By Grant Miller
There’s a lot happening all around you that will affect how successful your business will be for the next several years. It’s already no secret that the number of tanning salons nationwide has dropped over the decade. Thankfully, that number has leveled off.
Most salon owners still have to deal with low-price competitors. Whether it’s the gym down the street that gives away tanning as an incentive to join or just another salon owner who decides to compete on price alone.
Lowering your price is almost always a very bad decision. Some salon owners feel that if their price is lower, they’ll make it up on increased volume. This rarely happens. The other big downside is that competing just on price leads to a race to the bottom where nobody wins.
Few consumers will ever base their decision solely on price alone. Of course, some will, especially if you don’t give them reasons why it is in their best interest to pay more.
My somewhat radical idea for you is to raise your prices this year, and here’s why.
There are several factors that will make it a necessity for you to increase your revenue. The stock market has been surging the past year with seemingly no end in sight. Manufacturing is picking u,p and retail had a very good holiday season. Big and small companies are handing their employees bonuses, and most everyone is getting more money in their paychecks.
With more people employed, and with more money in their pockets to spend, you want your salon to be their business of choice. It’s probably time to update your interior, exterior, and even your equipment. You’ll probably also want to bring in new products and services to satisfy the needs of your clients.
The larger tanning chains, which have been quietly growing the past several years, have bright modern stores with newer equipment. If you compete with them and
your beds are 20 years old and you still have a bamboo counter with plastic lobby chairs, it’s time to update.
It is already getting tougher to find good staff, and I predict that task will become even more difficult as the number of available workers gets smaller. You will have to pay more to find and keep good staff. The money for higher wages, newer equipment and salon upgrades has to come from somewhere. Raising your prices is the only logical solution.
More importantly than just raising your prices, I would suggest that you create more value as well for your clients. Tweak your EFT levels so that you are offering better equipment and/or additional spa services in the higher levels. If you don’t already have a high-priced all-inclusive EFT membership that gives them literally everything you offer, do it now.
I recently worked with a salon owner and literally threw all her pricing out the window. I recreated her EFT memberships to make it the best option to buy and restructured all the other pricing as well. She’s had massive success like others that have taken my recommendations.
As business owners, we sometime tend to under value what we offer. Our equipment, maintenance and overhead is expensive, and you need to realize that.
Provide an excellent environment, good equipment, and great service. Then charge a fair price to keep your members for a long time.