By Grant Miller
I am frequently amazed how difficult some retailers make it for you to give them your money. The “sales prevention” department is, unfortunately, alive and well all across the country. They unintentionally put up all sorts of roadblocks and obstacles in your way, making it difficult to collect as much money as possible.
Is this happening in your salon? Every salon that I have every consulted with had some sort of rule, policy, procedure or pricing model that was hurting their revenue. They all had something in place that they had been doing for so long that it just became an accepted norm that no one questioned.
The most common mistake I see, that creates the biggest revenue loss, is the way salon owners price their packages or memberships. They offer so many options to choose from, with the noble intent of pleasing everyone, that it makes it difficult for the customer to make a good buying decision.
You see, a confused mind either doesn’t buy or will only buy the safest option, which is usually the least expensive one. I have seen salon pricing sheets that look like a Chinese take out menu. Even I had trouble trying to figure out what they were selling.
The magic number for the average person to choose from is three. We all understand and like good, better, best. Small, medium, large. Dark, darker, darkest. Since most salons typically have more than three levels of tanning, the rule of three cannot always happen. But the main point is for you to offer as few choices as possible and include lots of value in the “best” choices.
Here’s an excellent case and point: I recently helped one of my consulting clients streamline his EFT membership pricing, which has dramatically increased his monthly draft amount. He was having three main problems. A new competitor came to town that offered free tanning with their gym membership so he was losing clients to them. He wasn’t selling as many EFT memberships as he would like, and when he was selling an EFT membership, people were mostly choosing the least expensive option.
Here’s what I noticed about his EFT pricing. He had five levels of equipment, which is typical for the average salon. We changed that to four levels but, more importantly, created much more value in the higher levels to make them more appealing.
We left the level one price the same and increased the pricing of the level two by $5 a month to make the jump to level three more of a no-brainer. The level three EFT now included his level three, four and five equipment for one price. So, we eliminated a couple previous level choices and made the new level the easy “no-brainer” decision. Then, for his highest EFT level, we included all of the UV tanning levels, plus everything else he had to offer. So now for $79.99 a month, the client could UV tan, spray tan, use the Hydromassage, red light therapy, whole body vibration and any other device that was just sitting around collecting dust.
Because of the increased value proposition, his EFT revenue literally increased overnight. His clients started upgrading their memberships to the more expensive, higher-valued levels. New EFT members were also choosing the higher levels. His cancellations slowed down and his EFT drafts are at an all-time high.
Take a hard look at your pricing, figure out how you can offer more value and make it easier for your clients to spend more money with you. Trust me, you’ll be happy you did it!