Salon & Spa Marketing – Pricing & Lessons from Picasso

by Greg Milner | May 12, 2013 | Blog

Groundhog Day – waking up to the same/same every day

Yesterday was Groundhog Day for me, right down to looking in the mirror and, if I squinted, Bill Murray was looking back at me.

The catalyst for this hallucination was (yet another) conversation with a salon owner terrified of putting her prices up. As she talked, I could feel the anxiety oozing down the phone.

“I can’t put my prices up,” she wailed. “I only put them up six months ago, my customers would leave in droves if I did it again…”

Well, what did they do the last time you put your prices up…did they leave in droves then?

“Well, no…but I just think I’d be too expensive…”

Oh dear.

Entire theses have been written about pricing, there are squadrons of professors who do nothing else but talk about it, analyze it, agonize over it.

But I’ll keep this simple, and put it in terms that any salon owner can understand. This is not about academic study, it’s about what works. So roll up your sleeves, and start thinking. Because buying product at wholesale, adding a margin, and using that as your only guide to pricing ain’t no salon marketing plan.

Stay with me here.

First, there is more misunderstanding, dis-information and plain hogwash written and taught about pricing than almost any other subject under the broad umbrella of ‘business’.

Perhaps the biggest misunderstanding is the difference between value, price and cost – that is, the vast gulf between the value a customer or prospect perceives, the actual price charged, and the real cost to the business owner to deliver that product or service.

And part of the problem for many salon owners is, frankly, the low esteem in which they hold themselves, their ability, professionalism and standing.

It’s why most salon owners reading this would fail the ‘Picasso Test’.

Pablo Picasso

Picasso was sitting at a café in Paris, idly sketching. A woman walked by, recognized him and stopped to ask if he would be so kind as to sketch her, and charge whatever he thought was appropriate.

Picasso obliged, and three minutes later, there it was – an original Picasso.

“That will be 5,000 francs,” Picasso said.

“But it only took you three minutes!” she exclaimed in shock.

“No,” he said calmly, “it took me all my life.”

Of course, had Picasso simply charged for his time on that particular task, he would have had a difficult job justifying the price.

You see, the big mistake most business owners make when figuring out how to price a product or service, is doing it based on what it actually costs them. E.g., they’ll say to themselves, ‘this widget cost me $X to make/buy in/provide, so I’ll ad an 80% markup’.

It is a blinkered, nay, blindfolded way to price anything, because it completely ignores

a)     The value that product or service might have in the eyes of the customer (perceived value)

b)     How it’s price might be lifted considerably by adding more perceived value with low or no-cost items/treatments/services (eg free samples you got from a supplier)

c)      Any other value you can add to it through the messages/stories/testimonials/personal qualifications in all your advertising and promotional messages/flyers/letters…

Price and value are entirely different things, and value is in the eye of the beholder. It has nothing to do with price.

To me, spending $3,000 to live on a boat for a week with friends, miles out to sea – no shops, bars, restaurants, movies – it’s great value. But there are thousands who wouldn’t do that if they were paid to do it.

To my wife, a week in Bali for $1,000 including air fares is great value. Me? I’d rather gouge my own eyes out with a sharp spoon than spend a thousand bucks to meander endlessly around market stalls shopping for cheap sarongs.

All of which brings me to another point about price and value.

The more narrowly you identify your target market, the more precisely you craft your message to match exactly the wants of that target market, the less and less important the issue of price becomes.

Golfers will pay anything to get that perfect swing.

Anglers will move heaven and earth – or pay someone to do it for them – to catch that prize fish.

For example, say you sell cellulite treatments. Which do you think is going to create more value, a headline which says

“Anti-Cellulite Treatments from $495”

Or a headline that says

“For Young Mothers who are Embarrassed About Their Unsightly Cellulite – At LAST, The Zero-Pain, Breakthrough New Treatment That Melts Cellulite and Gives You Back Those Smooth Youthful Thighs! WARNING: Men might look at you – and wish.”

In fact, the second headline is deliberately designed to create desire, offer a painless solution to an identifiable problem, and specifically include (young mothers) only those prospects wanted, while deliberately excluding unwanted prospects.

Furthermore, it doesn’t even talk about price, which would only be addressed in terms of value in the body of the piece, backed up of course by all of the components of a good emotional direct response ad – a strong guarantee, scarcity, before and after photos, testimonials etc.

(All of the elements you’ll find in the templates in the Essential Salon Owner’s Marketing Toolkit™)

The last point I want to make about price is this: the purpose of re-inventing what you sell, of creating packages, is to blur the lines of distinction between your business and that of your rival salons, to create for yourself a distinct difference, so that prospects and customers simply cannot compare you with the opposition on price alone.

The better you get at this, the more you tip the playing field in your favour. Business is NOT about playing on a level field. It’s about giving yourself an unfair advantage. Unfair to your competitors, that is.

And reducing the issue of price to the point where it’s a non-issue.