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How to Survive the Beauty Price War

Written by Colin Clapp on June 13th, 2014.      0 comments


Standing out amongst a sea of competitors in the Beauty Industry can be difficult when there are those waving a big red flag quoting treatment prices that are ridiculously low – just to win the work.

This tactic may gain competitors an advantage in the meantime, but it isn’t sustainable - and there’s very little chance of them being around for the long term.

While you can tell yourself that they are the ones losing money on the sale and not you, the reality is you still have to earn a living and cover your overheads every month.


 
NZ Beauty Treatment Pricing War
So how do you survive a price war?

The first thing to do is to accept the law of supply and demand and realise that during an economic downturn, the customer is always King.

There’s nothing the customer would like more than to see you and your competitors get into a price war so they can spend as little as possible to get their problems solved.

But, you also need to realise that apart from the lowest price, the customer also wants the highest value for money and these two things don’t always go hand in hand. So,  instead of wondering how you can quote the lowest price to win the work, start thinking about how you can deliver the highest value and charge what the treatment is really worth.

However, because value  is most often determined by the buyer, you need to get a lot closer to the customer to discover what value they are really looking for, before you present your price. Analyse what the customer’s main buying motives are, and use this knowledge to incorporate it into your treatment’s offering to increase the value.

Increase value by being better or different

There’s a fundamental rule in marketing that says that most people will pay a little more for a product or service – provided they perceive it to be “better or different” in some way.

Unless you can demonstrate that you are somehow better or different than your opposition, price will almost certainly be the deciding factor.

The very best way to demonstrate your point of difference is spell out all the benefits of what the client is getting for their money.

It’s a pretty safe bet that in most business situations, that customers ultimately want your product or service to help them save time or to save money.

Selling your services to your clients

When selling to your clients, begin by reminding them of their main objectives – in other words, the outcomes they want as a result of your products or and services.

In addition to the price, provide them with a supplementary information sheet that gives them much more detailed information about what you’ll be doing, how you’ll be doing it, and why you’ll be doing it.

In other words, outline each of the steps you are going to take and explain the  benefits of those steps, in terms of time and money, and how it will help them to achieve their goals.

At the same time, you could also suggest a couple of other alternatives they might not have thought of, but always guide the client by making your suggestion as to the most efficient or economical way of achieving their objectives and goals.

So is it worth all the effort?

Absolutely! You’ll find this process is almost guaranteed to elevate you to a position of a “trusted adviser”, instead of being like everyone else and competing for work on price alone, with absolutely no thought as to what the client is actually looking for.
 

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