Posted on June 10 2020
Service Pricing: Where to Start
At Brow Code, we don’t offer exact facts and figures when it comes to setting the price, simply because everyone is different! What you have to offer is likely to be very different to the next person and as a global supplier, we don’t want to pigeon-hole you, or offer advice that might not work for your location, or even your country. However, we do understaff that setting a price can be a stressful and time-consuming task, especially if you are unsure on where to start. We have put together our top tips for formulating a service pricing plan to get you started!
The very first thing you will want to consider is your demographic. Who are your clients? Where do they come from? How do they get to you? Is there a common age, gender or other defining factor about your clientele? This is important to consider and to factor in as you don’t want to set an above average premium price if that is not what your demographic is looking for. Consider the demographic of your location, your regulars and your desired client and work backwards to determine a cost efficient and demographically correct service charge.
The next factor to look into is your personal skill level. If you are a seasoned pro, you can increase your price to reflect your skills. If you are starting out, you are best to set your price in line with your skills while also factoring in the time it may take you to perform a service. Where a highly experienced person may be able to perform a tint and shape in 20 minutes, someone starting out may require 30 or even 40 minutes to perform. That’s ok! Everyone starts somewhere, just ensure you set a proper expectation for your customer and a price to reflect.
The next factor to consider is your years and experience in the industry. Have you been a beauty therapist for decades? Have you worked in the industry for decades but only been hands on for a short time? Your experience in the industry is very reflective of your skills (and also go hand in hand with your skill level). If you are someone like our founder, Melanie, Marris who has been in the industry and hands on for over 15 years, you can set your pricing in the premium range with no worries. If you are not a seasoned professional or have had multiple years, you are best to set your price in a range that is indicative of your relevant knowledge and experience.
One of the most important factors to consider when setting your price is your competition. You don’t want to set your pricing too far above your competition, because people will seek the cheaper option, especially if you are offering an identical service with identical or very similar techniques, experience or skills. Conducting competitor research is very important to understand where you sit on the scale and to also make sure that you aren’t setting yourself up to fail. You also don’t want to undercut your competition just to get a sale, especially if your skills and expertise are worth more than you are advertising yourself for. It is beneficial to acknowledge your surrounding competition and work to land on a price that both acknowledges your worth but also doesn’t scare your customers away and straight to your competitor. Be savvy in how you work with this as placing a very high price tag just because your neighbour has, may not work in your favour, nor will setting your price incredibly, almost suspiciously cheap. Conduct your research and find the sweet spot that welcomes your customers and also acknowledges your skills and expertise.
The final factor we recommend you explore is your current service pricing. What are your current standards rates, and what are these for? If you offer a tint and a wax service, how long does it take and what are you charging your clients for the service provided? If you are looking to add another service, identify the cost of the products and the time it will take you to complete the service. If it is going to take you longer to finish the service, for example adding Henna to your service list will likely take you 45minutes to an hour, you need to accommodate for this extra time in your pricing. On that note, Henna and Lamination products might cost more than your usual tint and wax so you should factor these in as well. Identify your hourly flat rate for your time/skills, identify your costs and then divide them based on the time it’s going to take you to perform the service and the products you will be using.
You might find as you go along that your prices change, and that’s okay. Price inflation, cost of products and even education and experience upgrades will allow you to chop and change your pricing as you go. As long as you ensure that you are consistent, competitive and are covering the costs of operating your business, you are on the right track. There is “no one size fits all” solution but if you take onboard these top tips you will be well on your way to setting a service price that you and your clients are comfortable with.