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The Perils of Incorrect Pricing — and What to Do About It (Part 2)

by Holly Schippers | April 10, 2019

Note: This is part 2 of a guest post from salon owner Claudia Cordova Papa about the consequences of failing to price services properly. You can read part 1 here:

With all this happening at once [profitability problems along with the need to reclassify my workers], quite frankly, I was scared. I wanted out of that world. However, due to our manicurists being misclassified, I could not sell Aqua. So I had even fewer options: close the salon or figure out a better way. I could no longer reach out to my nail soul sisters; I needed a different type of professional help. Enter the amazing coaches at Strategies salon coaching.

I wish I could tell you everything got better right away. It didn’t. But my tenacity, love for our clients, our industry, and my commitment to doing the right thing pulled me through a seriously challenging time. I began paying our employees and myself a living wage.

I embraced what Strategies taught me and I never looked back! Here is the concept:

Understand what we sell. When we provide professional services we are going to attract clients who are looking for a professional experience. Notice I didn’t say, customers or guests. I said clients because they are the ones who are willing to see, treat, and pay us as professionals. The key is understanding what is important to our clients and meeting those needs. This starts from the time you pick up the phone to how you follow up with them after their time with you. This also includes all the additional training, supplies, and hospitality treats that are needed to create that special WOW only you can provide. All this will take time. So, time becomes the new commodity that we sell. Yes, you read that right. We sell time. Not manicures, nail art, or pedicures — time. We also have an additional sales opportunity and that is home care products or other boutique items. That is all we have to sell.

Once we understand that we sell time, embracing and loving time management becomes incredibly important. Understanding the importance of time is critical to succeeding and thriving in this business. Our client is paying us for a set amount of time devoted entirely to them. Once we understand that, the math used to determine pricing is easy. So, when a client asks for additional services you can give her a price quickly, confident you will not be losing money.

Once we understand that we sell time, embracing and loving time management becomes incredibly important.

It truly is easy math. Let me show you. Once you set an hourly rate, divide your hour by four or six depending on what increments you use to schedule your time (meaning chunks of 10 or 15 minutes). Then look at the amount of time a service requires (how many increments of time you book) and multiply by your rate per increment.

For example, at Aqua our hour is sold at $74 an hour and we book in 15-minute increments. Each 15-minute increment is $18.50.

Our Aqua signature pedicure takes 45 minutes or three 15-minute increments. $18.50 x 3 = $55.50.

Our Aqua signature manicure takes 30 minutes (or two 15-minute increments). $18.50 x 2 = $37.

The concept of selling time can result in either losing money or making money. If a client requests a nail art design that would take 30 minutes to complete, I know that it would cost them $37. Basic and understandable, right? However, I could sell nail art for $5 if a manicurist was able to efficiently add nail art to a 45-minute ($55.50 or $18.50 x three 15 minute increments) manicure service. The new total is $60.50 (a win for us and an affordable add-on for the client). However, if the add-on takes an hour and the client is only charged $60.50, I’ve lost $13.50.

Understanding how to price services, staying curious about the client’s needs, and educating clients on the experiences that will meet their needs results in amazing client retention. Since you know that your pricing is accurate and you can cover costs and make a profit, the fear surrounding your price is gone, so now you can solely focus on meeting your client’s needs.

Claudia Cordova Papa

Claudia Cordova Papa

Join Holly and me as we take a deeper dive at understanding what you sell, time management, and how to calculate prices. I hope to have a chance to meet you soon and chat about time and thriving.

— Claudia Cordova Papa @aquaskinnail

 What do you think of this concept: looking at your time being the sales point instead of trying to compare services when what you do is not the same as what other salons in town do? Would you like to hear more about it? How about seeing Claudia as a guest on NailOn with Holly and Mel so you can ask her questions directly? I look forward to hearing from you in the comments below! — Holly

 

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