientele, because they’re telling us two very different things about your business.
If your existing people and your long timers are happy campers at the price point they’re at, and new people would be paying the same price point but are not wanting to stick around and pay it, it’s likely a new client experience or a marketing
challenge, not a pricing issue. So look there first. And then lastly, and this is the one that’s kind of a kicker, what has changed in your business or your life in the last 18 months?
There was another stylist in our salon who saw a massive drop in revenue, like 30% in six months. And when it happened, this person felt really blindsided.
And the elephant in the room that we weren’t talking about is that this person’s life had been in turmoil for months and months and months.
And they were showing up every day and working super hard with a smile on and being just as wonderful as they could possibly be. But that energy was radiating out, and clients could feel it.
And it just was having this negative impact on their business. Changing the price point wasn’t going to fix that. And we did not change this person’s price point, by the way.
Instead, we changed guest experience and marketing and all the other factors. But that person had to reflect on, wait a second, it’s not my price point. It’s not that I’m not going to do it here.
It’s not that nobody wants to see me. It’s that I need to do a little work on myself and recharge my battery a little bit before I can show up in full. And then once we turn that corner, everything was fine again.
So it’s not always the price point. And going through this series of questions will help you to understand, do I really need to adjust my pricing or is something else going on in my business?
Now, going back to the first criteria, if you move, you still got to check. If you change your service experience, you got to check that price point.
And number three, if you know you’re overpriced and it’s affecting demand or retention, you have to consider that price decrease.
But, like I said, before we do the decrease, you go through that series of questions and just triple check that a decrease really fits what you’re looking for.
19:37
Strategic Price Reduction
Now, if you run yourself through the Thriving Stylist Pricing Calculator or any pricing tool and you realize, like, you know what, I think I am priced above market. I do think my guest experience is slacked.
I think I’m having some issues here and I really think I’m a candidate for a decrease. First of all, would love to help you through that in Thriving Stylist Method and instead of having you wing it.
But if you’re not coaching with me, I’ll just give you some general advice. If you decrease your prices and you know scientifically, based on everything that I just shared with you, it’s the right thing to do, you do it for everybody.
That’s the piece that’s the most scary and that’s why it’s important to do this correctly. You don’t just do it for your existing clients, you don’t just do it for your new clients, you do it across the board.
You never create multiple price points in your business, ever. Everybody should be paying the same thing. For a lot of reasons, I have podcast episodes on that, too.
Legacy pricing will not work for you. Offering discounts to long timers will only be like shooting yourself in the foot. It’s not a revenue increasing strategy.
When you run the math on it, it doesn’t pan out. So you want to make sure everybody is charging the same price or is being charged the same price, I should say. So if you decrease, it’s across the board.
Before you do a decrease, I want you to improve your marketing for at least 30 days, like consistently have a marketing plan, roll it out, update your marketing funnel, update your website, update your social media.
If you don’t know what a marketing funnel is, search Thriving Stylist Podcast marketing funnel. I have a bunch of episodes on it. Make sure that your marketing is where it’s supposed to be for at least 30 days for two reasons.
One, you might find that your demand increases just from that, and you don’t even have to do the decrease and you’re going to feel like a million bucks, which is amazing.
Or two, it’s going to set you up for massive success with this decrease and help to fill your chair so that you don’t lose money.
This was the mistake I made with that stylist I was coaching 100 million years ago, and I shouldn’t even call it coaching. It was a team member of mine. Neither of us knew what we were doing.
We were the blind leading the blind. I didn’t have an owner who was mentoring me through things like this. I was just figuring it out myself.
And so this was what we came up with, and it wasn’t the decrease that failed her. Like I said, she actually probably should have taken a heftier decrease. What failed her was we didn’t buffer it with a marketing strategy.
You have to buffer a decrease with a marketing strategy. I cannot emphasize this enough. And the marketing is not, this is exciting.
I have a price decrease. It’s just regular, good, what we should be doing all the time marketing.
And it’s like typical traditional marketing funnel, target market, branding, website that is banging, great social media channels, driving awareness to those channels. It’s all of the basics, all of the standards.
All those wheels have to be firing first. Otherwise, you’re just going to lose money. So make sure that you do that first.
Now, if you’ve done all these things, you’ve run yourself through the pricing calculator, you’ve improved the marketing, you know your guest experience is amazing, your website is off the chart, your social media is amazing, and you really just did
overprice yourself, and you need to get back to basics, or you made a move, and you really need to price yourself properly for the new city that you’re in. If you’re pricing yourself properly for the new city you’re in, great news, no harm, no foul.
You just change it on your website, and that is the price. If you made a move, let’s say you’re the stylist who made a move to a town that’s 20 minutes away from where you were, and you’re choosing to do a decrease because it really does make sense.
I have some verbiage for you. What you’re going to say is, I’m really excited to share that with my new move, I’m actually operating at a different price point, and for you, it’s a little bit lower.
Actually, you’re going to be paying X today instead of Y. You just call it like it is. With this move, I’m really excited to share I’m operating in a new price point, and here’s what it is.
That would be for a client who’s made a move with you, and they need to know. If you’re making a move across the country, you say nothing. You’re in a new market where people don’t know you anyway.
You make sure you’re priced properly. You go through all these questions that I shared, but if you were charging one price working in Seattle, and now you’re at a new price in Dallas, it just is what it is.
Nobody needs to know the backstory, so you just price yourself properly, even if it’s a decrease. No story needed. Update it everywhere.
Now, what if you’re like, Britt, I’m not moving. I really overpriced myself. Or, my stylist overpriced me, and I just need to work it back because I’ve done this incorrectly.
I’m having the retention issues you’re talking about. My marketing is fine. That’s not the problem.
I just really am overpriced. I did not know what I was doing when I was making up my price point. I know it’s working against me.
All the indicators are there. What you do is you follow all the steps I just shared with you. You find out what you should be priced at, and you settle on a decrease that makes sense numerically, not emotionally, but numerically.
You price yourself properly for your market, and again, you do it for everybody. I know this is going to feel scary, but remember, we’ve buffered it with marketing.
The verbiage for your existing clients is, I’ve shifted my pricing structure, and for the services you get, it’s actually going to reduce your rate.
It doesn’t need to be this big, huge high production, like I’m actually looking to build and grow my business, so I marked myself down. That screams drowning. We don’t want to scream the message of my business is suffering SOS.
We never want our verbiage to say that, so I’m going to say the verbiage I would suggest one more time. I’ve shifted my pricing structure and actually for the services you get, it’s going to reduce your rate.
You almost say it as like, I can’t believe it, but for you, you lucky, lucky winner, it’s actually going to be less.
What you’re going to find when you do that is often the gratuity increases for people who have been loyal to you and are happy seeing you. It really helps to soften the blow.
It allows you to feel confident and not small, and it ends up being a really positive thing, and then you just market the new price point to new people coming in. So I hope this has been clarifying.
If you have any additional questions about price decreases, you can find me on Instagram at Britt Seva, or you can leave me a rating or review on iTunes at the Thriving Stylist Podcast as well.
So much love, happy business building, and I’ll see you on the next one.
