3 Ways to Increase Hairdressing Profit

3 Ways to Increase Hairdressing Profit

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There’s no silver (gold or green) bullet for making more money as a hairdresser. The road to riches – and there is more than one – has many lanes, some faster than others. Some people chant the “Work Smarter, Not Harder” mantra, but the truth is that you may need to do both. Start with the three most effective ways to improve your financial position: Raising your prices; growing your clientele, and keeping the clients you already have.


Raise the Bar; Raise the Price.

At a minimum, you should be increasing your service fees by about 2% per year just to keep up with the cost of living. Beyond that, determine a percentage that feels comfortable for you and will make a positive difference to your bottom line. Of course, you have to be convinced that you deserve it, and this is a matter of appreciating the quality of the work you offer and how your clients value that quality. You do hair to make a living, and clients don’t expect it for free!

Julia Elena is in her fifth year as a colorist, and tax time was a wake-up call this year; money coming in wasn’t in sync with money going out, and something had to change. “I never paid much attention to the business side of things. I was always thinking creatively,” she explains. “I thought that if I’m creative and I love what I do, money will come.”

But the realities of being an independent artist came to light: “I’m working so hard but I’m not getting the money I need from it. I am a business person after all – without the benefits I might have as an employee, like health insurance – and I realized I needed to set new goals for myself, which is exciting for me.”

So Julia decided to set a new price for new clients, and instituted a modest increase for existing ones. “I didn’t feel intimidated talking about it with my clients because I feel very good about the work that I do and the time that I put into it,” she says. So she prepared a script to be delivered via text or email in advance of appointments: This year I have decided to raise my prices. I feel that it’s time to charge more for what I put work and time into with so much love. I hope you are still excited to come and get your color done.”

Beau Bollinger, founder of Hairstory Dallas, a cooperative of independent hairdressers is passionate about this subject: “It’s safe to say that the average hairdresser sees 20+ clients a week. If you raised your rates $10 per client, that’s at least $800 more each month – more if people tip you by percentage,” he explains. “If you limit your raises to once a year, the chances that clients will leave you for a $10 increase are pretty slim.”

The more value you provide, the more you can charge.

The more value you provide, the more you can charge. Value can mean many things – exclusivity, customization, specialization – so work on defining and refining your value proposition.

“Consider this,” says Beau: “If our only control is over price and time, what if you reduced your available hours? It would drive up demand, increasing your value and what people will pay. It’s counter-intuitive, but it works.” He thinks that working extra hours to make extra money takes a toll – and it’s the way that most salons have programmed hairdressers. Instead, “Working less with longer appointments (slower pace, better experience) at a higher value is the direction I have been heading,”

While you may feel nervous about upsetting loyal clients, many with budget constraints of their own, be prepared to explain the reason – transparency about rising costs or planned improvements – or even new educational credentials that enhance your skills – can convince clients to buy in

You Get What You Pay For

Research shows that the price of something influences the perception of value or quality. When faced with a product or service that is inexpensive, most people assume it is of inferior quality. In a well-known study, psychologists asked people to blind-taste a selection of wines, without mentioning the price. Results revealed a slight preference for the less expensive samples. But when told a wine was expensive, participants gave it a higher rating – they expected to enjoy it more.

When faced with a product or service that is inexpensive, most people assume it is of inferior quality.

When you discount high-quality services, you send conflicting messages about their quality. Make your services and the client experience the very best you can – and charge accordingly.


Come One, Come All

Step two in enlivening your livelihood is to find more clients, and even in the age of social media, nothing beats old-fashioned word-of-mouth. Every client is a walking, talking, hair-tossing advertisement for your work, and all of them have more influence and reach than you can on your own. When you’ve made a real connection and a good impression, asking for referrals should come naturally.

To beat those odds, the trick is to make sure you market yourself with your ideal clientele in mind: People who are the perfect fit for your salon practically speaking – conveniently located, for example – and creatively – you get each other’s vibe.

Julia has had an ongoing creative color project she does purely for the love of it, and she is always scouting creative models who often become the source of new clients. “I’m always asking people if they want to participate, and that person ends up telling their friends about me. Doing color on a complimentary basis leads to new business.”

Clients who refer each other create community and a deeper bond all around. Besides, it’s a lot harder for a client to leave you when all her friends want to stay. If you don’t have a referral strategy, start one yesterday.

Clients who refer each other create community and a deeper bond all around.

The second-best recruitment method? Instagram. Marketing is no longer a one-way street; social media is a dialogue. When making a purchase decision, people now get more information about it from other people than from who is selling it. Be part of that conversation. Read our best tips for hairdressers on Instagram here.


Attrition & Retention

The average hair/beauty business loses up to 25% of clients each year. And, when it comes to new clients, 67% never return for that second visit. Your retention rate – how well you’re keeping clients – may be the most important metric of all. The best type of client is the one you already have.

Here’s the easiest way to get a retention snapshot: Take a 3-month period in your schedule from a year ago and see whose hair you did. Then take the same period a year later and compare. Who came back? Who didn’t? You can expect to lose some people due to factors you can’t control, but it’s worth looking at the things that you can control, and what you might do differently this year.

You can expect to lose some people due to factors you can’t control, but it’s worth looking at the things that you can control, and what you might do differently.

Hairdresser Jason Devastation noticed that he was seeing fewer clients a day than he would like. He knew his retention rate was good overall, but he wasn’t doing enough to replace who he was losing to the inevitable relocation to other areas, coasts or countries. And, it seemed that people were economizing by booking less frequently.

So he decided to analyze his business in greater depth. He uses online booking software and can run reports, but he still wanted more. So he went right to the source and created an online survey to query clients about their experience.

The first two questions were revealing enough on their own: How long have you been a client? Are you still a client? That helped him be clearer about his active client base. Other questions asked for opinions about price, location, the space itself, and a rating of his services. He made sure to include spaces for comments after each question. Results are still coming in, but a survey offered clients a way to give feedback more freely than they might in person.

Now comes the task of recruiting new clients. “I built my clientele through word-of-mouth, and I would rather have referrals from them. Most of them have been with me five years or more, and they send me good people who are a good fit.” A referral program rewarding clients for bringing in friends may be in the offing – and he may make himself available a few more days a month.


So what’s next? First, define your 1-year income goal. Then calculate monthly goals based on your year goal. Commit to taking one action today that will bring you closer to achieve those goals, and you’ll be well on your way. (If your goal is to learn about setting goals, read this!)