In this week’s dose inspiration, education, and encouragement, I want to talk about something that might bring up some uncomfortable feelings. But nothing great ever came from comfort zones, right?
Today I am asking a simple, but hugely important question that affects the long-term health of your aesthetic business:
Are you undercharging for your services?
Don’t worry if you’re unsure of the answer; we’ll get into that in a second, but before we get into the specifics, I want to touch on why pricing can be such a challenging topic.
First and foremost, pricing has the tendency to bring up uncomfortable emotions. This can happen consciously or subconsciously, but the reality is, many of our mindsets around pricing are related to our worth and value as a person rather than as a professional or as a business.
This mindset results in thoughts like, “Can I really charge that much money for a facial?” or “Am I qualified enough, skilled enough, good enough to charge these rates?”
As women, we often have difficulty quantifying our own worth into a healthy and sustainable rate, which results in consistently undercharging for our services.
Additionally, many business women who set their own rates feel that they're already overcharging, when in fact, they are undercharging compared to industry standard pricing.
So, how do you know if you’re undercharging for your services? The best way to determine that is two-fold:
1.) Have a clear understanding of the customer experience in your spa.
2.) Be keenly aware of your competition.
Let’s start by breaking down your customer experience. What level of service do your clients receive when they come to see you? Do you have a receptionist? Do you have a lounge? A variety of refreshments? Any extras that you offer to make their experience extra special?
Take an objective look at what you truly offer your clients at every touchpoint of your client’s experience.
Once you have a clear idea of the level of service that you provide, I want you to find 10 or so competitors in your area. It's important to note that these be true competitors. If you’re a solo aesthetician renting a single room, you are clearly not going to charge the same as a spa with a locker room, lounge, and other amenities because your customer experience is inherently different.
So once you've found those solo aestheticians or spas that provide a similar level of customer experience, go check out their spa, their website, and their prices. How do they compare to yours? And most importantly, what are they charging?
Use that information you’ve collected to get a gauge on how and where you fit into the market.
Once you’ve compared all your notes, you may find that you’re on the lower side of the price scale, or that you’re well below the pricing of your competitors. If that’s the case, perhaps you should consider raising your prices.
I know this can be a scary topic for many, but this is a normal part of doing business, especially if you want your business to survive and thrive.
Another thing to point out is that if you’re not increasing the price of your services, you are decreasing your profit margin as the price of goods and supplies go up over time, and that is also not good for business.
Now my challenge to you is to take action and know where you stand when it comes to pricing. Knowledge is power, and when you have the knowledge of what your competitors are charging and the landscape of the marketplace, you have the power to change your situation.
Are you up for the challenge? Let me know if you’re in by leaving a comment below, and be sure to join the conversation in The Aestheticians Connect Facebook group for more lively and informative discussion about managing a spa or running your solo aesthetic practice.