Thriving Stylist Podcast Episode #386: "7 Pricing Models For Hair Stylists"

Release Date: May 19, 2025
Host: Britt Seva

Introduction

In Episode #386 of the Thriving Stylist Podcast, host Britt Seva delves into a critical aspect of running a successful hairstyling business: pricing models. As the beauty industry evolves, stylists must adopt effective pricing strategies to thrive amidst increasing competition and changing client expectations. This episode meticulously explores seven distinct pricing models, offering insights into their applications, benefits, and potential pitfalls. Whether you're a budding stylist struggling to stabilize your clientele or an established salon owner aiming to refine your pricing strategy, this episode provides invaluable guidance.

Overview of Pricing Models

Britt Seva emphasizes the importance of selecting the right pricing model, noting that "cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy" (00:02). Throughout the episode, Britt discusses the following seven pricing models:

1. Session-Based Pricing (Results-Based)
2. Bundle Pricing
3. Competitive Pricing
4. Hourly Pricing
5. Cost-Based Pricing
6. Economy Pricing (Ninja Turtle Pricing)
7. Dynamic Pricing

1. Session-Based Pricing (Results-Based)

Description:
Session-based pricing, often synonymous with results-based or project-based pricing, involves charging a flat fee for achieving a specific outcome. For example, a stylist might charge a fixed rate for transforming a client's hair to a particular blonde shade, regardless of the time or resources required.

Pros:

• Simplicity: Easy to understand and communicate to clients.
• Predictability: Clients appreciate knowing the total cost upfront.

Cons:

• Rigidity: Difficult to accommodate unexpected changes or additional treatments.
• Market Limitation: Best suited for luxury markets with well-established niches.

Notable Insights:
Britt shares a define-and-don’t-flex philosophy:
"In true results based pricing, the result that we had asked for was for the ceiling of our kitchen to be repaired and all of the electric to work again. He said, I can do that for X amount of dollars. That was our agreement..." (09:00)

She underscores that this model "works exceptionally well in a small amount of markets" but warns that deviating can lead to financial pitfalls, much like contractors who underbid and end up doing extra work for free.

2. Bundle Pricing

Description:
Bundle pricing offers a package of services at a discounted rate compared to purchasing each service separately. For instance, combining a haircut and color service for a lower total price than if each were booked individually.

Pros:

• Perceived Value: Clients feel they are getting more for their money.
• Increased Sales: Encourages clients to opt for multiple services.

Cons:

• Profit Margin Erosion: Unintentional discounts can reduce overall profitability.
• Complexity: Managing bundled services can complicate pricing structures.

Notable Insights:
Britt likens bundle pricing to insurance companies’ "bundle and save" strategy:
"You're getting more services with them, but they're discounting the cost..." (11:30)

She warns stylists often "fall into [bundle pricing] by accident," leading to unexpected financial losses. Britt advocates for unbundling as a foundational step for her clients, stating, "We unbundle. It's actually step number one" (12:45).

3. Competitive Pricing

Description:
Competitive pricing involves setting prices based on competitors’ rates, positioning oneself within the existing market spectrum.

Pros:

• Market Alignment: Ensures pricing is within the acceptable range for clients.
• Simplicity: Easy to implement without extensive calculations.

Cons:

• Lack of Differentiation: Fails to highlight unique value propositions.
• Blind Following: Risk of basing decisions on competitors who may not have optimal strategies.

Notable Insights:
Britt criticizes competitive pricing, describing it as "blind leading the blind" (14:07). She argues that unlike industries like technology, the beauty sector "does not work" well with this approach. Instead of mirroring competitors, she recommends focusing on one's unique business metrics and client needs.

4. Hourly Pricing

Description:
Hourly pricing charges clients based on the time spent providing services. For example, a stylist might charge $50 per hour for their services.

Pros:

• Transparency: Clients can see exactly what they are paying for.
• Flexibility: Adjusts to the actual time required for each appointment.

Cons:

• Client Perception: Clients may become overly sensitive to time spent, perceiving longer appointments as more costly.
• Profit Margin: Inefficiencies directly impact profitability.

Notable Insights:
Britt shares a personal anecdote highlighting the challenges of hourly pricing:
_"I was like, what happened with your stylist?... She said she charges by the hour. It takes a long time... So this model can create an emotional attachment to your time." (14:08)

She notes that while some stylists and clients appreciate the simplicity of hourly pricing, it can lead to "bitterness" if not managed correctly. Hourly pricing requires "a very strong grip on your time" to prevent clients from feeling they are being overcharged for inefficiencies.

5. Cost-Based Pricing

Description:
Cost-based pricing sets prices based on the business’s costs, including overheads and desired profit margins. The formula typically adds a markup to the total cost of providing the service.

Pros:

• Ensures Coverage: Guarantees that all business expenses are covered.
• Simplicity: Easy to calculate based on known costs.

Cons:

• Price Increase Dependency: Any rise in costs necessitates a price hike, which can deter clients.
• Doesn't Reflect Value: Ignores the perceived value to the client, focusing solely on internal costs.

Notable Insights:
Britt expresses strong reservations about cost-based pricing:
_"Imagine if that's how other businesses ran. Like, you as a consumer would hate that." (18:15)

She draws parallels with the fast-food industry's shift to cost-based pricing, resulting in decreased affordability and reduced customer frequency. Britt argues that "cost based pricing... is really fragile" in the hairstyling industry, where maintaining client frequency is crucial for sustained growth.

6. Economy Pricing (Ninja Turtle Pricing)

Description:
Economy pricing positions a stylist as a low-cost leader in the market, offering services at the most competitive prices to attract a high volume of clients.

Pros:

• Increased Demand: Lower prices can attract more clients and increase appointment frequency.
• Market Penetration: Effective for capturing a larger market share quickly.

Cons:

• Low Profit Margins: Sustaining low prices can lead to burnout and financial strain.
• Price Increase Resistance: Clients may resist future price hikes once accustomed to low rates.

Notable Insights:
Britt describes economy pricing as "Ninja Turtle pricing" due to its aggressive cost leadership approach:
_"The problem with economy pricing is that the margin is generally much, much lower... burnout is right on the horizon." (20:30)

She cautions that while economy pricing can boost demand, it is "not sustainable" in the long term. Additionally, transitioning to higher prices can be challenging, as clients "can be very resistant" once accustomed to lower rates.

7. Dynamic Pricing

Description:
Dynamic pricing adjusts rates based on a combination of factors, including business costs, market demand, client affordability, and stylist capacity. It utilizes a comprehensive approach to set prices that align with both business objectives and market realities.

Pros:

• Flexibility: Adapts to changing market conditions and business needs.
• Optimization: Balances multiple factors to maximize profitability and client satisfaction.

Cons:

• Complexity: Requires a sophisticated understanding of various business metrics.
• Implementation: May necessitate specialized tools or software for accurate calculations.

Notable Insights:
Britt champions dynamic pricing as her preferred model, referring to it as the "proven method" that "just works":
_"My favorite is dynamic pricing. It's what I've always coached to... we have a proven method. It just works." (23:45)

She explains that dynamic pricing considers seven key factors—cost of doing business, client affordability, capacity, existing and desired demand, cost of goods, and timing—using a specialized calculator developed with a professional engineer. Britt highlights its reliability, stating it "works 100% of the time, every single time," by integrating multiple aspects of the business rather than relying on a single pricing strategy.

Insights and Conclusions

Throughout the episode, Britt Seva provides a balanced analysis of each pricing model, emphasizing the importance of aligning pricing strategies with business goals and market dynamics. Her overarching message is clear: there is no one-size-fits-all approach. Instead, stylists must assess their unique circumstances, client base, and business operations to determine the most effective pricing strategy.

Key Takeaways:

• Understand Your Market: Different pricing models resonate with different client segments. For instance, session-based pricing is ideal for luxury markets, while economy pricing appeals to budget-conscious clients.

• Avoid Common Pitfalls: Models like competitive and cost-based pricing can lead to unintended consequences, such as reduced profitability or decreased client frequency.

• Embrace Flexibility: Dynamic pricing offers a comprehensive solution by considering multiple factors, ensuring that pricing adapts to both business needs and client expectations.

• Prioritize Transparency: Regardless of the chosen model, clear communication with clients about pricing structures fosters trust and reduces misunderstandings.

Britt concludes by encouraging stylists to critically evaluate their current pricing strategies and consider adopting dynamic pricing to ensure sustainable growth and profitability.

Final Thoughts

Episode #386 of the Thriving Stylist Podcast serves as an essential guide for hairstylists seeking to refine their pricing strategies. By dissecting seven distinct models, Britt Seva empowers her audience with the knowledge to make informed decisions that align with their business aspirations and market demands. As the beauty industry continues to evolve, understanding and implementing effective pricing models will remain a cornerstone of success for stylists and salon owners alike.

Transcript Reference:

• References are made to the transcript timestamps for accurate quoting and context.