Your time is only worth what someone is willing to pay for it.
It's that simple.
Quite frankly, I think my own time is worth, oh, say, $3,000 an hour plus all the latte I can drink. But if I hold out for that price, I'm not going to be able to buy my own latte while I sit and do my own nails.
Which is why I get so perplexed, and even a little impatient, with all this "business education" that gets thrown at us in this biz from people who keep telling us not to lower our prices.
It's a marketing philosophy that has been crammed down our throats for at least as long as I've been doing nails. It comes to us in the form of magazine articles and seminars, and gets debated often on the networking forums.
Essentially, the "experts" insist that we should not discount our services or lower our prices for any reason; that it is better business to offer a "gift with purchase" or give away small tokens of our appreciation in the form of products and such. Somehow these little material gifts are supposed to build value in the minds of our consumers.
Problem is, from the other perspective and decades of real-world salon practice, when you are new to the business it helps to price your services at an introductory rate. Charge less, entice more victims. Consumers are willing to exert some patience to sit through three-hour full sets and love their slightly crooked and possibly still not quite smooth nails if they paid $25 for them instead of the $65 that your coworker charges for the nails that took her 15 years of experience and continuing education to perfect. But if you jump in right away with less than well-honed skills and charge the same prices as someone who has already mastered the learning curve, consumers can tell the difference. This is why, for decades, new manicurists have offered their fledgling services at a discounted rate.
It works. It gets people in your chair and gives you an opportunity to practice and perfect your craft so that you can build a clientele and raise your prices accordingly.
Same with referral incentives. If you are actively seeking referral business from your existing clientele, it's because you have time to sell. It means you have empty space in your schedule that you are hoping to fill. Your existing clients know this. They understand that you would not be asking them to give away your cards for you if you did not have openings.
They don't want to be paid with a bottle of lotion.
That is why, since time began, techs have seen first-hand that the best incentive to get your clients to work for you is to PAY THEM with MONEY. That is why we offer referral discounts. Not only do I offer $5 off the referring client’s next service, but many years ago I realized that my clients were out there busting their butts for me! They would take fistfuls of cards and come back after two weeks asking for more, and wanting to know if anyone had called. That's when I decided to also offer an incentive to the people who were being referred. So I had a rubber stamp made up that says, "First-time customers receive $5 off with this card," and I stamped the back of my cards.
Suddenly I started getting calls from people who had received those cards and my regular clients started reaping the rewards. It was a win-win-win situation. I filled my empty time slots, and everyone felt they were getting something of value.
When I get really busy I stop stamping the back of the cards. I'm always grateful for referral business, but I can't always fit it in. That's when my time becomes more valuable — it no longer behooves me to offer to sell my time at a discounted rate if I can sell it at full value (which remains dismally lower than $3,000 an hour).
I don't care what the business experts keep saying. Maybe they are teaching business classes now because they couldn't stay booked using their own advice. Maybe they are teaching business classes now because they were booked using their own advice, but not if they charged more than what they make off us paying them to tell us how to stay booked. Maybe they never worked in a salon at all — maybe they learned everything they know about business strategy from college classes or running a car dealership. I don't know what makes people leave one profession to go tell others how to be successful at it, but if there's more money in telling others how to run their business than there is in running a business, then maybe I'm in the wrong business?
I've witnessed a lot of debate on this subject and thrown more than my own two cents into the pot and I've come to this conclusion: I'm going to take my business advice from the people who are working in the same business. When I see one person stand up and insist that discounting my time is belittling myself, I'm going to take that with a BIG grain of sand and hold it up against who gave that advice and whether or not that person spends the bulk of his/her days sitting behind a nail desk actually doing nails. And when 20 other people stand up in that same conversation and report that they have found that discounting their time works and they all spend the bulk of their days sitting behind nail desks actually doing nails, I'm going to support the democratic process here. Majority rules.