In my morning newspaper today, a story that precisely illustrates and emphasizes this essay on pricing strategy I blogged about earlier this year. The story is about an Australian chef working at a restaurant in London who’s created a waygu beef burger with a sticker price of more than two thousand dollars. Now, if your immediate reaction is “that’s ridiculous, nobody’s going to pay $2,000 for a burger!” you’d be absolutely right.
And you’d be absolutely missing the point.
The chef, Chris Large, of Honky Tonk restaurant in up-market Chelsea, created the burger – with gold-coated buns, lobster and black truffle brie – with no intention of actually selling it.
In fact, the story quotes him as saying “…although I don’t excpect we’ll be selling many at that price…” The entire purpose of a burger for the price of a small second-hand car is not to sell it. Its ONLY reason for existence is to get free marketing exposure, and make everything else on the menu look cheap by comparison.
On both counts, Mr Large’s creation has over-achieved. In the past few days alone, his gold-plated burger has received massive publicity in print and online, all over the world. As I wrote (below) back in July, ANY salon or spa can – and should – find ways to exploit this strategy. But very few owners bother to even try. Nevertheless, here’s the rest of the essay I wrote earlier. (And from the comments posted below, it clearly struck a chord.)
I’m a well-known thief, and a lazy one at that.
For as long as I can remember, I’ve looked at what’s working in one industry or company, swiped it, and put it to use in another industry or company. It’s productive laziness and larceny though, and I teach it to our Member salons & spas because it saves a whole lot of time compared to the energy, money and intellectual property required to re-invent the wheel.
Here’s a prime example:
Recently I came across a report in Business Insider based on research by the Cornell University of School of Hotel Administration on all the sneaky tricks restaurants use to get you to spend more money. And I instantly thought, ‘well, what if we applied exactly the same thinking to salons & spas?’
So here are some of the key points of this research, and my ‘swipe and implement’ thoughts on how to use the strategies behind it in a salon.
Get rid of dollar signs…they scare people.
1) Clever restaurants don’t use dollar signs! (Next time you dine at an upmarket eatery, check that little gem out.) According to the report, a dollar sign is one of the top things restaurants should avoid including on a menu, because it immediately reminds the customers that they’re spending money. Cornell’s research showed that guests given a menu without dollars signs spent significantly more than those who received a menu with them. Even if prices were written out, eg “Ten dollars” – as though it signified a more upper-class diner – it bit them on the backside because guests still spent less money, triggered by negative feelings associated with paying.
My take: same applies in a salon. Get rid of the dollar signs. Do you really think that putting ’89’ against a service, rather than ‘$89’, is going to confuse your customers?
2) Restaurants are tricky with their numbers: Menu designers recognise that prices that end in 9, such as $9.99, tend to signify value, but not quality. In addition, prices that end in .95 instead of .99 are more effective, because they feel “friendlier” to customers. Most restaurants just leave the price without any cents at all, because it makes their menu cleaner, simpler, and to the point.
My take: simple. Just steal the concept and apply it to your price list.
3) Restaurants use extremely descriptive language. Research from Cornell University revealed that items described in a more beautiful way are more appealing to and popular with customers. According to further research from the University of Illinois at Urbana-Champaign, descriptive menu labels raised sales by 27%, compared to food items without descriptors.
Menu Engineer Greg Rapp (yep, there is such a thing as a ‘menu engineer’) poses an example of Maryland Style Crab Cakes. They are described as “made by hand, with sweet jumbo crab meat, a touch of mayonnaise, our secret blend of seasonings, and golden cracker crumbs for a rich, tender crab cake.” This brings the ultimate sensory experience to the reader, and the descriptive labelling will make customers more likely to be satisfied at the end of the meal.
Interestingly, brand names in menu descriptions also help sales, which is why chain restaurants such as T.G.I. Friday’s use Jack Daniel’s sauce or Minute Maid orange juice on their menus. The more adjectives, the better.
My take: Day spas are often pretty good at using descriptive language. Hair salons and beauty salons, not so much. Try this – take a look at a typical service in your salon, say “Cut n Colour”. Now, 99% of salons do nothing more than list “Cut ‘n Colour” and a price, or price levels based on length of hair. But what actually happens during a cut and colour? The more effort you take to describe in detail the process of performing a cut and colour, the easier it’ll be to sell, at a higher price.
There is magic in the detail.
4. Restaurants use expensive items to draw you to the cheaper items. According to Rapp, restaurants use extremely expensive foods as decoys. “You probably won’t buy it, but you’ll find something a little cheaper and it will look more reasonable,” he says.
According to William Poundstone, author of “Priceless: The Myth of Fair Value (and How to Take Advantage of It),” in a New York Magazine interview, “The main role of that $115 platter — the only three-digit thing on the menu — is to make everything else near it look like a relative bargain.”
My take: this is an absolute steal for any salon or spa. For years I’ve been showing how salons can ‘bundle’ or ‘package’ services and products in such a way that there’s always one ‘hero’ service, one so expensive, so luxurious as to almost ensure that nobody ever buys it.
You don’t actually want them to. It’s purpose as an ‘anchor’ service is to make everything else on the menu, no matter what it costs, look relatively cheap.
5. They offer foods in two portion sizes. This strategy is called bracketing. The customer has no idea how much smaller the small portion is, so they assume it’s the best value price because it costs less. What they don’t realise is that the restaurant wanted to sell the smaller portion at the lower price all along, and simply used the bigger portion with the higher price as comparison.
My take: similar to ‘anchor’ packages. Except you can repeat this all the way through your menu of services. A 90-minute facial for $120, and alongside it, the facial you really want to sell, 60 minutes for $89. Far more profitable.
6. Restaurant engineers analyse your reading patterns. Restaurants consider scanpaths, which are a series of eye fixations that can be studied to see how people read certain things.
According to a Korean research study, a third of participants are likely to order the first item to which their attention is drawn. As a result, restaurants will put the most profitable items in the upper right hand corner, because it is where peoples’ eyes go first.
My take: you can do this research yourself. Show a few clients your standard, garden-variety price list and ask them to pick their preferred service. Then show them your ‘psychologically refined’ price list, with your most profitable service in the top right hand corner, and see what happens.
10. They limit your choices. Through features such as “try-all” samplers, tapas, or fixed menus, restaurants remove the heavy responsibility people feel when choosing what to eat. It is much more effective for restaurants to limit their selection. Apparently, the optimum number of menu items is six items per category in fast-food restaurants, and seven to ten items per category in fine dining establishments.
My take: salon menus are often far, far too complicated. I saw one recently with no fewer than 104 different service items. Give people too many choices, you’ll confuse them. Confused people don’t buy.
11. They set the mood to spend. According to psychology research from the University of Leicester, playing classical music in restaurants encourages diners to spend more, because it makes them feel more affluent. Meanwhile, less sophisticated pop music caused people to spend 10% less on their meals.
My take: for salons and spas, this is easy to test and measure. Play classical music for two weeks, and play pop music for the next two weeks, even if muted. Keep everything else the same, and measure results.
No salon advertising, no matter how well written, is worth spending money on unless it has a great offer.
Take a look through the newspaper. It is astounding how many business owners have spent good money to buy expensive ad space, and filled it with nothing more than a big business card.
Unless you’re letting the reader know exactly what the offer is, most of them will just skip over the ad and the whole point of the advertisement is lost.
An offer is NOT discounting. In fact, discounting is a last resort, and does more damage than good in most cases. Discounting not only takes money out of your pocket, it trains your clients to expect it. If you’ve ever had a phone call from somebody asking when your next special discount is on, you’ll know what I mean.
In direct response marketing, an OFFER is best described as a deal where if they pick up the phone now and make an appointment they’ll get some added thing, or combination of things that they cannot get another time, or they can only get if they’re among the first 12 or 17 or 29 to call.
To give you an idea of the difference between a weak offer and a strong offer, we’ll take an analogy.
Let’s say two men are each selling a horse. One says to the horse buyer, “Here’s my horse, give me the money now and you can take the horse.”
The other one says “Don’t give me any money now. Take Bessie for a week, ride her as you wish, and after a week if you like Bessie, only then give me the money.”
Now, who do you think is going to make the sale?
The second seller hasn’t lost anything by taking the money a week later. Yet, he’ll probably be able to sell more horses at a higher price than the first seller simply because he’s making it seem like his offer is a good deal better than the other.
Typically, a good beauty industry offer would be built on an existing service you want to sell, combined with free add-ons that cost you little or nothing to provide, but which give massive perceived value to the customer.
Perceived value is when the value add-on is of little or no actual cost to you, but increases the value of the services offered to the person reading the ad. Saying “Hurry, $249 worth of beauty treatments for just $99 for the first 14 people to call” may be a little bit of a sleight of hand, but without offers like this, your marketing is dead in the water.
Packaging The Offer
Once you’ve crafted a great offer, you can then start getting a bit more sophisticated. Let’s say that until now all you’ve had is a price list. In my view a price list is a poor way to market your services, since it encourages people to price shop, like walking along the server in a cafeteria. Granted that everyone likes a good deal, but the meaning of the word deal itself means good VALUE. It does not necessarily mean lower prices.
Want to know why? If the only distinguishing factor about your salon is the price, then you become a commodity. Once people start perceiving you as a commodity you become replaceable and/or interchangeable.
Are your customers calling you and asking what the prices of certain services are? Are they complaining about the prices that you charge? If you see a long time regular after a few months and ask her why she hasn’t visited you and get “Oh I couldn’t get an appointment with you, so I went to the place around the corner and kind of just kept going there.”!
If this is happening to you then for sure, you’ve become a commodity to them, meaning that they can get what you give anywhere. It isn’t necessary for them to come to you.
The situation is not irretrievable though and there are a number of things you can do like revising your prices upward, or starting new services, or even prune your customer list.
During these difficult times when the economy is not doing too well, it is easy to fall into the trap of reducing prices. I am, however, fundamentally opposed to mere discounting as a way to increase sales.
The important thing therefore is to ensure that it is not price alone that is your distinguishing factor. In fact some of the best ads ever written didn’t even mention any product, far less its features or price. It appealed to the emotion of the reader.
This is a very important concept in marketing, that people do not make buying decisions based on reason.
According to US marketing guru Dan Kennedy, ‘under normal conditions, only 10% of customers always buy by price, their decisions governed by price, because they have no choice. This group is largely made up of “working poor”, low-wage working people with more mouths to feed than they can afford food for. Nothing wrong with them as people. A lot to admire – except the choices they make that keep them poor.
‘But no good reason to have them – or worse, seek them out as customers. Yet, strangely, most business owners focus 90% of their energy on price even while only 10% of customers decide based on price.
However, there are 20% who make most buying decisions with little weight given to price or cheapest price, and 5% who never consider price….’
So, which customers do you want? It is my contention that you get the customers you deserve.
Most buying decisions are based only on emotion.
If therefore you are appealing to the rational part of the human, you will never get as much response as if you appeal to the emotional part.
Just take a look at some of the ads that are listed here. The very first ad is the one placed by Sir Ernest Shackleton, the great Antarctic adventurer. It’s a very simple ad, does not have any pictures, does not promise anything other than negatives, and basically is one of the worst kind of ads that you can place according to advertising professionals.
Here’s what the ad said
For hazardous journey, small wages,
bitter cold, long months of complete darkness,
constant danger, safe return doubtful,
honour and recognition in case of success.
This ad came out on December 29, 1913 in the London Times and it brought in more than 5,000 applicants including three women.
On the face of it, this ad does not have the power to bring this kind of response, but if you understand what the ad is about, you’ll realize that it is a deliberate, well planned and brilliantly executed dare to every red-blooded male in the whole United Kingdom.
A good contemporary example would be the advertisement for Singapore Airlines. In a time of recession when airlines all over the world are cutting down on price in order to become more competitive, they are one of the few airlines that have not gotten into this race.
Cutting down on price or discounting as we have already discussed is not the right way to market your goods or services. Whatever you do, however much you try to cut your price, there will be someone somewhere who will undercut you.
The only sensible thing to do then, is to appeal to the emotion of the buyer. This is what Singapore Airlines have done brilliantly.
They use the ‘Singapore girl to show you visually, how you will be cosseted and cared for in their airliners. Rationally speaking, would you expect any less in any other airline? But none of the others have caught on to this and are paying for it with loss of business.
Yet by appealing to the emotion of the user, Singapore Airlines is able to maintain its pricing and show growth in profits at a time when many other airlines are looking for bailout plans.
What about the legendary ad for the Rolls Royce. It came out in 1958 and is sometimes referred to as the “Most famous headline in advertising history.” All it says is
“At 60 miles an hour, the loudest sound you can hear in the new Rolls Royce is the ticking of the clock.”
More than half a century has gone by and no other luxury car maker has managed to bring out an ad that even comes close to this.
All these advertisements have one thing in common; they give some sort of emotional benefit rather than a physical one and emotional trumps physical every time.
One way to stop people cafeteria shopping is to package your products and services, and re-brand them so that they cannot be compared apples to apples with your competitors.
For example, you might currently offer a cut and colour at a certain price. But if you value-add by listing all the nominally free services you provide as part of this cut and colour, you come up with a package that has enormous added value. And remember, there is no point doing this unless you are going to list the added extras, with their nominal value, in your marketing message.
You can then simply name this new package, re-brand it if you like, so that it’s called the ‘Scarlett Johanssen Glamour Make-Over’, or whatever. You can actually take the exact same package, give it a couple of tweaks, and call it something different, for example the ‘Meryl Streep Screen Goddess’ package, to appeal to a different demographic.
“How Do I Write Ads That Work?”
Writing ads that work – writing ads that find you actual clients, that’s the skill. And that’s all readily available, all so very easy to learn, tweak, and use whenever you want to turn on your “money” tap. I’ve compiled the Starter Pack, a 2-part manual that shows you exactly how to write an ad that brings in clients like a flood – and, ready-to-use marketing templates with it.
See, this will give you the exact tools, the exact SYSTEM used by thousands of salons and spas across the globe, making them money every single day.
And the best part? It’s all guaranteed.
SO. If you’re ready to start finding more clients, get ahead of your marketing and write ads that really work.
With more than 400 million users – Instagram is today, one of the leading platforms successfully helping business owners establish a name for themselves in the world of social media. Imagine having an audience of 400 million who can see the services and products you are offering? Sounds unbelievable, right? Well the truth is … it’s possible!
With so much of today’s business done online, it’s critical to remain active across all social media platforms (Facebook, Twitter, Pinterest) – and especially, Instagram, as a business owner.
While it’s comparable to Facebook, Instagram is a mobile-photo sharing app which allows users to edit and post photos and videos – now even allowing its users to stream themselves live, similar to Facebook Live.
Creating an Instagram Account is easy and doesn’t take long. While Instagram can be accessed via desktop, Instagram is primarily a mobile app, so you have to download the application on your mobile before signing up. You can download the application from either the Apple App Store or the Google Play Store.
By signing up to Instagram, you’ll let yourself be found by thousands of potential clients.
As a business owner, you will want to create a ‘business profile‘ instead of a personal account. The business account gives business owners, an insight to key information and analytics, which we will later discuss in this article. Before signing up to Instagram you will be asked to link your Facebook business page to your Instagram account. This way both of your accounts will be linked, making it easier to navigate from one platform to the other.
Once your accounts have been linked and your Instagram Account is created, you can now go the Profile Tab, located at the bottom right hand side, to Edit Profile. In this space you can do anything from change your name and username, change your profile photo, add a website users can visit and write a short 150 character biography other users will be able to view once they visit your business account.
TIP: To switch your account from a private or public account go to – Options Settings, located in the Profile Tab; top right-hand corner. To switch and activate a private account tap on the blue button to activate a private account. To make your account public, again – tap on the blue button to switch off the private setting and activate public account.
With Instagram for Business, you’ll be able to see who’s engaged with your profile.
Finding Your Way
Navigating on Instagram is relatively simple. The Home Button allows you to see posts from pages you may be interested in or accounts that you are currently following. The Home Button also allows you to see anything you may have previously posted. To the right of the Home Button is where you will find the Search Bar. The Search Bar allows you to find pages or people you are interested in.
Below the Search Bar you will find a display of photos and videos you can explore to see what other users are posting on Instagram. The Plus Button allows you to add any images or videos, directly from your camera roll or phone camera, you wish to post on your business page.
TIP: Instagram videos have now been extended from 15 seconds to 1 minute in duration. This is a great business tool to share with your followers and potential new customers. Think about how you can utilise video posts for your business? For example: As a salon owner you could upload a short video showing users and potential customers how to get the perfect blow dry, with a simple call to action!
Think about the trust people would have in you when you give them free lessons!
When creating content for any online platform, it is important to think about how you’ll be seen, and how people will remember what you post. Gone were the days where you’d post something and clients will come flocking to you. See it takes an average of 7 – 17 interactions with someone before they’ll buy from you.
And the good thing? If a user likes what you are posting, they will probably follow your page. This is positive news in the world of Instagram! Most people have less than 1,000 followers on Instagram, so they’ll take note of people who like their photos. If you like, and comment on people’s photos, this is a sure-fire way to grow your following.
Always remember the hashtags: adding hashtags to any of your photos or videos – for maximum exposure, before publicly posting them. For example: Images of makeup will usually have the hashtag #Instagrammakeup associated with them. Hashtags allow users to search and filter through different topics of interest via the online platform, making content and business easier to find
Interacting With People
A simple way of interact with other users on Instagram is by liking their photos and commenting on them. To like a photo, either double-tap on the image or tap on the heart-shaped button to like a post.
Commenting on a post is done by clicking on the Comment Button, located on the right hand side of the Like Button. To make your interaction more personal with other users, use the tagging @ symbol available. Start by typing the @ symbol, then type the user’s name you wish to tag in the comment box. After writing your comment simply tap the Post Button and the comment will be posted. By tagging a user, the person will automatically be notified they have been tagged in a comment, making your interaction with them more personal and intimate for future relations.
Insights and Analytics
As a business page on Instagram you are exposed to specific analytical insights and information. These statistics allow you to view the demographics and behavior of your followers, enabling you to create more relevant and timely content for your business page.
For example: Instagram Insights allow you to see what time most users are visiting your page. This information allows you to successfully allocate an appropriate time to post new content to your business page – which will attract more attention and traffic to your page.
All In All – Post Daily
If you’re not posting daily on Instagram, you’re losing potential business. The mass of people using Instagram daily is greater than Facebook, and almost as high as Snapchat. Instagram will surpass Facebook as the #1 go-to platform – in a matter of years.
The question is, what’re you doing about your Instagram?