With salons across the globe re-opening after unprecedented closures, salon devotees are scrambling to get back in the chair. As an owner, you have planned for the pent up demand with emails and updates to your website announcing how you will be assigning appointments, staff briefings about protocol for appointments and bracing yourself with multiple shifts and additional costs with required PPE and restricted capacity with social distancing in place. But, have you considered the sharp increase in color costs?
Salons in markets that opened first saw an increase of 175% more color on a standard retouch and most of these salons have been absorbing these costs without a strategy to account for the extra product used, cutting into their much needed profits after months of zero or limited revenue.
By setting a threshold of product allowance per service, salons are able to capture the extra product used and charge their guests. Service prices don’t change, clients are only charged based on the color used on their head. Vish has been able to help salons capture these extra product charges and pass them onto their guests.
By charging for extra product used, costs per service remains within your target and salons guarantee a return on every product dispensed, increasing profitability in a time where every gram counts.
Breaking it down
Clients typically come in for regrowth every 6-8 weeks, using the typical amount of product. This is the amount you based your pricing on. But after lockdown, salons were seeing clients after 12 weeks, 16 weeks, and often more. This uses double the amount of product and clients are being charged the same amount.
In an average salon that does 500 services per month, not charging for extra product used can lead salons to absorb $12,000 USD into their bottom line instead of turning that cost into a profit center of $24,000.
Lockdown is an extreme example of what can happen when every single one of your clients goes longer than usual for a retouch, but even under normal circumstances, salons see customers who have gone months without a color, proving that extra product charges are important to capture in every circumstance.
To learn more about different pricing strategies, read our blog post about revolutionizing your pricing structure.
