ASHLEY: Welcome to Outgrowth: A Slice of Pro Beauty with your hosts Ashley Gregory Hackett.
JAIME: And Jaime Schrabeck. How much are you worth? That depends on who you are and who you ask. Are you an independent beauty pro asking your colleagues what they charge for similar work?
ASHLEY: Or a salon employee looking for a higher commission rate? It’s worth discussing why the answers vary. Let’s grow together.
JAIME: Ashley, we’ve waited far too long to have this conversation about charging your worth and what value we assign to ourselves as beauty professionals.
ASHLEY: It is a topic we had on our very original topic idea list for Outgrowth, and we’re finally able to explore this idea of worth, charging what you’re worth, and why that isn’t always great advice.
JAIME: It sounds good, right? It sounds motivational and empowering to tell people that they should be charging more. That they’re worth more, but when it comes right down to it, you need to actually assign a number. And I think that’s where people get hung up, but we need to have a larger conversation first, even before we get to that math that would be required to assigning a number.
ASHLEY: It’s a major hangup of our industry because using words like value and worth when you are ascribing them to yourself are emotional. They’re words that make you feel, like you said, empowered and excited, and unfortunately, it’s being applied to a concept that is completely objective and numbers based and math. to your point. So the divide between these things that make us feel empowered and worth everything and actually assigning a number to it is maybe the biggest disconnect in the professional beauty industry. What would you say, Jaime?
JAIME: Thanks for summarizing it like that because the fact that it is so subjective and emotional is where we get hung up every single time. It starts even before beauty school. And I think just throughout beauty school, you get pumped up to believe that your skills, your personality, the time and passion that you have somehow will translate to large incomes. I’m not sure why it’s not more clear when we look at
Statistics what it is actually that happens when someone works in this industry.
ASHLEY: Well, and unfortunately, an average is just that it’s an average. It takes into account everyone, those who are pulling down $500 an hour in their boutique salons, and those who are out of the industry after charging an amount that means that they couldn’t make a living. So when we actually start to ascribe value to ourselves, and we go to a beauty show, and we line up outside the door of a classroom telling us to charge our worth, it becomes difficult when you go to step two, which is, how? Then what? What does that mean? And very rarely have I heard that question answered.
JAIME: Oh, my goodness. I suppose the rough answer would be it’s whatever someone’s willing to pay.
ASHLEY: Of course, but again, how do you figure that out? And so it’s great to feel empowered and excited, and like, you’re going to take on the world when you walk out of that classroom, but then where’s the support after you’ve been told to charge your worth and now you’re just left to figure out what that is. This is a very different conversation than a service pricing conversation, which we are going to have in our business basic series very soon. But this is more about creating the conversation around taking the emotion away and understanding that that there is a number, like you said, that we have to create, and it’s a number that’s going to have to sustain our business, but also make sense for our market, make sense for the quality of our work, and there’s some pretty tough self-assessment that comes along with that process.
JAIME: That’s probably the most difficult thing is to acknowledge that what we do is not that unique. I mean who we are as an individual, that’s unique, but what we do is not. There are so many licensees. There are so many salons, so many different places clients can go to obtain a service that when we try to evaluate how we fit into the industry, how we fit into our community, it’s a challenge that’s more than just a numbers game. It really does get to the core of who you are and accepting where you are may not be where you end up. I mean, it’s, it’s this moment in time and there’s always opportunity to grow, to improve your skills, to improve your business. So again, it is just a moment in time, but at that moment, this is where the frustration comes, where students or very inexperienced professionals believe that they are worth as much as someone who has advanced skills, for example.
ASHLEY: Right, and that their services are worth the same. You raised some really good points there in the fact that it is a moment in time, and this is just a snapshot of where things are today. You know, charging your worth, I guess if we’re going to continue to use that very general advice, that’s an evolution. It’s a journey. It’s something that you’re not going to be able to do the moment you walk into your first salon, license in hand. We talk a lot about paying your dues in our industry, and while that can open the door to some seriously exploitative practices, like being an unpaid assistant for two years, or having to do 50 mannequin heads a month, or whatever that is. This conversation is more about what happens when you become maybe an independent beauty professional, or you start looking for jobs in salons and demanding commission numbers that are astronomical. And because we have these numbers placed in our heads by other members of our industry who may be much further on their journey than you, or, you know, you can only accept this amount as a commission and nothing else, you start limiting your options and taking away the ability to have that evolution because you’re beginning with the end in mind and completely forgetting about the middle, and in some cases, the beginning.
JAIME: Well, and at the beginning we have to distinguish what role you’re playing. Are you playing the role of business owner or are you working in someone else’s business?
ASHLEY: That’s a huge distinction because you’re not going to be able to influence service pricing and then therefore charging what you’re worth if you are an employee in a salon. And then that’s where people start to get their feelings hurt when their tips aren’t as high as they anticipate because the client hasn’t recognized the next great hair genius. And it becomes tough, and I think It becomes one of the determining factors if someone stays in our industry or leaves, and that’s really sad.
JAIME: Can you imagine an individual beauty pro or a salon having a pay-what-you-can model for its clients?
ASHLEY: I can’t, because we all know that clients would be cheap with several exceptions. But a pay-what-you-want model just doesn’t work for our industry because we have, we have overhead that is set. And a lot of us haven’t taken that into account when creating our service pricing. But also knowing what we bring to a business and setting ego aside, it’s very difficult to do.
JAIME: Agreed, and those costs don’t change when your doors are shut overnight or for the times that you’re not actually serving clients, nor would it for the salon owner. So again, this, this what are you worth conversation it’s so hard because we have different perspectives based on what our role is, and so many of us do change throughout our career. If we do start as an employee, we have different expectations than we would if we were the salon owner or someone who was hiring. I mean, talk about really needing to know what your numbers are. You would really need to know them if you were hiring someone, which is why we see a lot of pushback against salon owners who say it’s not practical to pay someone at 50% commission.
ASHLEY: I think the margins are a lot more thin than a lot of beauty professionals realize. And I’m not saying that every salon owner out there is charging accordingly or correctly for what their services cost and the margins that they need to make, therefore, tipping becomes a much bigger part of the conversation. But if you’re looking for 50% commission from a salon, you’re asking for a lot. And if what you’re bringing to the table is a license and a general knowledge, do you think that that’s worth 50% commission where you get half of the service in a building you don’t pay for, using electricity you don’t pay for, products you don’t pay for, and performing these services on a client that you didn’t bring in the door? There’s so much more, and I’m not saying the salon owner is always right. We know if you’ve listened to the back catalog of this podcast very frequently we mention how salon owners are getting it wrong. But this is one of the instances where I think a lot of beauty pros are the ones getting it wrong, and that’s when you start demanding 50, 60, 65% commission on a service that really anybody could do that has the same licensure.
JAIME: Making the analogy to retail, Ashley, can you imagine being paid 50% commission working for a store?
ASHLEY: No. I mean, my associates were making between 7 and 12% commission on sales in clothing and you would move up based on your performance as, you know, as, as most of us are familiar with a tiered commission model. That’s just how it works because there are so many costs figured in, and the margins fluctuate, obviously, based on what you’re selling. But the margins on hair services, nail services, lash services, they’re all pretty consistent unless you start thinking about the real estate and are they on Rodeo Drive or are you in a rural community? Like there’s so many other things to think about and consider that when you walk in the door and say, I want 50 or nothing, you might have a hard time finding a great situation for yourself.
JAIME: If we could take that step back and not think about what we’d be willing to pay, and we hear that a lot. Don’t shop with your client’s wallet or whatever those phrases are that indicate that what someone else is willing to pay for what you do is not the same as what you’d be willing to pay someone else to do it. There’s that issue of, are we trying to price to make ourselves affordable or are we trying to price or be compensated, I should say, in order to survive, to afford our cost of living?
ASHLEY: That’s a great question, and I think it’s one everybody has to figure out for themselves. We’re not doctors and we’re not lawyers. And while we did have additional schooling beyond high school in order to do our job, and we are licensed and regulated by our states, we have to go back to the fact that this is not something that requires an advanced degree. This is not something that requires residency or necessarily an apprenticeship. Like once you have your license in hand, you can work at any number of places. There’s no additional certification needed to be able to do our job. There may be additional training hoops you need to jump through to work for a specific salon. But then again, the choice is yours and it’s that choice that comes down to, are you going to be working in a high-end concept salon in Trump Tower, or will you be working for Cost Cutters? And it just depends on what it is you need to do to make a livable wage and how quickly you need to start to make that livable wage, right? Do you need it right out the gate or are you willing to do your apprenticeship and jump through all those additional training hoops? It’s not just what the market will bear, but it’s what your personal finances will bear.
JAIME: Understanding that if you were training, you’re being compensated for that training.
ASHLEY: Assuming that you are, because that’s what’s legal and correct, but we know having been alive in this world, that that’s not the case in a lot of places, which is really unfortunate because if you took out a loan to go to beauty school, they don’t defer that for you just because your employer’s misclassifying you.
JAIME: Oh, but if they would.
ASHLEY: This is such a larger conversation and I know that there’s going to be some hurt feelings out there. This has nothing to do with how you make your clients feel, or the creative side of our business, or the fact that you make people feel beautiful.
This is, that’s a separate conversation and nobody is casting any doubt on that. This is more about our expectations as beauty professionals and why it is we think we are worth a high commission rate or a high hourly rate, and how we’re backing that up.
JAIME: It’s definitely a separate conversation and we know that because our license itself is only about minimum competency. It is only about protecting the health and safety of our clients. It’s not about how fabulous your work is.
ASHLEY: If I walked into a nail salon in Chicago today, Jaime and I said, I’ve had covers of Nails Magazine. I’m fast. I’m efficient. I’m good with the clients. I can pump out a manicure in 15 minutes. I’m not going to make any more than somebody who maybe has been there for six months. A lot of that is really just what the business can afford to pay me. And so if I were to walk around with my nose in the air and say, well, how dare you? I’m going to be handing out my resume at a lot of places and not a lot of them are going to be calling me back because I just have unrealistic expectations of my worth in relation to what that business charges, how much they can pay me, right? And clients aren’t going to tip me any higher because I did their service three minutes faster than the last time. There, there’s a ceiling here that we have to talk about. And I think once a lot of people hit that ceiling in an employment situation, they start looking at greener pastures which is suite rental, being independent, booth rental, chair rental, thinking, okay, well. I’m going to have a bigger piece of the pie now, but unfortunately, a lot of that pie gets fed to overhead costs. And then you start to realize, hey, wait a minute. I did have it better as an employee making a 40% commission then having to be the person making all those decisions and being responsible for all of those costs.
JAIME: Ashley, where’s the ceiling when you’re independent?
ASHLEY: Here’s the thing, the ceiling doesn’t really exist because you could have additional certifications. You could offer something specialized. You could be in a major metropolitan area in a beautifully appointed space and charging higher prices. But with higher prices come additional costs. You know, if you have a super high-end salon experience you’re using better, more high-end, more exclusive products. Your space is more expensive. You’re providing amenities that still cost you money. So understanding that just because you’re independent doesn’t mean that you’re getting a larger chunk of that pie because now you’re paying all of your self-employment taxes, as opposed to just half as an employee. You’re paying all of the people that you need to bring on board, your accountant, your lawyer. I think that’s when the understanding starts, what salon owners are up against when you become an independent beauty pro and you start taking those costs on for yourself. And I know that there’s several listeners right now, nodding their head in agreement.
JAIME: What’s worse Is that the more ethical the salon owner, the more of those costs are acknowledged, the lower the compensation can be, right, in order to be viable. Any salon owner could promise 60% commission, but they’re going to do it by misclassifying you and cheating you out of your money that’s meant to be paid for your taxes.
ASHLEY: Right, and I would rather have a 10% lower commission than be stuck with a huge tax bill at the end of the year because my salon owner doesn’t know what they’re doing. Wouldn’t you? It becomes, there’s like a cost benefit analysis I think a lot of us aren’t doing that we just have this number in our head where it’s like, I will only accept this. But we don’t realize necessarily that there’s a lot that comes with it that we could just be creating a bigger problem for ourselves in the future. And so this, this rush to go independent, and want to set our own pricing, and whatever, there’s definitely validity to that, right? You could be just in a salon that is undercharging based on the market, and the products used, and the skill level of the technician or the stylist. That happens every day. So when you go independent, and you are able to do those things, and create the environment you want to create, it’s worth more to the client and you’re offering more value, yes, you can charge more. But just giving that blanket advice to someone and saying charge what you’re worth, then add tax, first of all, what does that mean? But secondly, it becomes a conversation and a decision that everybody has to make for themselves. And it just depends on your individual situation what your client, your market, will bear. And I personally would much rather do one client a day at $145 for a custom nail art manicure with Swarovski crystals, and all of those things then do 14 $20 manicures, but that’s just me. So again, another conversation we need to have with ourselves.
JAIME: When we’re having those conversations and we’re the ones responsible for pricing our services, we are, in essence, convincing our clients the reason why this service costs this much money to you as the client is because I’m doing it right.
And then on the flip side of that, that same conversation is happening among salon owners and their employees. I’m doing this right and that’s why I can only afford to pay X amount of dollars or X percentage of commission guaranteeing your minimum wage.
ASHLEY: Exactly. I have a question for you, Jaime. What do you think when you hear the phrase, charge what you’re worth?
JAIME: My mind immediately goes to a motivational talk.
JAIME: Which is what we got in beauty school. I mean, that’s about all we got in beauty school. There was not any discussion about how to price and the worst advice, and I know you’re going to elaborate on this I hear often, is just charge what other people are charging in your area.
JAIME: These aren’t real estate comps. This isn’t, this isn’t, you know, we’re not selling a building. We’re performing labor. That’s, that’s the issue that drives me crazy is that if we were just dealing with a product that we could sell, that we push through, a gadget, a gizmo, whatever, but because it’s our labor, and it’s our time, and that it’s so limited, and obviously valuable to us as it is to clients, it does complicate things greatly to have to factor that in.
ASHLEY: I think the saving grace or the part that really should make us feel better about this conversation is that it’s not unique to the beauty industry. This is a conversation happening in many service-based businesses where it seems like price is the only factor, you know, being competitive, being the lowest, being below bid on a job, being the one with, you know, listed triple a in the phone book, and doing all of those sorts of things to get clients’ eyes on you. I think really hits home when and if you are an independent beauty professional because you start to get that fear of what if I’m charging too much. What if I’m not going to get anybody to come to my salon suite so what I’ll do is just offer a discount for first-time clients. This is how Groupon, and Living Social, and other things like that we’re able to so easily prey on our industry because they really brought that fear to the forefront of not just, well, what if I’m not priced correctly, but now there are other places in your category and in your city that are charging 50% less to first-time clients. And if you’re not doing that, then you’re going to be completely dead. And it’s seeing things like that that really make me sad. And seeing that there are these parts of our industry that are being exploited, because everybody knows that everybody struggles with this, especially in beauty, when let’s face it, most of us are high school grads and we have never done the math. We’ve never gone through the exercise of figuring out what our costs are and what our prices should be, which is coming in a future episode I promise, nor to your point, were we taught that in beauty school. I was told in beauty school, never do Groupon, and just look at what everybody else is charging, and then charge similar to that so that way, you know, don’t be the highest, but don’t be the lowest.
JAIME: Okay. Goldilocks.
ASHLEY: Yeah, you know, just right. Be right in the middle because then people know that they’re not going to get a bare bones, minimum service, but then also that you’re not going to be so high priced that nobody’s ever going to book with you because you’ve scared them away. There’s so much anxiety around pricing services and where you stand in that. Are you in the middle? Are you towards the top? And there’s just as much anxiety on the client side of things because our pricing as an industry is really opaque and it’s not clear to clients either. They have this anxiety like, oh, the first time I go and get my hair done, how much is it going to be? Are they going to add on a bunch of things or what if they start selling me retail and I’m not prepared to pay an extra $150 for additional treatments and products? And so I guess if the first step to this whole thing is just acknowledging that there’s that anxiety, but then knowing that if you’re going to walk into a place fresh out of beauty school and say, I deserve 60% commission. I mean you better be doing work that is unheard of amazing, and far and away beyond what someone else coming out of your beauty school is doing, or even somebody who’s just coming to your salon from a different location. I think that’s also why we salon hop, don’t you? Like just greener pastures, trying to get the biggest chunk possible?
JAIME: The biggest chunk and then the most drama-free location.
ASHLEY: Oh, well, of course, you know, drama-free. But like I’ve said in previous episodes, I am never going to begrudge a beauty professional for wanting to get paid. That is why we’re in this business. This is not our expensive hobby. I just think that there can also potentially be this overinflated sense of what we do, because it is a creative industry, because we are artists, and because we do make people feel so good. But really you can only charge what people are willing to pay and that’s the long and the short of it. If you found clients that are willing to pay a premium, amazing. Good for you. Keep that going. But then where do you go from there?
JAIME: Ashley, let’s talk more about the lack of transparency. You mentioned other industries earlier. Think of other industries that would be, I would say, roughly classified with ours in terms of educational level and that sort of thing. Many of those industries, vocational, as they are, would quote a price to a client of parts versus labor.
JAIME: And you’d know how much you were paying for the products that go into the work and then you’d know how much the work was being valued by time, which is not something that we do so much in our industry. Although there is this newer trend and I wanted to touch on this because I’m not quite sure what it means or how it’s being justified, but this idea of charging by the hour versus a fixed service price. I don’t think I quite understand if in fact you’re doing your pricing correctly and have already built in the time that it costs into your pricing. I’m completely confused. I don’t know if you know any more about this than I do.
ASHLEY: You know, I think those who are really pushing this, this pricing per hour model are the ones who have done the math to figure out what their operating costs are per hour, or per day, or per minute, and they are advising others to start charging per hour as a way to guard against creating service pricing that means they lose money. Because I think it’s, it’s honestly like almost like a worksheet that forces you into charging the correct amount because a lot of people have not done the math, which is one of our favorite phrases, but also haven’t looked at how much time it takes them to do things. And I know, Jaime, you like to bring up the example of massage therapists making a dollar a minute at a minimum when their product cost is so much lower than any other part of the beauty and wellness industry. So if people are willing to pay that, they should be willing to pay that for other beauty services.
JAIME: Well, let me ask this. Is that those product costs, are they being factored in by different rates by the type of service? So, if for example, you’re a hair professional who does cuts and color, your rate for color is going to be a higher rate per hour because what? it takes more skill, and it requires more product, and you might have a different rate for your cuts. I just, to me, it just complicates things.
ASHLEY: I don’t think so. I honestly think, and correct me on Instagram if I’m wrong, but I believe it is a blanket amount per hour regardless of the service type. Because a haircut would traditionally take less time than a full balayage with a shadow root and all of the other things, then yes, that would be the same amount per hour, but because the other color service is taking longer. I believe the product is factored into the cost of everything and divided by eight or however many hours a day you work. I know that there are additional surcharges for things like, maybe like for hair, if you’re a hair extension artist and you’re charging by the hour. We’d have to sit down with someone who is well-versed in this hourly pricing model. I don’t necessarily think it’s that confusing as much as it’s just another way of looking at doing the math correctly and ensuring that you are charging enough to make what you need to to keep the doors open every hour and the margin that you need in order to pay your bills and have a livable wage. So I don’t know if that’s necessarily all that revolutionary and new. I think it’s just a very slightly different paradigm to help people in our industry come up with the correct service pricing without having to actually do the spreadsheet and figure out all of these other costs. It’s just an easier way to get to the same place.
JAIME: Thanks for bringing up extensions because that’s probably the closest we get as an industry to parts and labor.
ASHLEY: Yes, and if we were charging the parts and labor model, our clients would absolutely freak out at how little the parts cost. But then you have to look at wear and tear. This is an industry, a lot of us, our bodies cannot be in forever because our shoulders, our elbows, our wrists, our feet, whatever it is, they start to break down just by virtue of this job. So while I think that there’s more research to be done on our end as far as this hourly pricing model, I think it is a step in the right direction to helping people charge not necessarily what they’re worth, quote unquote, but what they need to to stay in business, and survive, and thrive, and do all the things that our favorite platform artists are telling us to do, or business coaches are saying. So no matter what, that’s still a number. You still have to come up with a number per hour. So again, being told you’re amazing. You’re perfect. You’re a model. You’re Linda Evangelista. And then coming up with a number to charge, there’s still a process there, and whether it’s you’re charging by the hour, or you’re charging by the service, you still have to do some math, I’m sorry to say.
JAIME: Well, and let me dismiss the parts and labor model out of hand right away. That parts and labor model only works when you’re ordering the parts for that particular service, which is what ends up happening with extensions, right, whether you have the client buy the extensions, or you order them specifically for that client, The difference that we have as beauty professionals is we’re maintaining inventory. We’re maintaining inventory of color, whether it’s hair color, nail color, skincare, makeup, different types of products for different types of skin types. We are maintaining inventory and I don’t mean our retail inventory. I mean, backbar.
ASHLEY: Right, right. Yeah. Just the cost of doing business in our industry, you have to maintain that inventory and that can be a huge upfront cost or that can be a large cost to maintain weekly. I think once you get down to it and the high of being told to charge what you’re worth and then add tax wears off and you actually have coming up with numbers for that, that’s where we come in because you’re not going to get of touchy, feely, warm, fuzzy, motivational speech from us as much as you were going to say, look, that’s great. Definitely charge what you’re worth, but here’s how you actually get to that number.
JAIME: We’ll get to that much sooner rather than later, Ashley. I, I am really excited to have those conversations because I am in the process of actually doing that work myself to reevaluate what we’re doing, given that we’re doing things a bit differently coming through COVID.
ASHLEY: Definitely. I’m excited to see what changes you’re making and what that means for your bottom line. And I would encourage everybody listening to visit our show notes where we will have several resources available to you for service pricing, as well as previous episodes where we’ve discussed similar topics in our back catalog. But, in the meantime, let us know your thoughts on service pricing, being told to charge what you’re worth, and stay tuned for our business basics service pricing episode is coming very soon. It’s going to be a doozy.
JAIME: It’ll be longer than most, perhaps.
ASHLEY: Yes, it might be a two-parter. All right. Well, if you’re enjoying Outgrowth, please leave us a review on Apple Podcasts with one click. Just visit bit.ly/outgrowthpodcast.
JAIME: As always, you can follow us in comment on recent episodes on Instagram at @outgrowthpodcast.
ASHLEY: All right. Well, we maintain our podcast is free, so we are charging probably what we’re worth. We’d love to know what you think about that. Feel free to leave us a review, as we said, and connect with us on Instagram. And until next week, everybody, be smart.
JAIME: Be safe.