Salon Marketing – do you make these mistakes when you price your salon services?
by Greg Milner on Tuesday, February 14th, 2012 at 8:50 am
In my daily newspaper this morning, a story that shows just how little even experienced business people know about pricing, value propositions and marketing. If you own a salon or spa and want to charge premium prices for your salon body treatments or hair styling, this story is a classic example of how not to do it – and a lesson in how you CAN do it.
A reader had written a glowing letter of praise for the magnificent quality of food and service at one of my city’s top restaurants. “Very stylish, with interesting, tasty and creative food.” he wrote. “The service was almost faultless too, thank you.” And then came the “….but.”
“A smallish plate of (beautifully cooked) pieces of suckling pig and a little bowl of sauerkraut was…$55. Oh, COME ON…! Is this just cynicism? Do you just think people will pay this because they don’t want to be thought of as uncool by complaining…?”
The diner’s complaint was justified, because the restaurant had failed to justify its high price by providing value. And yet, that value was easily explained, had the restaurant’s management bothered to find out how to do so.
In fact, they had the answer at their fingertips. Yet they blew it. Sarcastically, they wrote to the customer thus:
“As far as going into detail and explaining our prices for you we won’t bother. We’re sure you don’t email big companies such as Calvin Klein or Armani and ask them to explain themselves for the expensive prices for a pair of jeans or a white T shirt.
“We serve good quality food that has had a lot of love and hard work go into it.”
Huh? As if other restaurants charging half the price serve lousy food thrown together by trained monkeys? Dumb. Yet they had the right answer at their fingertips. In the very same article, the restaurant’s part-owner and high-profile chef David Coomer detailed exactly the right justification for charging top dollar – yet, ignorantly, this brilliant sales information is presumably kept a secret from the company’s customers.
Each pig costs us about $180 to buy. It is air-freighted clear across the country from Victoria, and collected at Perth Airport by restaurant staff. By the time preparation, garnish and labour costs are added, it doesn’t leave much of a margin.
“If you were a rational restaurateur, you wouldn’t bother,” said Mr Coomer. “But we want to be perceived as people who are dedicated craftsmen serving very good quality food.”
Er, how on earth are they going to be perceived as dedicated craftsmen, if they don’t tell the story, shout it from every available rooftop. If I were Mr Coomer, I’d be instantly re-printing the menus, complete with the story of each and every dish. E.g.,
“For our suckling pig, we personally select only the best available animal from a specially-certified farm, approved by our part-owner and master-chef David Coomer, (name of farm?) in the cool highlands of sub-alpine Victoria. Each pig costs approximately $180. Most restaurant food supplies are trucked across the Nullarbor Plain to Perth, a distance of 2,500 miles, however we believe in only delivering the very best and freshest food to our diners, so instead of trucks, our animals are air freighted at a cost of $70 each. At Perth Airport, our restaurant staff personally meet each arriving aircraft to inspect the purchase and ensure it has arrived in perfect condition….”
Etc etc. You should by now be getting the picture. There is Magic in the Details.
Too often – and this applies to salon & spa marketing as much as the marketing of any other business – the owner assumes that the customer has no interest in the process, only the end result. Nothing could be further from the truth. Hark unto me; there is case study after case study of smart entrepreneurs turning the actual process into a ‘business within the business’, not only generating another revenue stream, but using the process as means of not merely justifying the high prices of its products, but making the customer feel intensely excited about paying those high prices.
Case in point: premium European car manufacturers such as Mercedes and Porsche have erected massive museums in the grounds of their plants, tied to tours of the factory where customers can watch their car being built.
Schlitz beer - telling the story, revealing the DETAILS, turned Schlitz into the world's biggest
Famous US brewer Schlitz was the biggest in the world for decades, thanks at least in part to advertising which – unlike other companies – extolled the process by which their beer was made. (See example on this page.)
There is much to be learned and even more to be implemented in your salon or spa business from this. Do you simply present your customers with the end product and assume they know how you arrived at that product? Is your method of pricing little more scientific than the ‘Flinch Test‘?
(Explanation: the Flinch Test is one of three common pricing methods used by all businesses. Method #1: Look around at what everybody else is charging, and take an average. Method #2: figure out what a product or service costs you, and simply add a margin. Method #3: stick any old price tag on the thing, and if the customers don’t flinch, keep pushing it up until they do.)
The restaurant had a magnificent story to tell, yet failed to do so, and its only defence against price criticism was arrogance. That’s not stupidity, it’s ignorance. There’s a difference. Stupidity is not being ignorant, it’s being ignorant and refusing to educate yourself despite an abundance of information at your fingertips.
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A post by Greg Milner The odd idea, a bit of prodding, a nudge here and there, a little fun, and the occasional dose of brutal reality. Greg is co-founder and CEO of Worldwide Salon Marketing, a writer, direct response marketing consultant, specialist marketing systems adviser and coach. |
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Sarkis Akle
Feb 15th, 2012
Great article Greg!
Jill Groves
Feb 15th, 2012
Hi Greg, yet again a brilliant article! and so true. Jill
Sandra
Feb 16th, 2012
Greg,
I recently did a split test on 10,000 flyers (5K + 5K)
Same hair service on both based on one of your templates;
5,000 Flyers showed $75 of services for $30 – with a testimonial and guarantee.
5,000 Flyers showed $75 of services for $37 – this flyer had more details with a list of 20 reasons to use our salon and also showed the same testimonial and guarantee.
Sold 19 at $30 – 4 rebooked
Sold 2 at $37 – none rebooked
Poor re-book ratio I agree, but that’s the nature of the beast these days. The next bargain is only a mouse click away.
I’ve seen a lot of your stuff and while you call discounting “evil” most of your marketing pieces involve cutting the price of a package of services (you call is adding value) or ‘open’ discounting (businss of the week / lucky car park voucher etc.)
You’ve grown up with all the classic direct marketing books and advice – “the more you tell the more you sell”. Schlitz beer was pre-tv, pre-internet, pre – facebook, twitter et al. Peoples attention span aint what it used to be – and there’s no way you’ll ever be taken seriously by suggesting it is.
Their thirst for information may still be the same, but they can get it at the touch of a smartscreen these days, and from a billion different sources. And they can compare prices at the speed of light. A new generation of price-savvy consumer is growing up rapidly.
Loyalty is dwindelling. I just had a client, mid-fifties, been coming to us for years, every 4 weeks, cancel her next appointment becasue she got a daily deal on the internet.
She said not to worry she’ll be coming back to us – but the deal was too good to turn down. She gets a free birthday service from us (and a card), a gift at Christmas, a monthly newsletter (6 months printed, 6 months email), and free travel size shampoo and conditioner for the summer.
For evey one of her who admit it, how many more are doing it?
I understand that you have to sell salon owners some hope or else your business goes down the pan as well. But lets get real, the days of getting clients in with one good offer and then keeping them coming back at full price are fading fast.
Wouldn’t you agree?
Greg Milner
Feb 20th, 2012
Sandra, I agree that attention spans are dwindling. However…they are only dwindling for those who put less and less effort into attracting that attention.
Reality shows on TV are more and more popular, getting more and more attention. How can that be, if attention spans are dwindling per se?
It’s because the makers of reality shows have worked hard to find the ‘hot buttons’ that attract and keep attention. And that comes down to telling a ‘story’ that resonates with the target audience.
Remember, reality shows are watched by the same demographic obsessed with FaceTwitter et al.
Your assertion that most of the marketing we produce and distribute for salons involves price cutting betrays a fundamental misunderstanding of the difference between straight, plain as day discounting, and value adding.
I have written at length and in great detail about this many times before, on this very website, and won’t repeat that here, except to refer you to this article http://www.worldwidesalonmarketing.com/salon-marketing-questions-answers
If that doesn’t make it clearer, nothing will.
You made 21 sales from the marketing fliers you say were based on WSM-style direct response marketing. So the marketing worked. You only re-booked 4 of them. To blame the ‘nature of the beast’ is delusional. It’s much easier to blame the customer than to make a forensic examination of your own internal client retention practices.
Most businesses are so screwed up, so well-tuned in the Sales Prevention Department, no amount of effective external marketing is going to make up for it.
There is MUCH more to effective marketing than merely crafting a good offer and thinking you’ve done your job. Your mid-fifties client might not have succumbed to a daily deal offer had the ‘story’ of your business been a more interesting one, had been sufficiently compelling to reduce the issue of price to a mere also-ran.
Business owners too often forget to tell the ‘story’ – in my experience, and particularly in the hair & beauty industry, they rely almost exclusively on differentiating themselves by price, or product, or qualifications, or any number of bullet points plucked from a ‘shopping list’ of features, all of which can be quickly copied by just about any competitor.
But your story, if sufficiently well-developed, nurtured and continuously refined, is yours alone. That’s where most businesses fall down.
One more thing Sandra: as far as our records show, you’ve never been a member of WSM, so it’s curious as to how you came to be in possession of any of the material we’ve generated for our Member salons over years.
Robyn Curnow
Feb 21st, 2012
Wow! Greg you told her!
I love the article, and Im going to rewrite my add I just did today to make sure it has the right story in it. And my team are trained up in re booking those clients.
Thanks for the shake up.
Marnie
Feb 27th, 2012
People cant expect to do just ONE thing – or 2 similar – and expect it to work and solve all your problems at once!!
What is your phone answering like…your systems and back end..what was it you did to make the client go WOW! |Clients need more WOW right now..they feel neglected so that’s why they are so tempted by PRICE alone int he deals sites…those that criticize are those that haven’t given it their best shot, merely a half effort afterthought.
IT works when followed through with precise systems and thought and care.