Pricing Your Salon Services: A Practical Guide
How to set prices that cover costs, reward skill, and keep clients coming back
In this guide
Pricing is one of the most important decisions a salon owner makes, yet many approach it with surprising casualness. "What does the salon down the road charge?" is a common starting point—but it's not a strategy.
Effective pricing covers your costs, reflects your skill level, positions you appropriately in the market, and leaves clients feeling they received fair value. Getting this wrong in either direction hurts: too low and you're working hard for poor returns; too high without justification and clients go elsewhere.
This guide walks through pricing systematically—from understanding your costs to positioning in your market to handling the inevitable price increases.
The pricing fundamentals
Before diving into specific pricing decisions, understand what prices need to accomplish. Every service price needs to cover three things:
- 1Direct costs: Products used, disposables consumed, any materials specific to that service
- 2Time costs: The portion of wages, rent, utilities, and other overheads allocated to the time that service takes
- 3Margin: The profit that makes running the business worthwhile
A common mistake is pricing based only on product costs, ignoring the time component entirely. A colour service using $30 of product isn't profitable at $50 if it takes 2 hours of a chair that costs you $40/hour in overhead.
The value equation
Clients judge value based on their perception, not your costs. A 30-minute service that delivers dramatic visible results might support a higher price than a 90-minute service with subtle outcomes.
This doesn't mean costs are irrelevant—but it means two services with identical costs might warrant different prices based on what clients value.
Calculating your actual costs
Many salon owners haven't calculated their true costs per service. This makes profitable pricing guesswork rather than strategy.
Product costs
For each service, estimate the products consumed:
- •Colour, toner, developer (track usage over time for accuracy)
- •Treatments, masks, styling products applied
- •Disposables: capes, neck strips, gloves, foils
- •Towels (factor in laundry costs)
Precision matters less than having a reasonable estimate. A colour service that uses "somewhere between $15 and $25 of product" is better information than no idea at all.
Time and overhead costs
Your fixed costs continue whether you're serving clients or not: rent, insurance, software, utilities, loan repayments. These need to be covered by your services.
Calculate your hourly overhead cost:
- 1Add up all monthly fixed costs
- 2Estimate total billable hours per month (across all chairs/staff)
- 3Divide fixed costs by billable hours
Example calculation
Monthly fixed costs: $8,000. Total billable hours (2 stylists, 160 hours each): 320 hours. Overhead per hour: $25. A 2-hour service therefore carries $50 in overhead costs, regardless of products used.
Labour costs
If you employ staff, their wages are a service cost. If you're the owner-operator, decide what your time is worth—even if you're not formally paying yourself.
Do this cost calculation once and review it annually. Costs change over time, and prices that were profitable last year might not be now.
Competitive positioning
Your prices communicate your market position. Clients make assumptions based on price before they experience your service.
Understanding your market
Research what other salons in your area charge for comparable services. Not to copy them, but to understand the range:
- •What do budget options charge?
- •What's the mid-market range?
- •What do premium salons charge?
- •Where do you want to position yourself?
Your position should reflect your offering. A premium-positioned salon needs to deliver a premium experience—décor, service quality, attention to detail. You can't charge premium prices in a dated space with average service.
The dangers of being cheapest
Competing on price attracts price-sensitive clients who'll leave for the next discount. It's also a race to the bottom—if you lower prices, competitors might too, leaving everyone worse off.
Being the cheapest also signals something about quality. Clients wonder why you're so much less—what's the catch? The goal is fair value, not lowest price.
Justifying premium pricing
Higher prices require justification that clients can perceive:
- •Superior skill and results (demonstrated through work quality)
- •Better products (that clients can feel the difference)
- •Enhanced experience (ambience, service touches, attention)
- •Convenience (location, hours, booking ease)
- •Specialisation (expertise in specific techniques or hair types)
If you can't articulate why you're worth more, clients won't perceive it either.
Pricing tiers and experience levels
Different team members bring different skill levels. Pricing tiers let you charge appropriately whilst giving clients choice.
How tier systems work
A typical structure might include:
- •Junior: Recently qualified, still building experience
- •Senior: Experienced stylist with proven skills
- •Master/Director: Highly experienced, often the owner or top performers
Each tier has different prices for the same services. A women's cut might be $65 with a Junior, $85 with a Senior, and $105 with a Master stylist.
Benefits of tiered pricing
- •Entry-level option for price-conscious clients
- •Experienced stylists rewarded for their skill
- •Career progression path for team members
- •Clients choose the level that suits their needs
Setting the differentials
The gap between tiers should reflect genuine skill differences. Too small, and there's no incentive for clients to book seniors. Too large, and juniors appear bargain-basement.
A common approach is 15-25% between adjacent tiers. If Senior pricing is your baseline, Junior might be 20% less and Master 20% more.
Junior quality matters
Your Junior tier still represents your salon. Clients who have bad experiences with juniors rarely return to try a senior—they just leave. Ensure every tier delivers quality appropriate to their level.
When and how to raise prices
Costs increase over time: products, rent, wages, utilities. If prices don't keep pace, margins shrink. Yet many salon owners avoid price increases for years, fearing client backlash.
When to increase
- •Your costs have increased materially
- •Your skills have improved (additional training, certifications)
- •Market rates have shifted upward
- •You're fully booked and turning away clients
- •It's been more than 18-24 months since your last increase
Regular, smaller increases are better than infrequent large jumps. A 5% increase annually feels gradual; waiting five years then increasing 25% feels shocking.
How to implement
- 1Decide on the new prices and effective date
- 2Give clients notice (2-4 weeks is typical)
- 3Update all price displays (in-salon, online, booking system)
- 4Train team to address questions confidently
Communicate matter-of-factly. You don't need to apologise or justify extensively. A simple "Our prices will be updating from [date] to reflect current costs" is sufficient.
Managing pushback
Some clients will comment or push back. Most accept increases gracefully, especially if your service justifies the price. For those who don't:
Listen to concerns without getting defensive. Acknowledge the increase whilst being confident in your value. If a client truly can't afford your new prices, you can suggest alternatives (junior stylists, less frequent visits) without discounting.
The clients most likely to complain about small increases are often not your most valuable clients. Don't let a vocal minority prevent you from running a sustainable business.
Packages and bundling
Bundling multiple services into packages can increase average transaction value whilst offering clients perceived savings.
Why bundles work
- •Clients perceive value in package discounts
- •Higher total spend per visit
- •Simplified decision-making for clients
- •Introduces clients to services they might not try separately
Designing effective packages
Good packages combine services that genuinely work well together:
- •Cut + Colour: Natural pairing for comprehensive service
- •Colour + Treatment: Treatment improves colour results and hair health
- •Facial + Massage: Relaxation services that complement each other
- •Bridal packages: Multiple services for special occasions
The discount should be meaningful enough to influence behaviour but not so deep that you're giving away margin unnecessarily. 10-15% off the combined Ă la carte price is typical.
Avoiding the discount trap
Packages should encourage upselling, not provide discounts on services clients would have booked anyway. If someone always books a cut and colour, packaging them together just reduces your revenue.
Structure packages to include services that clients might not have added independently. The goal is higher total spend despite the discount, not the same spend at lower prices.
Seasonal and promotional packages
Limited-time packages can drive bookings during slow periods without permanent price reductions. A "Winter Pamper Package" available only in June-July fills quiet times without training clients to expect discounts year-round.
Key takeaways
- ✓Prices must cover product costs, time/overhead costs, and margin—ignoring any of these leads to unsustainable pricing
- âś“Calculate your actual costs before setting prices; many salons don't know their true costs per service
- ✓Competitive positioning matters—your prices communicate your market position
- âś“Pricing tiers let you serve different client segments whilst rewarding experience
- âś“Regular small price increases are better than infrequent large jumps; don't let costs outpace prices
- âś“Packages should increase total spend, not just discount services clients would buy anyway
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Last updated: 2026-01-30