121: How to Price Your Esthetician Services Without Losing Clients

In this episode of The Esthetician Podcast, Kari Jo sits down with pricing expert Nina Tulio to talk about how estheticians should price their services, raise prices confidently, and stop giving away treatments for free. They break down price-per-minute, undercharging, discounts, add-ons, Groupon, deposits, and how to build a profitable esthetician business without losing clients. If you’ve ever felt booked but not profitable, this esthetician podcast episode will help you understand your numbers, make more money, and stop guessing what to charge.

You can find Nina Tulio here: https://www.instagram.com/ninatulio?igsh=MThhNmNmYzdpanc4aQ==

If you’re booked but not making money, you need to start with your numbers.
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Transcript

Quick Testimonial And Welcome

Phe 0:00

Working with Kari Jo Patterson has been such a game changer for me as a soloist edition. As someone that doesn't work under anyone, she helps me keep myself accountable with our one-on-one calls. She's put things in perspective for me as far as what I'm trying to do in my business. She helped me put into words what I'm trying to do. And she also keeps me accountable with our one-on-one calls. Every time I we implement something in my business, I'm like, I have to do it because I'm going to have a call with her next month. So it really keeps me accountable. And she's just so sweet. She's loving and she has so much information. And I can ask her anything. She's always available for me to message and she doesn't make me feel bad about it. And yeah, I just love working with her. She has just been such a blessing in my business.

Why Pricing Feels So Hard

Kari Jo 0:50

Welcome back to the Esthetician Podcast. So today we are going to talk about something that honestly stresses so many of you guys out, which is pricing. What should you charge? How do you know if you're undercharging? How do you know if you need to raise your prices? And how do you raise your prices without feeling sick in the stomach? Like you're going to lose clients. Today I have brought on someone who specializes in just this. Nina has helped so many beauty professionals understand their numbers, price, and services correctly. And honestly, this conversation is going to help some of you realize that you're probably giving away way more than you think you are. So, Nina, thank you so much for coming on today. I've been following you for a long time on Instagram and you are all about pricing. I feel like aestheticians are constantly unsure about what they should charge. Why do you think that people in our industry feel so uncomfortable about what to charge?

Nina Tulio 1:52

I mean, I think anything that has to do with money just makes people uncomfortable, not just only in our business, but it just makes people uncomfortable. And I think, you know, when we go to school, there isn't a business class and we're not talking about finance and we're not talking about um, and maybe things have shifted and changed over the last few years, but that wasn't necessarily a part of the curriculum. And so when you get out into the workforce and in an industry where it's all about care and taking care of other people, a lot of times we're unclear about what pricing should be. And then we put the care side of it so heavily, like we have to care for them, we have to love them, we have to take care of them. We put ourselves on the back burner. And part of that is we lower our price, or we don't charge full price, or we don't charge what we should. And so I think it goes, I mean, this has been, I've been in the industry almost, well, 28, 28 years, and I've we've been having these conversations back then, you know. So it's ongoing for sure, but we've gotten a lot better.

Kari Jo 2:58

And I think that is like when people are unsure, they do start like lowering their prices or they're just throwing random things at the wall.

Nina Tulio 3:07

Sure.

Kari Jo 3:08

So when someone asks, what

Build Prices From Budget Data

Kari Jo 3:10

should I be charging? Where should they start?

Nina Tulio 3:13

Well, there's a I have a whole system when it comes to pricing services. And the first thing that we have to understand before we price services is your budget. So I have a whole pricing calculator system. It's three parts. And we don't just dive in and say, okay, well, this person down the street is charging this, this person's charging that, this kind of feels good. People on Facebook think this sounds great. So I'll do that. Like we move all of that to the side and we focus on the budget first. So what your rent percentage is, what your um, if you have, you know, people in your team, your payroll percentage, what your back bar percentage is, everything is allocated properly. And once we know that, then we focus on a few other things. So five factors of pricing: target profit, total hours worked, your uh total business expenses, product, you know. So there's a few things, and of course, we have to know our market. We have to know what our market value is. We have to do some research and understand what other people are charging. It just doesn't mean we're going to charge what they charge, but we have to be aware. So when we take into five in those five factors and then we plug everything into calculators, you can see, okay, wait a minute. This is what I'm spending. These are all of my expenses. This is my target profit, right? This is how many hours I'm working, this is what I'm spending on product. You know, then you can look and see, okay, because my calculator will actually spit out a price per minute, price per hour for you. Baseline. So what your baseline is, meaning what your what your services should be now. And then target is what we're actually shooting for based on total revenue growth. So there is a system to it. I wish I could just say, go tweak this one thing and you're gonna understand how to price services. But if you want to price them properly, we have to do it based on facts and data and not on feelings. And if you want to do something and just kind of comparatively look inside your business, this is homework you can do right now. I'm just gonna give you the calculation for price per minute, because then you can start to look at some of your services and say, okay, this service takes more time, takes more product, is more labor intensive. Why is the price per minute lower on that service than it is comparatively to the other services? So this is something you can do in your business right now. The calculation is super simple. It's the price of the service divided by the minutes of the service. So price of service divided by minutes of service. Do this for all of your services. And then you can look and see are some of my services that take more time, more product, more labor-intensive less in price per minute than the others? And those may be some services that you need to increase.

Kari Jo 6:01

That's so good because I've always used price per minute to decide what to market. But I love that you're also using it to spot what's underpriced because you're if you do it the other way, you're just gonna pick the service that you're making the most on, but it's not maybe something that you love. But if you actually weigh it out and you find the service that you love, what should you actually be charging for that to make it worth it?

Nina Tulio 6:25

Right. And and understanding all of your prices. Like we don't want to just look at the one service and say, this is my hero service. So this is what I'm gonna, and it's great to market that for sure. But what if some of your other second, third choices that you do a lot of, maybe those are underpriced and you don't know that? So once you get in and type everything into my calculators, because people DM me all the time and they're like, help me price my services. I can't until you plug all of your data into my calculators. That's when we get actual data and facts. It doesn't matter where you live, how big or small your town is, you know, rent percentages, all of these things that are going to be going into this that, you know, the rent will dictate your area and where you're at in your demographic. So I think, you know, one of the things I see a lot is, and I see this on social media, is people want to price their services based on what they want to make. So maybe let's just say, and using this as an example, right now they're making $100,000 a year, they're like, well, in six months, I want to make $200,000 a year, which could it happen? Sure. But the likelihood of that kind of significant growth is, you know, yeah, smaller. And they price it based on $200,000 a year, and their market can't handle that. Yeah. Their market can't handle that type of price per minute, price per hour. And so their maybe their hourly rate needs to go from $100 an hour to $175 an hour. Well, that may not make sense for their market or make sense for the type of client experience that they're delivering. So we want to nix that, and we're not, we can't price services based on that.

unknown 8:02

Yeah.

Nina Tulio 8:03

Just on what you want to make. There are so many more factors that go into it.

Kari Jo 8:07

Yeah. So what would you say to like the aesthetician that's like, okay, they go in and they do the numbers, and let's say that they have to raise their price, and then, but when they originally started, they based it off of their competitors. And so now they're coming back, and their numbers are like, I gotta charge more than what my competitor is, you know, and I don't have a bunch of clients. What would you say to those aestheticians?

Nina Tulio 8:38

Well, I mean, it's hard to it's hard to have price increases sometimes. And now we have to take into consideration how much of a jump are we going to take. I actually have a free resource that people can download, literally, and you probably have seen this on my Instagram, but you can download my free pricing upgrade and it will show you, it's something I extracted, extracted from my course. It will show you based on this, this, and this criteria, how much you should raise your prices. So if we are going from, let's just say, $65 on a service to $95 on a service, that may push you beyond your competitors. You better back that up with

Use Price Per Minute Audit

Nina Tulio 9:20

some value big time because people are paying for value. Also, $30, that's a big jump in one sitting. No matter if you're a hairstylist, aesthetician. I mean, anyone in the beauty industry, that is a big jump for someone to swallow in one sitting. So we typically will break that up. Let's just say that we go through the calculator and it's like, okay, well, you're at 65, you need to be at 95. Well, we're gonna do one increase that would be $15 now, and then maybe next year we'll revisit that based on demand, and we may have the other 15. But new clients, you could start charging them that right away. You know, maybe it is $95 that you should be charging. Your new clients can start paying that price. It's just catching up the other people and doing it in a way that makes sense and doesn't, you know, clear your book because you decided to have this $30 bump. And look, with competitors, and maybe it's pushing you above where other people are, you have to always back it up with value. And it isn't like just the snacks and drinks anymore. Like we're moving well beyond just having snacks and drinks in a business. Like that's like a given, you know, it really is the total client experience, and that starts before they even enter into your doors.

Kari Jo 10:33

Yeah. So going off of this, this is something that I see and I hear so much. So I would really love to hear your take on it. Like us aestheticians, what we're doing is we're being like, okay, I'm going to have them come in and I'm going to charge them for a facial. And then I'm just going to do whatever needs to be done in that facial. So, like, if she needs LED, I'm going to throw on the LED on if she needs a little bit of appeal, I'm going to throw it on. And it's just like one price, and I do whatever is needed in that moment. Have you ever heard of that, like, people, that mindset? Have you heard of people doing that? And do you have a take on that?

Nina Tulio 11:13

So they're already priced, or are they priced in packages? So the it's or am I showing up? I am a I am a facial girly. So I love to get my facials done and I love my I love my girl. So, or are you saying I show up? It's $65. Let's just use that price. And then all of a sudden you're like, look at my skin, you're like, oh my God, she needs LED, she needs, you know, dermaplane, all of that. And you just add it on and don't tell me that it's extra.

Kari Jo 11:40

Yeah, well, I think what they're doing is they're just adding it on, but they're not like charging an add-on price. And they're just like, oh, I'm just gonna charge one price, and then I'll do whatever is needed in that question instead of individually charging, like, okay, I'm charging for the facial, and then I'm gonna charge for the LED light on top of it. Have you heard of that?

Nina Tulio 12:03

Like, yes, I think well, it kind of reminds me of hourly pricing in a sense. I I coach and teach to package pricing, but you'll always have an hourly rate. And no shade on hourly pricing. If it works good for you, that's amazing. It's you know, whatever works best for your business. But with hourly pricing, let's just say that if we have one price, say it's a hundred bucks, and you just start throwing in extra things, your time is gonna change. You know, the timing on that service is gonna change, the amount of product that you're using on that service is gonna change, all of that stuff needs to be accounted for. And if you're not charging the client, then you're paying for it, which means you're paying for it out of your pocket and out of your profit. So if you want it to be all inclusive, which is what I do with package pricing, we wrap it in and make sure that it's being charged for.

Kari Jo 12:49

Yes. I yes, I love that because that is where I see so many estheticians going wrong is they're just throwing it on, but they aren't taking into consideration exactly what you're saying. But having like a packaged deal makes a lot more sense than what what they're currently doing. What else are you seeing that is going on in the industry with pricing that you're that's like, oh my gosh, that really bothers me. I wish we could fix that.

Nina Tulio 13:18

Well, I mean, it's just the undercharging, it's the not charging, you know, it is it is throwing things in for free. It is not taking into consideration that it's gonna cost you, cost you and take you more time and more product to do these things and you're not charging for them. So you end up eating it. And that's why, you know, there are people in the beauty industry that really struggle making a profit. And it's because, and then they have to work 50, 60 hours a week just to make up for that number because they're just throwing money away by giving services away for free, or they're just undercharging, period. People not raising prices in the last two, three, four years.

Plan Smart Price Increases

Nina Tulio 13:55

Look how much our costs have climbed over the last two, three, four years. Imagine you keep charging what you charged in 2020 and you're charging that now. It just means that your profit margin gets smaller and smaller and smaller. And we really have to start thinking about this as a true business. And clients understand that costs have gone up. Everybody's feeling the impact of that. And if you keep your prices the same, they're gonna stay, right? Because it's, you know, it's more affordable for them. But if they go somewhere else, they're gonna have to pay more anyway. Because most likely these other beauty industry, beauty businesses have raised their prices to keep up with the growing cost. So I would say it's those things, the undercharging, you know, not increasing, um, and also just basing service prices off of what you want to make. We just can't do because it's like, hey, I want to make X. Well, is that realistic? Can we do that? And can we charge that? And can our market handle it?

Kari Jo 14:54

Yeah, I do see that all the time with wanting to like make a certain amount, but like realistically, if you look at what the realistic payment that estheticians make or hairstylists make, like what is the average, you know? And I know for us aestheticians in particular, the average across America is about $40,000 a year, is what the average esthetician is bringing out. Now, can you make more? Sure. If you press correctly and you do exactly what you're saying, you can figure that out. How do you go about um because we talked about you talked about discounting, and I do think that that is a really big thing. And how do we discount without devaluing our services?

Nina Tulio 15:39

I don't think we have to discount.

Kari Jo 15:41

Okay.

Nina Tulio 15:41

I think we're focusing on the wrong thing. I think we're focusing on the discount when we should be focusing on the value add. People are paying for results. We focus on how we're going to give them those results, plus an amazing amount of value, they're not going to worry about the price. They're focusing on the price because we're focusing on the price. Like we're thinking about the price. Oh my God, are they going to like it? Are they going to pay? What are we going to do? It's going to be too much, right? When I've and I've lived in this because I'm a former, you know, commission salon owner, so I get it. But if we focus on the value, what we're delivering, how we're delivering, how consistent it is, how the results are being delivered, and how we're communicating this with our client, most likely they're going to be okay with the price, you know? And sure, will you get someone maybe that it's not in their budget? Yes. And that's okay. We get that. But I think we have to really take our focus away from always focusing on, oh my God, are they going to like? Is it going to work? Is it going to make sense for them? Well, what about is it going to make sense for me? Am I going to be able to live and pay my bills if I don't have these price increases and I don't charge what I should be charging? Now, are there certain cases where people are charging X and the value doesn't align? So they're losing clients? Sure. So if you're going to charge $200 for a service, someone better walk out feeling like they received $200 plus in value. And if they do, they're cool. They're like, hey, it's great. It was worth $200. Hey, it was worth $250. You know? Yes.

Kari Jo 17:14

I love your spin on that. Instead of discounting, let's just focus on adding value to it. That's a much stronger way to look at it. Because I think that is, especially like with all the there's so many people that are like, I want to charge more. Right. And in order to charge more, like you're saying, you've got to create that value where they feel like it. When you are creating the value, what different ways have you found is important or like things that you should be doing that actually increases value?

Nina Tulio 17:49

Well, I think first of all, it starts with booking. You know, they're booking, how they're booking their service, like it already starts before they get in the door. So is the booking seamless? Is it easy? Is it convenient? You know, does it make sense for the brand and business? Do they have to go over the river and through the woods to find your booking link to book with you? Right. Is it confusing? So that's one. Then the menu. You know, when they get on your booking site, what does your menu look like? Is it like a CBS receipt? Is it 18 pages? Do we have any clarification? Do we have it broken into categories? I teach a lot about menu, you know, making sure that there are blurbs and things that showcase that are client-facing so they understand. Because clients don't they don't speak our language, you know. So we have to, we have to make sure that they understand what they're actually booking and receiving. And um, you know, I think that there's a lot that goes into it then when they come in and how they're received. And is there an intake form? You know, are you doing specialty things like, you know, for us it's hot towels, essential oils? There's a like gravity blankets, there's a lot of things, and you know, my clients are doing all of this stuff too, and they they have great ideas when it comes to all of this. But of course, it's like, how can we enhance the service period? And then aside from being there and receiving all of this goodness, what happens when they leave?

Stop Free Add-Ons With Packages

Nina Tulio 19:05

Are they being is there a follow-up? Are they being checked on? You know, is there a feedback form in a way that they can give you feedback? And if they're having an issue and they're not happy, can they respond and chat with you? So it's well before they come in and also well after they leave.

Kari Jo 19:21

Okay. What do you say to those um estheticians and stylists when they do decide to do the price increase? And they're like, okay, I've fixed the value, I want to do the price increase, but then they get like, oh my gosh, what if I start losing clients? What do you say to them?

Nina Tulio 19:43

Well, I think you know, it's hard, right? Because you get nervous, you you beef it up, you're so excited, you have all your ducks in a row. And then if you're gonna send out a text, let's say you want to analysis and you're gonna send out an email, not a text, and you're like, oh, should I do it? Should I not? You know, I think always thinking about how valuable you are and the value that you're providing to the client is key. And is it gonna be nerve-wracking? Yes. Are you gonna lose a client or two? Sure, that happens. And here's the thing newsflash, you're not meant to keep every single client that sits in your chair or lays on your table. Like that is just not the vibe. And so I think when we start to understand that I'm doing this and this is a business decision, this is not a personal decision, and I'm doing this so I can keep my doors open and I can feed my family and I can feed myself. And I'm going to elevate the client experience and make sure I add value, it does make it easier. Um, and honestly, I've been doing this for so long, I have yet to see someone lose a half a book due to a price increase. You know what I mean? You're gonna lose a few, and that's okay. And it just maybe doesn't align with their budget and no problem. And maybe we can refer them out to someone else that we trust. But those three people, you can fill in with new clients with new pricing, you know, so you can end up making more money that way. But if you stay still, you're gonna stay stuck, and that's a scary place to be in business. And I've I've been there myself, so I can speak from experience.

Kari Jo 21:12

Another pricing piece that estheticians struggle with is deposits. When do they make sense and when can they hurt the booking process?

Nina Tulio 21:23

So I think deposits work in certain situations. You know, I have had clients that come to me or salon owners and say, Hey, I'm thinking about doing deposits on all of my services. And I'm like, you got to be ready because that could gatekeep clients from coming into your business. Um, now, are there instances where deposits need to happen? Yes, of course. Especially when you're doing big ticket services or, you know, you should have a credit card on file anyway when they're booking, just in case for you know, for uh cancellations and things like that. But I think when it comes to bigger services, deposits make sense. But I think if we go deposit crazy, you could also be keeping clients out of your doors. Now, if you have a good cancellation policy and you have a good no-show policy, then that will step in, you know, and then you have a credit card on file. So that really helps kind of limit that. Um, but I think there's a time and a place for deposits for sure. But I think doing it for all services can be a little bit tricky.

Kari Jo 22:24

Yes, I agree with that. For the no-show, do you do you have a a way of how you like to choose what you're going to charge the guest if they no-show? Like, how do you run that?

Nina Tulio 22:38

It depends. You know, I there's

Value Add Over Discounting

Nina Tulio 22:40

different ways that we can do it. Sometimes it's a flat rate, sometimes it's a percentage of the service. It really depends on what feels good for the person that I'm working with. And I do work with a lot of independent artists as well. Um, and it depends on the business, it depends on the amount of service, it depends on the average ticket. There's a lot of variables and things that we need to think about, but it's either going to be a percentage or a flat rate of the services, which makes it a little bit easier for the client as well.

Kari Jo 23:07

Okay. One other question that I see so often is about group on. What is your thoughts about group on? And are you for it or against it? What are your thoughts?

Nina Tulio 23:23

I think groupon works well for certain people, and certain people it doesn't. It's just like any form of marketing. You know, I feel like any any in anything that you're doing in your business, ask yourself, what is the greater goal? What am I trying to accomplish out of here? What is the outcome I'm looking for? And is this could be group on, it could be something else. It could be a magazine, it could be anything. Is this going to get me to my goal? Am I going to attract the right clients? Am I going to have better retention? You know, so no shade on Groupon. I know people who use it and it works well for their business. I also know people who use it and it doesn't work. So I think you have to ask yourself and not make quick decisions by listening to what everybody else is saying. Look within the four walls of your business and really stay aligned to your own core values and mission in your business and make decisions based on that. Really, all that I can say, because I'm some people works, it works, and some people it doesn't, but it really depends on your business and your outcome. What are you looking to gain by using this specific channel to get new clients in the door? Always ask yourself that when you make some sort of marketing decision or any decision in that matter.

Kari Jo 24:36

I love that so much because um I think so many times we are looking at what other people are doing. But like you said, when you were thinking of like group on, like, does it attract the type of clients, like who's using group on? And is that your type of client? And if it is, then do it. But what I hear so much from like what you are saying today is you really just need to focus on you and know your numbers and know what it is that you want.

Nina Tulio 25:03

And yes, and know your business. Yeah, like that's it. Like you, you know, if you think that you're gonna gain insight of your business on Instagram, you're not. You have to know who you are, what you stand for, what your brand vision is, what your brand voice is, what your mission is, and what your values are, and that's how you make decisions. And when you do that, you're not you're never unclear. You know, I can see 15 million things going on on Instagram, even with my own business right now, but I'm so focused on who I am and what I'm trying to accomplish and help serve other people that I'm not bothered by what's going on because I stay in my lane. I'm here to serve, I'm here to support, I'm here to help. And I have to look within my own business to make sure that I'm able to deliver that message to you, you know, and to people who are listening.

Kari Jo 25:51

Yes. And you do do that so well. You are so focused on what you are doing. Thank you. If my listeners are listening right now and they're like, okay, yes, that's me. I am looking at everybody else. I don't know what to charge. I am discounting. How can they work with you and how can they get their pricing straight?

Nina Tulio 26:13

So I live on Instagram. You can always check out anything on my page. I give a ton of value on my Instagram page, and you can literally go through my page and find out so much information about pricing. If you want to check out my website, ninaTullio.com, I have some free guides and things that you can work on. The pricing upgrade is one thing I mentioned. If you want to go deeper, you can check out my course called Make That Money. It's specific to the independent artists. And yes, I have a ton of estheticians that have taken this course. It dials in, you get the calculators that we talked about, um, the budget, the price per minute, price per hour, and then price per minute sheet per service. So it really dials

Deposits Groupon And Confident Decisions

Nina Tulio 26:55

everything in for you. So if you want to take it deeper, then check out my website and just have at it. You know, dive into all the things and see what works well for you and like really feels good for your, you know, your business and where you're at.

Kari Jo 27:07

Yes. And I think that learning your numbers, there's no other better thing that you can do. So this would be so helpful for anyone who is listening right now. Really quick before we jump off, I just am wondering, do you have what is your the best business advice that you received through all of these years?

Nina Tulio 27:26

I would say best piece of advice slow down and trust yourself. Slow down and trust yourself. I think one thing that I've learned is I like to do quick, fast, quick, fast. And when making business decisions, sometimes they have to be done quickly, but most of the time, bigger decisions should be made slower with consideration. And when you're making those decisions, trust yourself because you are the only one that knows your business inside and out. So please, like listen to your gut and gut check yourself. And you know, don't question the things that you know are going to be good for your business because you're living it every single day. So kind of lean into that and lean into that sense of self.

Kari Jo 28:11

Yes, I love that. Well, Nina, thank you so much for coming on and helping us learn how to get clear on our numbers. And guys, I will put a link in the show notes below of how you can find her so you guys can easily click. But thank you so much for your time today.

Nina Tulio 28:27

Thank you. Thank you so much for having me. This was so fun. I appreciate it. Thank you.

Track Numbers And Next Steps

Kari Jo 28:32

Hey, wait, before you go, I want to invite you to download my esthetician weekly numbers tracker. The reason why I want you to do this is because it is going to help you diagnose your business in seven days. All you gotta do is download the number tracker, fill out your week, you'll start learning how to actually track your numbers. And trust me, if you do this consistently and you don't give up, eventually you will be able to read your numbers. So download the number tracker and see what you need to fix first.

Announcer 29:12

Thank you for listening to the Esthetician podcast with Kari Jo Patterson. Each week, Kari brings you real-world lessons on how to grow your empire. To learn more about Kari's fearless prosperity mastermind group, one on one VIP coaching opportunities, and more, visit www.caryjopatterson.com. That's www.kar i jopatterson.com. See you next week for more insights and strategies on the Esthetician Podcast.