Old School VS New School Pricing.
Nina Tulio
The salon industry has come a LONG way from traditional pricing strategies that were once the norm. In today’s fast-paced, data-driven world, the way salons set their prices can mean the difference between making a profit and just getting by.
This is why I am so passionate about pricing. After helping thousands of hairstylists with pricing over the years, it’s about time we start to dial in one of the MOST important areas of your salon business. Let’s break down the key differences between old-school and new-school pricing and how you can adapt to stay ahead.
OLD SCHOOL PRICING
1. Pricing Structures
Services were priced similarly across the board without considering time, product cost, target profit, and depth of service.
Pricing menus- Mainly A La Carte which consist of long lists of services that clients don’t understand or match the service being provided.
This often led to profits being eaten up by rising expenses due to product costs being high and prices being too low.
***Be sure to choose a pricing structure that aligns with your business and not a structure that is trendy. Pricing is one of THE MOST important factors or running a successful business and must be chosen wisely.
2. Market-Driven Pricing
Prices were based on what the neighboring salon charged or gathering pricing info from a FB group rather than the salon’s actual data and costs.
Result: Undercharging and undervaluing services just to stay competitive.
3. Rare Price Increases
Price increases were infrequent and often avoided for fear of losing clients.
If a price increase was initiated it was lead with fear and over explaining and trying to convince the client of your value.
Inflation and rising overhead weren’t factored in regularly.
4. Discount-Heavy Strategies
Heavily relying on discounts or deals to attract and retain clients.
This conditioned clients to expect lower prices and devalued the overall brand.
New School Pricing
Cost-Per-Minute and Fact-Based Pricing
Salons now calculate their Price Per Minute (PPM) or Price Per Hour (PPH) to ensure pricing reflects actual costs and desired profit margins. I have been coaching to this for years and created 2 courses FOCUSED on data based pricing and package pricing so stylists/owners can make more money and increase profit.
This data-driven approach ensures profitability for every service and boosts confidence within the stylist.
5 Factors of pricing-
Time.
Product cost
Target Profit
TOTAL biz expenses
Hours worked
BONUS- Market research. Yes you must be aware of what your competitors are charging. **However, we do not price based on their prices.
2. Regular Price Reviews
Prices are reviewed annually to keep up with inflation and market demand. This doesn’t necessarily mean you raise prices every year. But more so have your pulse on the data in YOUR biz and can increase prices if the demand is there.
Clear communication to clients helps ease transitions. Short and sweet. No need for a novel and over explaining.
4. Focus on Value, Not Discounts
New-school pricing highlights the value of the service rather than offering steep discounts.
Stylists educating clients, offering a more customized experience, and paying attention to the details adds value more than ever.
Price transparency is HUGE! We are no longer living in an era where we should NOT be talking price in consultations. I suggest giving a range and not locking yourself into a price box. Protect yourself and your business and be upfront and honest aout price, time, and maintenance.
5. Simplified Menu
Stripping down service menus to provide convenience for the client and simplicity within YOUR business. The days of long lists of services is out and smaller more condensed, packaged services are in.
If you’re still stuck in the old-school pricing mindset, it might be time to shift gears. The new-school pricing approach isn’t just about charging more—it’s about charging smarter. By understanding your costs, valuing your time, and communicating your value to clients, you can create a profitable and sustainable business model that works for everyone involved.
Adapt, evolve, and watch your business grow!
Looking to price your service with confidence? Check out Make That Money course for suite owners/renters. And in my Synergy course for commission owners.
Psst! MORE Free resources are a click away!
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Join us from 12PM- 5PM at the Surety Hotel on Des Moines on May 5th, 2025. Lunch is included. This session is open to COMMISSION/hybrid salon owners and their managers. Or independents looking to hire a W2 employee in the near future.