When it comes to setting a price, creating a successful service is a bit of a balancing act: You need to ensure that you’re charging enough to earn a sufficient profit, while at the same time offering your clients a quality service at a reasonable price. In considering your own bottom line, you must first consider the cost you’ll incur per treatment, notes Ruth Kallens, founder and partner at Van Court in New York City. Factor in product expenses (right down to the orangewood sticks, buffers, files, cuticle and polish remover), as well as the rest of your overhead (including labor and operation costs, such as electricity, rent, water and gas).
Some manufacturers can help with calculating your product costs. Carla Hatler, owner and founder of Lacquer, with two locations in Austin, Texas, looks at the cost per service (CPS) that the product manufacturer provides. If that information isn’t provided, Hatler measures how much product techs use for each service. To further inform the CPS, Megan Richardson, cofounder of Sand Spa based in Manhattan Beach, California, adds up anything else that contributes to her overhead. “We consider marketing, labor, rent and operating expenses,” she says. It’s even important to factor in things like employment taxes, Hatler adds. Once you’ve determined these fixed costs, you’ll be able to figure out what you’ll need to charge to break even on that service, notes Richardson. “Then, you need to figure out what you want to make on top of that,” she adds. “If you want to make 50 percent, which is typical in a nail salon, mark up your number (fixed costs) by 50 percent.”
Of course, you’ll need to check that number against what you believe your clients are willing to spend. “The local market needs to be considered,” Kallens says. “What is the going rate for manicures [in your area], and what type of clientele are you seeking?” Knowing the salon’s demographics (what customers buy, where they shop and their approximate income and spending habits) helps Sand Spa price accordingly—and offering top-quality services also allows them to charge premium prices. The pricing strategy is partially driven by what the owners want the business to become. “We identify who our customers are and what our competitors are charging, and we understand the relationship between quality and time,” says cofounder of Sand Spa Gretchen Tiernan. “One of our goals is to expand, so we have to price our services so that we cover our costs, make a profit and set aside money for expansion.” After taking this all into consideration, you back into your service menu pricing, concludes Kallens.
Yes, time is money—and, as with pricing, there are a few things to consider when determining how much time should be invested in each treatment. After all, you don’t want to sacrifice quality to save a minute or two, but you also don’t want your busy clients to be impatiently checking their watches
throughout the service. “Clients are really only willing to sit for an hour and a half when it comes to a mani/pedi,” Kallens notes. “For the most part, a manicure should take no longer than 40 minutes, and a pedicure should be about 45 minutes, max.” That said, it’s important to tailor the treatment to the client’s needs. “For example, a client may want a treatment with only minimal massage,” Kallens explains.
At Lacquer, Hatler says the goal is to clock services at an hour or less—but she’s willing to bend the rules when adding certain new treatments to the menu. “We try to keep the time and effort consistent with the other services we offer; we don’t add extra steps or time to justify a higher price point,” she notes. “We really are focused on results and the time it takes to achieve them.” Incidentally, treatment durations also help with determining menu pricing. “We try the service on staff members to see how much time it will take and factor that into the cost,” Hatler explains. “Generally, we price services around $1 per minute and then go up from there, depending on product cost.”
Smart time management also comes into play when offering new services; you can’t announce the introduction of a treatment unless you make it readily available when your clients want it. That means you’ll need to plan ahead, as well as expect the unexpected. Tiernan recommends monitoring the trends of your community and what days and times are the most popular, in addition to consulting the appointment book. Though staff at Sand Spa plan for each appointment, keeping enough techs on hand allows them to handle a large group popping in after a business lunch.
Finally, in addition to actual service time, consider the between-service steps that go into creating the ideal client experience. “We’d rather be known for the best service than a fast one that lacks in quality,” Richardson asserts. “For example, proper sanitation takes time, and that’s not something we’re willing to compromise to help our bottom line. Customers will pay more for a cleaner, safer salon experience—and if your practices don’t place the health and safety of your clients at the center of your business, you will not make it in this industry.”
Skills That Thrill
When creating a service, you want to ensure that the amount of work you’re putting in directly correlates to the benefits that clients reap. Hatler, for example, has created a hit with her Organic Manicure and Pedicure, which appeals to a wide range of clients, including their kids. Her secret? Attention to detail. Techs employ quality products from start to finish. “We soak in a bath salt, use a solvent-free polish remover if needed, file and shape, offer cuticle care with sesame seed oil, massage with an organic avocado and shea butter lotion, polish with base coat, 5-free nail polish and top coat, and apply grapeseed oil to condition the cuticles afterwards,” Hatler explains. “We see the process all the way through—and, just as important, educate our clients as we work.”
To ensure the best possible outcome, all techs should be thoroughly trained in delivering every service—and, better still, there should be a consistent, streamlined structure. At Sand Spa, owners and techs alike know the breakdown of each service: A 40-minute pedicure includes a 10-minute soak, 10-minute nail trim and file, four-minute soak, 12-minute exfoliation and moisturizer application, and four-minute cleaning and polish, followed by drying time. “To successfully strategize a service, the framework must be thorough—and if all your employees are on the same page, your business will run efficiently,” Tiernan says. “To be able to find a balance between the work and the outcome of each service is not an easy task; it really comes down to your people.”
Our savvy owners share some extra tips for service success.
“The main focus of our services is to create just that: something that serves. Our clients will always be at the center of everything we do. When we go to break down the costs, time and results, we must be precise and efficient. But any time you highlight a service, think about what you’re selling. It’s less about a 10-minute massage versus a 15-minute massage and more about an enticing description, such as ‘Seasonal Pumpkin Spice Pedi with a sugar scrub and 10-minute foot massage for $49.’” —Gretchen Tiernan and Megan Richardson, cofounders, Sand Spa, Manhattan Beach, CA
“For new services, I rely on feedback from the staff about what customers are requesting that we don’t currently have on the menu, or I build a service around an amazing new product that the staff loves and would love to promote. To make the introduction of a new service effective, it’s important that the staff is trained not only on the new service protocol, but on the products used as well. An educated service provider makes a lasting impression on clients and encourages the staff to feel confident in their work.” —Carla Hatler, owner and founder, Lacquer, Austin, TX
“It’s important to keep the employees and clients happy. That’s why it’s a good idea to have extras, like extended massage, offered as an add-on option. If a client wants a 10-minute massage, she needs to pay; usually, $1 per minute is fair.” —Ruth Kallens, founder and partner at Van Court in New York City
–By Tracy Morin
This article was first published in the December 2017 issue of NAILPRO