How low is too low?!

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diesel1978

Well-Known Member
Joined
Aug 15, 2003
Messages
777
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Location
North Yorkshire
Hi All ,
It's been a while but I really really would value peoples opinions on this one.
I realise we are in a recession and times are hard for everyone but at what point do you stop giving discount and how low is too low?

I'm not against giving discount but since a new salon has come along my self and a towns worth of other salons are lets say shocked at the discounts they are giving. In a world of groupons, wowchers and wahanda's there is always going to be competition but when competition is offering such ridiculous prices ....well how long can you ride it out for?

The offers I am talking about are ridiculous......pennies for Shellac, Minx, Lash Extensions...the list is endless..........I feel like the industry I have strived so hard to achieve in is being devalued and destroyed ...........................your thoughts appreciated xx
 
They'll always be people out there doing it cheaper than you. If they're using the real products they won't be making any money and can't sustain that for long. If they're making a profit they can't be using the real product so somewhere along the line clients are going to have problems.

You know your true worth. If you need to compete to keep paying the bills then maybe do it with adds on such a free hand massage rather than discounting your service to silly rates.

Hope things get better x
 
Luckily for me it's not affecting me directly as I have a client base of over 13 years. Because I teach too I deal directly with other salons on both a professional level and personal and it is those whom I truly feel for.
When you choose a high end product you expect it to be just that...high end. Such a shame that clients can get a £25 treatment for £7.50.....
Trying to keep morale high for these salons that are competing xx
 
It baffles me all this, it really does:(. Why oh why do salons think they can get a decent clientelle who will be willing to carry on spending money when the offer is over by charging such rediculously low prices for a top end product, service. Very, very few of these type of clients are loyal. They are always chasing the cheaper deal. We are all out to make money, but selling yourself this low is ....well again, words fail me.
 
I did exactly what they are doing when I opened my second salon. I was competing for business against 5 other salons on the same street.

Within 18 months, 4 of those salons had either closed down or sold up. I then established my true price range and never looked back.

It's business. Nothing personal. I bankrolled the use of Redken products on all clients for "Goldwell prices". Things got so tense at one point that we had the owner of the salon across the road tallying up the amount of clients coming into and out of my salon (we saw him in the window of the flat above his salon with his clipboard counting them in and counting them out).

I also refused to interview any staff who had come from those salons once they closed down, as the way I saw it, they couldn't have been that good if a bit of discount was enough to get their clients leaving them and trying us.

In answer to the question, the discounted treatments can continue as long as the owner of the salon has the funds to bankroll them. A serious owner with serious savings and a good business plan will have at least £100K to do this.

I know how I would have fought against myself in that situation (if I were one of the other salons) but I'd obviously be stupid to reveal that here. It wouldn't be by discounts though, it would be by adding value to my services and marking out a clear difference between my existing salon and the new one.
 
I did exactly what they are doing when I opened my second salon. I was competing for business against 5 other salons on the same street.

Within 18 months, 4 of those salons had either closed down or sold up. I then established my true price range and never looked back.

It's business. Nothing personal. I bankrolled the use of Redken products on all clients for "Goldwell prices". Things got so tense at one point that we had the owner of the salon across the road tallying up the amount of clients coming into and out of my salon (we saw him in the window of the flat above his salon with his clipboard counting them in and counting them out).

I also refused to interview any staff who had come from those salons once they closed down, as the way I saw it, they couldn't have been that good if a bit of discount was enough to get their clients leaving them and trying us.

In answer to the question, the discounted treatments can continue as long as the owner of the salon has the funds to bankroll them. A serious owner with serious savings and a good business plan will have at least £100K to do this.

I know how I would have fought against myself in that situation (if I were one of the other salons) but I'd obviously be stupid to reveal that here. It wouldn't be by discounts though, it would be by adding value to my services and marking out a clear difference between my existing salon and the new one.

I can see your point on this but its morally wrong! Everyone has to make a living in this world and you should have built your client bank on the quality of your work not ruining other peoples livelyhoods in this way! It wont be long before you have competition again and then you will have to hope that your bargain hunting clients are going to carry on paying your bills!!
 
We use aggressive discounts selectively against competition. It's a tactic, and as long as its costed correctly it works. I do one hair and one Beauty discount per season. We identify where we want to hit and go for it.
At the moment we are trying to gain market share in two particular treatments, so have cut the price of them, introduced a new concept around them and advertised like crazy.
Just make sure that discounts are targeted and costed out properly.
 
I can see your point on this but its morally wrong! Everyone has to make a living in this world and you should have built your client bank on the quality of your work not ruining other peoples livelyhoods in this way! It wont be long before you have competition again and then you will have to hope that your bargain hunting clients are going to carry on paying your bills!!

Is it morally right to have to lay off your staff because you don't have enough work for them?
All classix and I are doing is safeguarding our staffs jobs for them.
If there are fewer people buying hair services then you have to ensure they are using our staff as opposed to someone else's. Its business I'm afraid.

Would it be more "right" for me to go bust rather than work to ensure that I don't? Cos right now there is not enough work for all the salons, mobiles et al.
 
I have always believed that you get what you pay for, and you get what you deserve.

If you go with an agressive discount policy to poach clients, they are the type of clients that you deserve, clients that are not loyal, do not value the service they given (assuming they were originally happy with the service at the place they are deserting) and will leave you as easily as you lured them in.

They are also the type of clients that will cancel at the last minute, no shows, expect freebies.

We are in a recession and most people have less disposable income but by the cost of supplying your services has not gone down, up if anything! So by reducing your prices are you admitting that you were overpriced before?

It is so hard at the moment, in all lines of business and when it comes to sink or swim you have to do what is necessary.

If it helps, over Christmas I heard on the radio a local nail salon doing a groupon deal, it has cost them regular clients.
 
I can see your point on this but its morally wrong! Everyone has to make a living in this world and you should have built your client bank on the quality of your work not ruining other peoples livelyhoods in this way! It wont be long before you have competition again and then you will have to hope that your bargain hunting clients are going to carry on paying your bills!!

There is no room for "morally wrong" in business. What I did was a classic business move taught at many universities as part of a business/marketing degree. Business is like a game of chess and you need to think 5 moves ahead at all times, otherwise your competitors will gobble you up and leave you in 'checkmate'. They won't be thinking about 'your morals' or 'theirs' when they watch you close down ... more like "how much do you want for that furniture you no longer need?" as they expand.

It's the way of the world I'm afraid (unless you live in North Korea).

My staff depend on me to pay their mortgages and they come higher up my list of priorities than the new salon owner down the road fresh out of college and wet behind the ears.

I'm a nice person and I like to help people - heck, I even employed my old boss as a stylist despite us falling out when I left her salon, but making a living from doing treatments and owning a business that sells treatments are 2 different things. We can't all just go forward at the rate of the slowest/least experienced person in town - if they find that running a business isn't for them, they can always find a job with someone who is better at that side of things while they concentrate on doing good nails/hair etc.

The last 10 years was like a dream. Anyone could set up shop and more or less make it due to cheap credit and plentiful spending. We're getting back to normality now. Anyone not savvy in business or unwilling to take the time to learn what running a business is really about will soon be going to the wall. I'm kind of relived about that more than sad to be honest. Sorry, but it's just how I feel.

We use aggressive discounts selectively against competition. It's a tactic, and as long as its costed correctly it works. I do one hair and one Beauty discount per season. We identify where we want to hit and go for it.
At the moment we are trying to gain market share in two particular treatments, so have cut the price of them, introduced a new concept around them and advertised like crazy.
Just make sure that discounts are targeted and costed out properly.

Agreed. I think I mentioned this somewhere before, but when people do a Groupon for a Cut and Blow with Morrocan Oil treatment for £10 that usually highlights to me that the salon won't be there much longer.

I tend to worry though if I have competition like Persianista - when a salon targets their discounts to gain market share in such a manner it can end up with me and them locked in a permanent waltz of courting customers and searching for the market position that the other isn't yet fulfilling. I usually end up on first name terms with these types of local salon owners and we become acquaintances over time. Sort of like a mutual respect for eachother. LOL

Is it morally right to have to lay off your staff because you don't have enough work for them?
All classix and I are doing is safeguarding our staffs jobs for them.
If there are fewer people buying hair services then you have to ensure they are using our staff as opposed to someone else's. Its business I'm afraid.

Would it be more "right" for me to go bust rather than work to ensure that I don't? Cos right now there is not enough work for all the salons, mobiles et al.

Beautifully put. You're thinking so much more clearly than I am today. Can't really add to that. xx
 
I have always believed that you get what you pay for, and you get what you deserve.

If you go with an agressive discount policy to poach clients, they are the type of clients that you deserve, clients that are not loyal, do not value the service they given (assuming they were originally happy with the service at the place they are deserting) and will leave you as easily as you lured them in.

They are also the type of clients that will cancel at the last minute, no shows, expect freebies.

We are in a recession and most people have less disposable income but by the cost of supplying your services has not gone down, up if anything! So by reducing your prices are you admitting that you were overpriced before?

It is so hard at the moment, in all lines of business and when it comes to sink or swim you have to do what is necessary.

If it helps, over Christmas I heard on the radio a local nail salon doing a groupon deal, it has cost them regular clients.

I'd agree with you Sammi if you're discounting across the board, but not with targeted discounting to introduce new services/products to your clients.

Think about it in a different sector ... let's say Warburtons produce a new loaf that is offering X, Y and Z health benefits, but retails at £1.60. They might introduce the line at 1/2 price introductory offer to allow you the chance to try it. When it goes back up in price, will you immediately run back to "Tesco Value White Bread" for 35p?

Targeted offers don't always attract 'coupon clippers' unless you go through a site like Groupon.

I can think of one very big "discounting" mistake I spotted last night when I was picking up a takeaway as an example. I noticed that the menu in my favourite takeaway had changed and when I looked at it (let me go grab it...one sec), it says "Exclusive Discount 10% off on all orders at all times at feedmeonline.co.uk".

Now obviously, a rep for this website has called the owner of my favourite takeaway and probably said something like this: "We can bring you loads of new customers on our website. People will order online and we'll send you their order. It will cost £xx to get you registered on our site, but to make you stand out from the other takeaways in your area, you really should offer a discount or something. And for each customer order we send, we'll charge you 50p for the new business".

That's how I imagine it went. And he fell for it.

So now, he is telling all of his existing customers that they can knock 10% off the price of their meal by registering with this website (which is like a food version of Groupon I guess) and ordering through them. He hasn't realised that rather than getting new business, he is simply pointing his existing customers to a place where at best they will pay him 10% less than they used to (plus the website fee comes off the price of the meal too) and at worst, they might spot another takeaway on there with a better offer and decide to try them out instead - something they would not have done if he didn't direct us to the website in the first place. How stupid is that?

In our industry, it's akin to doing a Groupon on a set of acrylics or a wash,cut and blow and then telling all your clients about it.

Now what if, when I walked in last night, he had added a new "super burger" to the menu that was totally different to anything on offer either in his store or anywhere else locally? Say he priced it £7? Now that's a lot of money for a burger, but what if he told me I could try it for £4 including free chips as a taster? I would probably have bought it. And if it was delicious enough, I would treat myself to that £7 burger now and again. If I couldn't afford it, I would buy his regular burger, but it would always be a choice between his regular burger and the expensive one, depending on my finances. What it certainly wouldn't be a case of is me running off to Mcdonalds for a 99p burger as soon as his offer ended.

See what I mean?

;)
 
It's a race to the bottom ladies, and Im not taking part!

Decide on your Product/Treatment. Decide what standard you want to give and set the price to match this.

I dont often give direct discounts but I offer ad-on treatments for free or at a discount. eg Get an Artistic Colour Gloss Manicure (€35) and get a free Eyebrow shape etc
or else i try to upsell eg Upgrade your half body spray tan to a full body for an additional €10
 
I think an offer to promote a new product or new stylist is very acceptable, constant deals simply show desperation and I believe a good quality client can tell the difference.

If you do any offer you plan the deal, knowing exactly who its aimed at and how you will benefit long term, it should not be a knee jerk reaction but a well planned business decision.

I try not to think of it as obliterating the competition, I would rather see it as keeping me, my team and my building working.
 
Some brilliant replies by the way - I have learnt lots from this thread.

x
 
Glad Classix is in Liverpool, and not London!

We are certainly not racing to the bottom. Overall my prices are medium-high. I charge 45 for a cbd. The idea is you identify where you want to up your client numbers and choose one treatment to discount. This brings in new clients, who we can market to once they are on our system. We use our system to measure the success/failure of each promo.

This season, we are doing a blodry bar concept. Quick, cheap walkin type service. We want more of those weekly people as well as 20 something professionals. They can also book online. I used the same blobar concept as the salons in central London, with extras and add ons. We figure that people are working long hard hours, so affordable and easy are keywords. Once they have been in a couple of times, we become "their" hairdresser.
Nobody else is open as many hours as us, nobody local has invested in the tech that we have. Nobody has the product range we have.
We are simply looking at ways to attract the clients we want as a start point to introduce the range of services we provide,
 
I think alot of the time if you are a great hairdresser most people will stay loyal to you regardless of price. I always feel that if somewhere is offering a groupon etc that the quality of the work will not be good. Not saying that's always the case, just that i interpret bargains that way.
 
I think alot of the time if you are a great hairdresser most people will stay loyal to you regardless of price. I always feel that if somewhere is offering a groupon etc that the quality of the work will not be good. Not saying that's always the case, just that i interpret bargains that way.

I would agree with you if you did a % discount across the board. By targetting offers, you "take aim" at a particular client group.
A special offer treatment has to be approached from the perspective that it gives the stylist/therapist an opportunity to show off their skills/personality to a lovely new client, who also has a network of friends to rave about the salon to. If you are gonna do half hearted "cheap" work, its better not to do it in the first place, as negative reviews do more damage.
 
Thank you all soo much for your input....it has been great to see the difference in opinions across the board and also see it in a new light.
I totally agree with the use of targeted discounts....I've used them my self as a short sharp shock of a discount shall we say :D
The salon to which I was referring to in my post.........I do wish them luck and hope that in the long run they will be able to sustain a profitable business....I do however think they are a long way off for the time being.....£7.50 Shellac & Minx is just not the way forward not for the time period they have been doing it for xx
 
i have to admire classixuk and persianista, you guys have serious hard core business heads on you. well done, great advice. straight to the point.
 
This thread has defo been constructive and gave me food for thought, i also dont understand how some salons can charge as low a cost for some treatments, I do Keratin Complex (Permanent blow dry) and groupon eg are always doing deals for £60-£80, I know how much it costs in product and the stylists or salons doing this are hardly making any money on a treatment that takes roughly 21/2-3hrs yes im up for doing a discount but not 50-70% if i done a client at that price and they wanted a repeat treatment a few months later and told them the full price chances are theyl be on the lookout for another deal...unless the treatment wasnt done properly in which case the client may come back or not at all due to not being happy with the treatment.The service i provide i feel i cant cut prices this way otherwise im working for a pittence!
 

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