When to Discount in Your Salon: 5 Times It's Fine, 5 Times It's a Mistake

Discounting isn't the crime everyone tells you it is. The crime is discounting because you panicked instead of because you planned to. Today, five times a discount is a perfectly good idea, and five times, maybe not. Plus what to say when someone asks you to knock a bit off. Hello, hello, hello, my salon friends. Phil Jackson here, your queen of salons, coming all over the internet again with another dose of my Wise Owl Wisdom. How on earth are you? Achingly well, I hope. And with 27 years in this industry, I've made just about every discounting mistake there is to make so that you don't have to. There's a lot of noise out there telling you, a lot of business coaches as well actually, telling you that discounting is always wrong and you should never drop your prices ever. End of story. And there's just as much noise, probably in your head, telling you to slash everything to fill your column. And both of those are a little simplistic. The truth is that a discount is a tool. And like any other tool, it's brilliant in the right hands at the right time and dangerous in the wrong ones. So today we're going to sort out which is which. But first, a word from our August sponsor, Pretty Data. How useful would it be to see exactly how much more money you'd make if you adjusted your prices? Well, Pretty Data has the market data on what salons near you are charging. Then it does the maths and shows you the real number that you're leaving on the table. If raising your prices scares you and you don't even know if you're underpriced, start your free trial at prettydata.co and I've put that link in the show notes. So today, discounting, when I started out, I had no backbone on pricing at all. Somebody could just raise an eyebrow at the cost and I'd fold before they'd even finish the sentence. I could do you a little something off this time. And I thought I was being kind. I thought I was helping keep the client. But what I was actually doing was training every single client that my prices were a suggestion and that the eyebrow worked. And they learned quicker than I did, because before long, I had a clientele who all expected a bit knocked off because I trained them to. Worse than that, I had lots of people paying different prices and that became a bit of an embarrassment, to be honest, because somebody would recommend a friend and then the friend didn't get the discounts and it all just got very, very messy.

So there's a thing that we need to understand before we go any further. Clients don't just take the discount you give them today. They remember it and they expect it tomorrow because you're anchoring your prices at a new point. Every discount you hand out is a lesson that you're teaching them about what your work is worth. So we've got to make sure we're teaching them the right lessons. But there are times that a discount is actually fine. And the first is to fill genuinely dead time. So if your Tuesday mornings are a graveyard, not as a one off, as a consistent pattern, and you're trying to get people to move into Tuesday mornings, then we could look at something like an off peak rate to fill them. And that's sound business, because an empty chair earns you nothing at all. The key to it is that this is structured and named a proper off peak price, not you randomly caving on a Sunday evening because you've just looked at Tuesday and it's crickets. So we're putting a price on that time that was otherwise worth zero. Number two is when we're launching something new, an introductory offer on a brand new treatment or a brand new product or to help a brand new team member build their column is an investment. A beauty room bringing in a new skin treatment or a salon helping a junior stylist fill their book, that matters. Okay, but it matters when it's new, it's time limited, it has an end date to it, and you stick to it. By the way, I don't have models for new treatments in my salon, we have case studies, I think it's much easier to have a certain number of case studies available than it is to offer model rates for a certain amount of time, because ultimately, we want to get people paying full price again. Also with case studies, I think people expect you to know what you're doing a little bit, they expect a bit less of a discount. Number three is when the discount buys you something back, and this is the best kind. If dropping the price moves a client onto something that's better for both of you, then I think it earns its keep.

So I'm talking about, let's say, a membership where they commit to coming every month, or a course of treatments paid for upfront, which means that we're getting a slightly different pattern of spend, but a different pattern of cash flow. A package that locks people into three appointments instead of one, you're giving something on the price, but you're getting something back in terms of commitment, in terms of predictability, and in terms of cash flow. That's not a giveaway anymore, that's a trade. Four is to clear stock. Retail that's about to go out of date, a product line that you're discontinuing, it's better to sell it at a discount than it is for it to sit there on the shelf and get dusted again and again and again. We did this every Christmas. If we had Christmas packs in and there were any left, Boxing Day, they went on sale. I wanted them gone. I was not going to be breaking packs down or dusting those products when it came to March. And number five, a genuine occasional thank you to your very best clients. A real genuine treat for the handful of people, and I mean a handful, that have been loyal for years is lovely and it builds the relationship. But it has to be genuinely rare. As soon as it turns into a habit, it stops being a thank you and it starts becoming the new price. So they're the good times for discounting. What about the bad times? Well, what about when a client starts haggling at the desk? And this is a big one. Someone gets to the till, asks if there's anything you can do on price. If you drop it there and then, you've just taught them and everyone else in earshot that your prices move if you push. So don't improvise. Have a calm, friendly line at the ready. My prices are my prices. I keep them fair and I keep them the same for everyone. So I can't knock anything off you today. But what I can do is get you booked backed in so you never miss your slot. You're holding the price warmly and offering them something that isn't money off. Number two is when you discount your signature service. The thing that you're known for, the thing that you are brilliant at, is the last thing that should ever be on offer. Discount your best, most in-demand service and all you've done is reset everyone's idea about what that service costs. Never put your hero treatment on sale. Number three is when we discount to everyone.

A flat percentage off for all cameras feels generous, but what it does is tells your existing, happy, full price clients that they've been paying too much. And it attracts exactly the kind of customer who only ever turns up for a deal and vanishes the moment you try and put your prices back up. You don't want columns full of bargain hunters. You want clients who value you. Number four, and this is the other big one, this is the one that I was guilty of, discounting not because you have anything strategic in mind, but somewhere inside you don't quite believe you're worth the full price. If that's the reason that you're discounting, I promise no level of discount is ever going to fix that because the problem isn't the number. The problem is your confidence in the number. So the answer to that isn't a lower price. The answer to that is getting honest about your value and holding your nerve. This isn't one for your accountant anymore. This is one for your therapist. And number five is throwing money off to fix a complaint. When something's gone wrong and a client's unhappy, the reflex is to discount your way out of it. That isn't a great temptation. Try and resist it. What upset a client, what an upset client rather actually wants to feel is heard and have something put right. Fix it properly. Redo the work. Sort the issue. Show the client this won't happen again for them or anybody else instead of reaching straight for the discount. And I never discount for a client that I think is lost. Sometimes we might offer somebody a refund as a gesture of goodwill. In very extreme cases, that goodwill is gone if you've already lost the client. So they are not going to get anything, I'm afraid. If you start reaching for discounts, you're teaching people that complaining is how you get something cheaper. So what do you think? What have I missed? Why not reach out and let me know how you're handling discounts? Maybe I've missed an amazing use for discounting in your business. What are you doing? Reach out and let me know. My address, phil.buildyoursalon.com, scrolling at the bottom of the screen. I really want you looking at discounting that you're doing right now and start to figure out whether it's actually a good idea or whether it's something that we need to be getting rid of. Also, getting rid of discounts is a really good way of not having to increase your prices a huge amount next time round. But if this episode has got you realising that your pricing has been running on nerves instead of numbers, that's worth fixing. Why not head over to 10minutemoneyfix.com?

I've put together five fixes that can each be implemented in under 10 minutes to help you keep more profit in your salon business. 10minutemoneyfix.com, £9 is the quickest way to stop leaving money on the table. That's me for this week. Just a few short days. Well, actually, seven short days until I'm coming all over the internet again. Have a brilliant weekend. And until we speak again, take care. Thank you.