As a career coach to scores of aestheticians over the years, a commonly asked question involves service pricing – what to charge for the various treatments one plans to offer customers. Many considerations come to mind:
- What are people in my area willing to pay?
- As a new aesthetician, should I start off charging less, then go up in price later?
- What’s normal for a new, small spa like mine?
COMMON PRICING METHODS AND MISTAKES
One of the first things solo aestheticians do when pricing a service list is to check out the local competition. This usually involves visiting competitors’ websites, reviewing their service menus, and seeing who is charging what for services (including time allowed) similar to those they plan to offer. This comparison-based information gathering is often called finding the going rate or determining the average local charge for like services. Other factors enter the picture, such as the size and design of these spas, company reputation, number of years in business, and so forth.
Another pricing method has to do with professional experience. Newer aestheticians seeking customers for the first time may judge themselves unworthy of higher service prices and be tempted to begin with lower local average or discounted rates until more professional experience has been established. The assumption in this model is that potential clients will somehow know they are working with a lesser skilled aesthetician and are unlikely to pay premium or even conventional prices.
And, one more way some professionals calculate pricing is based upon a philosophical concept. This aesthetician hopes to offer his or her services as more affordable than others in the same market. Service prices are generally set lower than the local average, with the hope of attracting more budget-minded customers and representing a socially responsible approach to business.
While seemingly logical or ethical on the surface, all three of these pricing models are erroneous. In the first model, the going rate comparison, this assumes that those business owners know what the right prices are for their services; therefore, it would be wise to price in line with them. The fact is that they, too, may have priced like everyone else nearby without really knowing what customers were willing to pay.
Pricing to reflect some notion of experience equaling service value might be smart if a client actually used that as a criteria for choosing a professional for treatments. But, in reality, very few clients ask about a professional’s experience before scheduling an appointment with one. We professionals are not obligated to disclose how long we’ve been licensed or where we’ve worked in the past other than in a job interview.
Philosophical pricing, wanting to be affordable to as many customers as possible, also assumes that we know what that pricing threshold actually is. How does one know what is affordable or fair? If we price facial treatments at $50 instead of $95 in an effort to be fair, aren’t we still being unfair to those for whom even $50 is still unaffordable? And, do we know whether or not those prices will sustain the business over time? Shouldn’t we be fair to ourselves, the hard-working owners, who need to make a living?
EFFECTIVE PRICING STRATEGY
Here’s my down and dirty service pricing strategy for solo aestheticians who want to succeed.
- Know your costs – rent, utilities, business services, treatment supplies, per-treatment costs, marketing – everything that you’ll be paying out every day of every month. Add it all up, average it out, and see what you’ll need to earn each day just to keep the doors open. Then, decide what you want to earn on top of that (pre-tax) and price your services, however many and whatever type you plan to do on a business day, to achieve those earnings. It may take you a while to reach the sales volume you’ll need to hit the mark but pricing this way will at least allow you to head straight for it.
- Price for whom you want to be, not for what you (mistakenly) think you are. When I first became a spa business consultant many years ago, I asked a seasoned professional in the same line of work what fees I should charge. I expressed concern about my lack of experience, so was hesitant about overreaching. His answer: “Charge high and see what happens.” I did – and my first client signed with me even after I told his team that their spa was my only assignment so far! Emphasize your assets and not your self-perceived disadvantages. You can always reduce prices if you fail to attract customers. Never price from your own idea about what you think your services are worth. Most aestheticians were not paying customers for skin care services prior to licensing, so we’re not likely to be the best judge of what a real customer is willing to lay out for treatments.
- Never price for philosophical purposes, only for your own business needs. You need to make a living and not sacrifice your future for a likely incorrect idea about customer affordability. If you want to be generous, set aside an appointment now and then to gift to someone you know who is in need or would really appreciate the consideration. This way everyone wins.
I hope these guidelines help you make the right and most rewarding decisions about service prices in your spa. They have worked well for me and the many thriving aestheticians who used them in their own business decisions.
Douglas Preston, president of Preston Beauty Professional, has a career that spans 33 years in professional aesthetics, education, and skin care career mentoring. His business articles appear in DERMASCOPE Magazine, Spa Management Journal, and others. He is a past president of Aesthetics International Association and a former committee chairman for The Day Spa Association. Preston has started and operated award-winning day spas, trains spa and skin care professionals internationally, and is a featured speaker at numerous spa and skin care trade events.