Pricing Salon Services: The Four-Tier Strategy

Moxie Hair Salon in Minneapolis

Is there a formula for properly pricing salon services? Stephen Adams (@stephenadamshair), Co-Owner of Moxie Hair Salon in Minneapolis, has landed on a winning pricing strategy for his salon. While setting prices depends on a balance of items like the going rate, rent and overhead costs, Adams has found that tiered pricing works best for Moxie. “In our salon, we have tiered prices,” says Adams. Moxie Hair Salon starts their stylists at $30—a low price for new hires to build—and moves up in either $5 or $10 increments depending on a simple formula of four key elements:

1. Reputation: This is based on the number of new guests won and the stylist’s retention rate.
2. Education: Is the stylist actively attending classes? Adams encourages at least four educational events per year.
3. Experience: How long has the stylist been working?
4. Demand: What is the stylist’s rebooking rate? Stylists at Moxie strive for at least 80 percent.

Stephen Adams

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And communicating the price increase to clients without alienating them can be done successfully via a solid plan that includes putting up signage congratulating the stylist for doing an excellent job and reaching their goals six to eight weeks before the new rate takes effect. This informs the guest of the coming price increase, and the stylist is then coached on how to communicate this to their guest. “Be excited and never apologize. Own it because you deserve it,” says Adams. “Have referrals ready and introduce them to a stylist that you personally recommend if the cost is too much for the client.” 

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