Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? 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 aren’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.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host, Britt Seva, and we have got to talk about pricing dos and don’ts in today’s economy.
I have definitely talked about this in the past. This is not my first rodeo talking about this even in the last couple of months, but I think this is going to be a talking point that we’re going to continue bringing up for the next, I don’t know, year or 18 months. Because the reality is we’re in a recession, things are changing, consumer behavior is changing really fast.
Do you know the economists are saying that the consumer behavior of today has adjusted 10 times faster than average? There are people who spend their entire career studying consumer behavior.
When you look at companies like Toys R Us or Bed Bath and Beyond was the most recent one, these were multi-million companies that have done billions of dollars in revenue over the years who have declared bankruptcy. Why did they declare bankruptcy? Because they were once successful and they didn’t adapt.
Y’all, you are facing that crossroads. I know you’re not Toys R Us or Bed Bath and Beyond, but you are a business. Every business is at that crossroads of right now of can you adapt? What consumers are demanding we adapt to right now is not small. It’s pretty massive and I want you to make sure that you’re adapting properly.
One of the areas where I see stylists and salons making some fairly reckless decisions is in pricing and I want to really talk about those things today.
As recently as about 90 days ago, I released an episode, it was episode number 270, and it was called Pricing for the Market Shifts as a Hair Stylist. Go back and look at that. And then episode 269 is called Is Hourly Pricing The Future of Our Industry? Two pricing episodes that are definitely worth a listen in case you’ve missed them.
Now, quick summary of what I had talked about in episode 270, which was Pricing for the Market Shifts as a Hair Stylist. There were eight key points. I’m going to give you the Cliff Notes version of each.
I said consumer behavior is mid-shift, which is still true. If you price yourself above the market, you’ll be shooting yourself in the foot. Also, true. Beware of Ninja Turtles (we’ll talk about those today). Price is what you pay, values what you get. I want you to think about what is going to be your thing. Perceived value matters more than anything else. Small offerings will win and clear messaging will win.
Like I said, that was the Cliff Notes version. If you need to go back and listen to episode 270, I suggest that you do. But that’s the quick summary.
Let’s shift focus back to this episode, which is going to be on pricing dos and don’ts. Now, here’s the reality. We are in a season of inflation, radical inflation caused mostly by PPP loans and stimulus for the most part. When we look at the economy today, the price of everything has gone up, right? We’re like, “Whoa, everything is so expensive.” Yes, everything is so expensive, but also everything is relative.
Most people listening to this podcast, definitely not everybody, most people received either stimulus or PPP. The vast majority of Americans received one or the other, some did not. I totally understand when all that free money was given out, it’s not like there was a reserve that our government could pull from—we are in massive debt right now as a country—so there was no more money to give away. All that happened was the government turned the money printing machines on and the value of the dollar decreased. When you look at the cost for a box of cheese and crackers is now $3 more than it was three years ago, it’s simply because the money machine got turned on and we were all given more free money. The government is now recouping that as a way to balance out the value of the dollar.
Whenever inflation happens, historically, we think that prices will go back down because some things do, right? When we look at the housing market today—there’s a lot of housing markets that got really hot in 2021, 2022, and then they plateaued, and now we’re seeing a decline. In our minds, we tell ourselves, “Oh, great, prices are coming back down.” Yeah, prices for things like clothes or a washer and dryer or a car, or I’m going out to eat. Cost of food, going to the grocery store, those prices are not going to come back down. That doesn’t happen, generally speaking. If you go back in history, never has it happened, so that would be a first.
Generally like when prices are falling, like when we look at the home values that are now plateauing and falling, consumers delay making purchases because they think to themselves, “Cool, prices will be lower in the future.” The problem with that is it causes the economy as a whole to slow. Less income is generated by producers, and P.S., you are a producer as a service provider. You hope the economy doesn’t slow.
For those of you who are like, “Great, I hope the economy’s slow so that the cost of things go down,” the only time that would ever happen is if all of us start making drastically less money. So actually you generally don’t hope for that, and that causes the growth of the economy to stall. That doesn’t generally reduce inflation like historically never.
When you see things like the cost of homes are going down, so everything else should follow. The cost of homes going down is related to so many other things like mortgage rates going up and all of these other factors. It’s not relatable to day-to-day spending. So if you’re sitting around thinking, “Well, at one point the cost of everything is going to go down,” it is not and so it’s important to adapt our pricing to meet today’s reality without making massive mistakes.
So let’s start with the don’ts. The first don’t, and this might surprise you, is a cost of goods increase. Now, before anybody comes for me with that, I don’t mean that your cost of business hasn’t gone up and the client shouldn’t pay for that. They should, right? When you go to the grocery store, like I said, it costs more to buy a box of Cheez-Its. It costs more to buy a bottle of water. We, the consumers, are paying for it. I understand your client should pay for it too. The problem is, and I’m watching stylists do this in real time, and I’m like, oh friend, you’re going to be knocking on my door in three years and I’ll answer, but I’m going to be sad about it. A lot of people have been for the last couple of years doing this thing where they’re publicly saying, “The cost of me running my business has gone up and so I need to pass that price along to my clients. I’m sorry about that.”
What other business do you know that’s doing that? I don’t know of anybody else who’s doing that, so I’m not sure why we are. It sends a very negative message to your clientele of, “It’s become more expensive to run my business. I expect you to pay for it.” That’s, no matter how beautifully you say it, that’s how the message is going to be delivered.
Now, if instead you raise your prices and don’t say anything about cost of goods, guess what’s great news? You’ll make the money that covers the cost of goods and your clients won’t say, “Wow, I think that’s just so wild that they think that they can pass the cost of doing their business onto me.” I see so many TikToks right now of clients.
Have you seen the negative side of TikTok that is destroying our industry one post at a time? Talking about how stylists are so egotistical and that they are making up all these nonsensical charges. Y’all, we did that to ourselves. We cannot even be mad about it because people were talking about cost of goods increases and making these posts of “you would not believe how expensive it is to run my business.”
Again, does your doctor’s office ever say, “Let me tell you how much it costs to buy my stethoscope. Let me tell you how much it costs to do your blood draw.” No, it is what it is. The grocery store doesn’t say, “We’ve got to pay our cashiers $19 an hour now and it costs us an extra six bucks to get a bundle of bananas.” It’s too much. We’re getting way too in the details and it’s making us appear really unprofessional and it doesn’t have to be that way.
So we don’t do a cost of goods increase. Instead, we do what we should have always been doing and we use the eight factors of pricing to determine our prices.
One of those factors is our overhead, which does include cost of goods. There’s lots of different ways to get those metrics, but what we don’t do is just roll out a cost of goods increase. That’s just about the fastest way to lose clients and hurt your income overall.
Next, it’s going to be legacy pricing. For any of you who still have a business where you know your long-time clients get some kind of discount, oof. You’ve probably got the next year, maybe 18 months to sort that out. That is going to hurt your retention, your referrals, your income overall. It’s not going to do anything to build and grow your business.
Like I shared on the podcast last week, even doing discounts of $10 a guest will cost you tens of thousands of dollars a year. I know it’s much easier to have heightened pricing for new clients, but take care of your old clients so they don’t leave you. No, they won’t leave you, but they’ll be actively hurting your income every single day because the spot that could be worth 10, 15, 20, 40% more is now being offered at a discount. Legacy pricing is just about going to destroy you in today’s economy.
Negotiable price increases. I saw a video posted on Instagram a couple months ago that made me actually feel a little bit hopeless for a minute. It broke my heart completely. It was a stylist who looked incredible, kind, hardworking, driven, working hard on Instagram, head and heart were in a good place. She filmed this video and it was like, “Hey everybody, I want to share with you so that you know, I have to do a price increase and I’m happy about it, but for some of you it’s going to feel like it’s too much. I understand that because I care about you. So if you look at my new rates and they feel too high, let me know ‘cause I’m going to work it out for you.”
The messaging on that is so wrong. It’s one thing to raise your prices with confidence and verbally say to your clients, which P.S., I’m not a fan of sneaky price increases. Some people are like, raise your prices and don’t even say anything. You can do that. I hear people say that all the time. If you want to do that and it works for you, go for it. What I don’t like is when people make posts like that on social media and you roll out a price increase on social, on email, on text. That’s not the way to do it. When you roll out a price increase properly, it’s always done in person and it’s done with confidence and you let the guests know that the price increase is coming. If their body language tells you that they’re nervous, it’s okay to say, “Listen, I want to continue working with you and I want this to be something that’s comfortable for you. There are adaptations we can make to the services that you get with me where we can still absolutely work within your budget in that offering.”
It doesn’t mean that you offer that guest discount services, it means you adjust what happens while they’re in your chair to fit their budget. That’s normal, right?
Have you ever gone shopping for a special occasion outfit of any kind and you walk around and you find a suit or a dress or a hat or a handbag or whatever and you love it, but it’s totally out of your price range? Does the cashier say, “You know what? I love ya. I’m going to give you this purse for 20% off.” Rarely, rarely. What usually happens is the cashier or the salesperson says, “You know what, we have actually a really similar bag. It’s not quite the same. It’s missing some of the features, but I actually think you’re really going to like it.” You do the same thing with your clients. You are the expert. There are certainly other things you can do to make your guest happy, still allow the value of your time to be served, show up as the professional and compromise. But the way to do it is not to cheapen yourself and say that your prices are negotiable or that bartering is an option.
You don’t ever want to imply that. Whenever you roll out price increases, you also don’t want to appear lacking confidence. And whenever we do a price increase and we say things like, “But if that’s too high for you,” or, “But let me know if you don’t like it,” it makes you appear weak and it’s very difficult to build and grow from that place. We want to stay away from that next discounting services in any capacity.
I had somebody reach out to me in the DMs recently saying, “Hey listen, my salon has decided that they’re going to start running a lot of promotions and specials. Do you have any podcasts telling them how to do that?” I said, “Uh, no, because I would never advise that doing promotions and specials.”
When I joined the industry, it was the time of promotions and specials. I joined in 2007, which was right as the economy was falling apart. That was the Groupon era, the coupon clipping era, the discount era. That’s because the mortgage rate crisis caused people to literally lose their homes. The recession we’re in right now is based on inflation. It’s not lack of cash. There’s an abundance of cash. It’s not “Oh, insurmountable debt.” We’re in a really different place and space.
The game here is not discounts and promotions. If you do that, you will gain only bargain-hunting clients and what will happen is the value of the time you spend working behind the chair will decrease. You’ll not make more money. You might see more clients, but you’ll actually likely make the same amount of money or less, so you’ll be working harder for less revenue.
No discounts, not on long-time clients, not on new clients, no special offers, no bundles, nothing like that.
Next, change your price point and method at the same time. If you are changing your pricing method—let’s say you always charged a la carte and you’re going to hourly. Amazing. Change to hourly, do not increase your prices. The guest should at least for six months be paying the exact same thing. If you need to roll out a price increase after that, that’s great. I’m here for it.
I coached a stylist—it was late 2022—who changed her pricing structure and her price point all at once. She lost 30% of her revenue over a period of 90 days, and she was like, “Help me. I don’t know what just happened, but this is not good.” And I said, “You know, you simply changed too much too fast.” We worked it out, we made it, we made it happen, and over the next about 120 days, she was able to bounce back and recover, but it was painful and scary for her for a while and it was simply because she did too much too fast.
Slow down with the changes you make and then again, never announce your price increases on social media, email, or text. We always want to handle them professionally and in person.
Let’s get into the dos. That was the don’ts, so what about the dos? The dos are going to be to ensure your marketing and retention funnels are stellar before you take any kind of price increase.
A lot of people are saying, “I’m afraid to have a price increase right now with the shifts in consumer behavior. How do I know if I’m set up for it?” The massive shift in consumer behavior is expectation. That’s the biggest one and it’s expectation in two places. Your online presence and your salon experience. In-salon experience is going to win for retention. Online presence is going to win for attracting new clients.
What’s wild is the online presence expectation is shifting to website massively and I’m kind of getting mine in this moment because for years, I’ve been like, “The website’s critical, the website’s important, the website is everything,” and everyone’s like, “Oh no, Instagram is everything.” Well, now, the Instagram is waning really fast and engagement is at an all-time low and reels are plummeting. The platform is going through this identity crisis. Not stylists. I understand stylists are still embracing the platform.
If you research Instagram usership amongst the average consumer, not marketers, not influencers, the average consumer, it is an all-time low. Clients and consumers are burning out on the platform, so your ability to reach people there is simply decreasing and declining. It just is what it is, and so ensuring that your marketing and retention funnels are stellar and that your perceived value is high, not just on Instagram, but everywhere is very, very important right now.
If your marketing is soft, if your digital presence is soft, if your guest experience is simply average, price increase will be very difficult to swallow right now and it could have a negative impact on your retention and your overall income.
Next, raise your prices based on metrics, not emotions. Again, using that eight factors of pricing increase I covered that in episode 221. I have an entire system and calculator and toolset available in Thrivers Society for you if you need help with that. But don’t raise your prices based on fear or emotions and heck, don’t stall out on a price increase because of fear or emotions. If you’re due a price increase, pull the trigger and do it. But you need to make sure you have that perceived value to back it up so that clients don’t get the wandering eye and don’t start to say, “Well, Britt was always great, but I don’t know if it’s worth investing at this rate anymore now that her rates have increased,” right?
Next, understand that this will not be the recession of 2008. Couponing is not going to win. Stellar marketing and guest experience is going to be the critical recipe right now.
Next, incorporate more flexibility into your service menu. Mini-maintenance services, low maintenance options, finding a peer at a lower rate you can refer to.
Y’all, you are not for everybody, right? If somebody says, “You’re great, you’re raising your prices, I just can’t do it,” say, “I completely understand and I still deeply care about you. I actually have a peer, his name is Sam, and I think that you would love working with him.” That would be a gift and a blessing to your clients and to another stylist. Like rising tides lift all boats, find somebody else that you can refer to if you are raising your prices so your clients have other viable options.
Last, please know, the glass ceiling has been raised. For every stylist struggling right now, there’s two who are blowing the heck up because we have really dialed in what it takes to build and grow a business as a stylist or salon owner today. It’s not about guessing. It’s not like if you put in the time it’ll pay off. It really is formulaic, so please know that we’re at this season where what it looks like to build a clientele as a stylist or salon owner has radically changed. It’s going to continue radically changing for the next 18 months or two years. But some people will master it and make more money than they even thought was possible. Some won’t, but I’m here to hopefully support as many as possible to do so.
Now I want to go back and talk about the Ninja Turtles again because I talked about this at the beginning of 2023 and it’s one of those things that every week I get DMs about where people are like, “Oh my gosh, you were right.” It’s one of those things I actually did not want to be right about, but I had a gut feeling it would happen.
When I talked about this on the episode, I think it was 270. I talked about this idea of Ninja Turtles and it was when I was also talking about like what is your thing? A lot of times, like in Thrivers, I talk about what is your X factor or your Zone of Excellence, your Zone of Genius. We talk about things like that.
But in its simplest form, what is your thing? What is going to happen? What is already happening is some stylists and salon owners, rather than doing the work to increase their perceived value, to rise to the occasion, to adapt to consumer trends, is they’re going to choose to be bottom dwellers, which is why I’m calling it Ninja Turtles.
I grew up in the early nineties when Ninja Turtles ruled everything and they were these crime-fighting turtles that lived in the sewers and they did really well for themselves.
We are going to see Ninja Turtles come up in our industry. They’ll think they’re doing well for themselves and they’ll burn out in the next five years, but that’s okay. They don’t know that yet. I’m calling them out right here, right now.
When I said find your thing, there’s going to be people who choose to position themselves in the market as a low price leader, and they’ll say things like, “Don’t be scammed by your hair stylist anymore. Come to me and I’ll do your balayage for $120 and include a cut style and it will be better than anything you’ve seen anywhere else.” The service that you charge $400 for, somebody’s going to charge $124 and they’re going to position their entire brand as why would you bother paying $400 when you could pay $120? And to a degree, they’ll win. They’ll build a clientele that way. I have no doubt about it because who wouldn’t like to get a $400 service for 120 bucks? There’s certainly a clientele for that. Those are not your people.
Even as I said that, some of you guys got sparkly eyes and you were like, “Oh my gosh, that is a great idea. I don’t want to have to raise the bar. I just want to have fun and love my clients and do good work and make some money.” Are you really willing to work eight hours a day, 10 hours a day, 12 hours a day, hard on your body, away from your family making 30% of what you should be making? Can you literally stomach that?
Some of you were saying, “Well, it’s better than nothing.” Is it though? Is it truly better to do services at a minimal profit margin when the cost of doing business as a stylist has never been higher so that you emotionally can feel better about yourself because you have clients in your chair?
That’s what these Ninja Turtle stylists are going to do. They’re going to fill their chair and fill their egos at the expense of filling their bank accounts and actually building a sustainable business, but it will feel good to them. It’ll feel good for two to three years and then they’ll turn around and realize they have worked really hard for next to nothing. They’ll be what I call the Sinking Stylist. At which point they’ll have an awakening and they’ll decide they want to raise their perceived value, but in the short term, they’ll go for the easy fix. The easy fix is to be the low-cost leader and they’re going to try to sabotage other stylists in their area that way. The sad thing is they’ll do it.
The reason I bring this up is because I want you to not fall victim to that level of pressure. You’re going to feel the pressure and you’re going to say, “I think I’m overpriced. I’m seeing stylists in my area come up and they’re going to be cheaper.” That is okay. There is always a clientele who wants to pay less. Let them have it.
The key to retaining your clients and continuing to sustain your price point that you’re in is to raise your personal bar, is to choose to look at what is next level guest experience, what is next-level guest communication, what is next level online presence, and choose to live in that. Because if you choose to continue being a cut above, no bottom dweller is going to come for you or steal your clientele or change your livelihood. Do not succumb to that pressure.
Y’all, little insights for this week. I hope this gets your wheels turning. Definitely will talk about this more.
If you have more specific questions, you can leave me a rating or review on iTunes by looking for the Thriving Stylist Podcast. I get most of my episode inspiration from there, so if you want your question answered on the show, leave that rating or review, and I’ll get to you as quickly as I can.
Y’all so much love, happy business building and I’ll see you on the next one.
