If you can strike the right balance, your salon’s pricing strategy will increase profit margins and enhance the client experience.

For most salon owners, the biggest challenge isn’t launching a business, hiring stylists, or ordering equipment — it’s coming to grips with finances. The harsh reality is that beauty businesses typically have low profit margins, which means your entire team is working harder to make ends meet. This dynamic isn’t sustainable, but what can one do given the nature of beauty work?

Lots, actually. With just a few simple adjustments to pricing and scheduling, salon owners can increase their revenue without overtaxing their stylists.

Numbers matter, so level up your salon reports

Real talk, salon owners: You need to up your reporting game. Full stop.

Far too many salon owners tell us the same story. Maybe they spent too much on equipment or restocked on product when they already had enough. Perhaps their payroll structure doesn’t reflect the financial needs of their business. One way or another, they overspent and lacked the reporting tools to understand where they stand financially. The default response is usually a guessing game of how much revenue they need, creating goals that won’t bring in enough money. Some owners realize they’re spending too much but aren’t sure how to create incentives to drive revenue.

In all circumstances, the solution starts with accurate reporting instead of guesswork. You can always course correct, but you might as well be driving blind on a highway if you don’t know your position. If reporting isn’t your skillset, look into some intuitive salon-friendly tools that do the heavy lifting for you.

As a salon owner or manager, your role is to coach service providers to understand their financial state as well. Consider what reports might provide valuable intel for stylists and make that data accessible to them.

Your stylists’ time is a valuable asset — charge for it

Beauty work is a skilled profession, and stylists are trained professionals. Most industries acknowledge this training by charging an hourly rate based on experience and ability to deliver. Salons, on the other hand, tend to bill by service — and this is where everything goes wrong. If you hire experienced stylists but assign service-based fees, payroll will eat into your profit margins sooner or later.

The simplest solution is to charge clients for stylist time or combine the pricing strategies. Simple services like blowouts can still have standard pricing rates, while complex tasks like color corrections, hair extensions, or event styling should use hourly rates. If your stylists need to be on location, owners must include travel time in their rates. 

Planning your pricing structure is the first step, but you’ll also need to work with service providers to ensure they understand their financial responsibilities to the business. Communicate expectations clearly, in terms that make sense for them — rather than saying “bring in $1,000 of revenue,” you may say “book five highlight appointments.” That subtlety can make all the difference in getting everyone on the same page.

Make it worth their while with appealing add-ons

In many cases, the simplest pricing technique is to enhance each appointment’s value. One of the best examples is offering add-on service menus. This approach is an excellent way to apply bonus treatments, say, while a client’s hair soaks in a shampoo bowl without adding additional time to appointments. Alternatively, consider promotions such as retail or gift card sales. Not only will these purchases increase revenue — especially during the holiday season — but they can attract first-time clients to your salon with a “free” treatment.

Finally, loyalty programs are a great way to bring value to your entire brand. By earning digital points for each appointment, clients can earn free sessions and product. If you manage a salon chain, these points can carry over to other locations — an excellent benefit during a move or vacation.

When all else fails, raise your prices

I know, but hear me out!

Yes, salon owners worry that raising service prices will drive away regular clients. But if stylists spend all their time on low-cost, low-quality service, it’s harder to expand your profit margins. By slowly raising prices — say 10% every other year — the increased revenue will make up for lapsed clients while contributing to higher-value services.

That’s not to say you shouldn’t communicate with your clients — the easiest way to create issues is to avoid transparency. Create guidelines for how staff can discuss these changes with customers, especially your frontline receptionists. You can also consider awarding long-term discounts to your highest-value clients, such as those who constantly recommend new business for your salon.

Taking action to drive salon revenue can be challenging at first, especially for smaller establishments. Once you find a strategy that works for your salon, profit margins will increase, stylists will be happier, and clients will be more satisfied with the quality of your service. At the end of the day, striking that balance helps everyone win.