It’s a question with which the salon industry has long grappled: should we switch to an hourly rate structure rather than charge set fees for specific services? Though just about every salon owner and professional has at one point or another pondered the merits of hourly pricing, most have resisted making the switch, largely because the benefits never quite seem worth the disruption.
As may have noticed, however, the pandemic has changed virtually everything about consumer behavior and the importance of self-care and wellness. Self-care is no longer a nice-to-have, but rather an essential, non-negotiable part of our daily lives. This sea change in the way consumers prioritize self-care – and just as importantly, what they want out of self-care services – has created many trickle-down effects, one of which is that the case for switching to an hourly pricing model is stronger than ever.
First things first
Before we outline some of the many ways you (and your clients!) can potentially benefit from an hourly pricing structure, let’s make one thing clear: stylists are experts in helping people look and feel their best. You are an expert. Period.
And in just about every other industry, experts charge by the hour. Cost is determined not by the service itself but by how long it takes to provide it. Your lawyer bills you for the number of hours they spend working on your case. Your accountant charges you for the number of hours they spend filing your taxes. If someone else’s legal case or tax return is less complex and takes less time than yours, they pay less. Simple as that.
If those comparables are a little far from home, consider the example of a masseuse. If you get a 90-minute massage and your friend gets a 30-minute massage, you’re going to pay more even though you’re both technically getting the same service. Your time is valuable and it’s ok to charge accordingly.
With that established, let’s examine four tangible benefits that come with an hourly pricing model.
Focus on styles, not services
Hourly pricing enables you to focus on styles over services. Our job isn’t to provide haircuts or color treatments – it’s to help people look and feel their best. Anything that restricts our ability to send our clients away looking and feeling their best is ultimately a net negative for both us and them. Hourly pricing allows us to do whatever it takes to create the style our clients want regardless of how many techniques or services are needed to achieve it. Most importantly, it gives us the best chance of sending them home happy and ensuring they come back.
Build better client relationships
In the post-pandemic world, our success or failure as professionals is not defined by our ability to execute a given service but by our ability to build lasting, meaningful clients relationships. We need to be less transactional and more experiential in how we engage with clients. Selling services is transactional. The sooner you can get out of that mode, the better for everyone involved. Hourly pricing, on the other hand, gives you the freedom to make suggestions, experiment in real-time, and partner with your client to achieve their desired look. In our business, that’s how relationships are built.
Create more financial certainty for you (and a better experience for them)
Between inflation, global unrest, and rising interest rates, these are uncertain times for businesses. Now more than ever, we need a modicum of financial certainty as we plan and prepare for the months ahead. Hourly pricing gives that to you. It makes it easier to project future earnings, offset the rising cost of goods and products through incremental price increases, and ensure your margins are where they need to be. It also accounts for and protects you from variance. For example, a partial highlight might take twice as long for one client as it does for another. Or it might take twice as long as you were expecting it to take based on the specific needs of a particular client. If you’re charging a set fee, you’re not making any extra money for all that extra time, while potentially burning out your staff in the process (more on this later).
But perhaps more importantly, the certainty that comes with hourly pricing dramatically reduces the pressure to get clients in and out the door. That, in turn, frees stylists to devote more of their time and mental energy to building relationships and creating enjoyable experiences. Over time, that’ll do far more for your bottom line than squeezing in a few extra appointments each week will ever do.
Cultivate a healthier workplace
Reducing the need to double book our calendars and cycle through as many clients as possible in as short a window as possible comes with another enormous benefit for salons: a happier, healthier work environment for stylists. Many salons owners are wondering aloud what they can do to reduce staff churn. Well, here’s a great place to start. Working under constant pressure to get one client out and the next one in is exhausting. And demoralizing. And ultimately, unsustainable. Hourly pricing turns the pressure dial down significantly.
Communicate proactively for a smooth transition
The deeper you dig, the more clear the case for hourly pricing becomes. Maybe you’re convinced but aren’t sure how or where to begin. As always, start with clear, proactive communication, with both your staff and your clients. Explain to your staff how it will create a healthier workplace for them and enable them to build better relationships. Explain to your clients how they’ll benefit from a better, more enjoyable experience, one focused exclusively on achieving the look and feel they desire. And give everyone time to absorb the changes before actually implementing them. The wait will almost certainly be worth it.
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Originally posted on Modern Salon