Is Running Discounts To Get New Clients a Bad Idea?

Hello, my friend. I'm gonna be starting off this episode with a question for you. If you could spend $50 to make $400, would you do it? Now, I think the majority of us would say yes to that question, right?

And the reason I'm asking you this question is because it's very relevant to our topic today, which is, is discounting an effective or harmful strategy for you to build your clientele as a hairstylist? Now, I personally don't have experience with using discounts to fill my, my chair. When I built my chair and my clientele to three and a half months book solid of five new clients, cl- five new client requests a week, I did not use discounts to do that. I used very strategic, um, niche down, targeted marketing to make that happen for me.

I maybe used a little bit of incentives, like a free conditioning treatment, but I strongly don't believe that that's what actually helped me build my clientele. Now, I would much rather you... I'm, I, I naturally pulled more towards the side of I would much more rather you build your chair without discounts. I, I...

Because I think it's 100% possible. However, it may be an interesting strategy for you to look into. Particularly the time of recording this, we have a weird economic period going on. Consumer behavior is changing and people are much more afraid to spend money than they ever have been before.

I think maybe for people who are first building their clientele from scratch, they're rebuilding, or you just have gaps that you would like to fill or you wanna get a quick cash injection, this may be an interesting thing for you to consider as well. And this is something where I don't really have a strong stance on whether, you know, you should or shouldn't use discounts to fill your book. It's something where it's like, well, if you want to try it, absolutely go ahead and try it. But I think that there's some really interesting things to consider for whether or not it is the right fit for you, and I think that there's really strategic ways that you can go about it to make it as optimal for you as possible.

So, I'm gonna ask you the same question again, my friends. Would you spend $50 to make $400? And I'll give you more context to that question after the intro. So, if you're ready to get into it, let's go.

What's the tea, friend? My name's Hunter Donia, industry business educator for hairstylists, but my friends just call me Hunty. Whether it be growing your clientele, making more money, or automating and streamlining your systems, in the next 20 minutes or so, you'll be hearing realistic, actionable strategies to create a beautiful career for yourself behind the chair. So, if you're ready to get into it, welcome to the Modern Hairstylist podcast.

So, let's say that you have a $50 off for your first visit coupon, right? Let's say that's what you do. I'm not saying I recommend you do that. I'm just saying for example purposes.

And let's say that your color and cut service is $150. So, your client comes and s- this new client comes and see you, sees you and you make 100 bucks on that first service. Now, this is also not including or considering your expenses, right? This is just you gross $100.

Let's say, on average, your new client retention is high and that client comes back and sees you two more times after that first visit. Then you would end up making $400 because you discounted that $50 in the beginning. So, thinking about discounting as an investment is super important, and I don't think that we think about the money that we spend as an investment enough, and it truly is how you should be measuring the decisions you make for how you spending your, how you spend your money, and also if you decide to discount or not. Now, emotionally discounting, th- that which is a term that has been around for a long time, which refers to you grandfathering in your clients who have been seeing you for a, a while to their old prices and not charging them your flat new prices across the board, that's a different conversation.

And in that, I am very strongly like, no, you absolutely should not emotionally discount. Every single person should be paying the same price across the board. But when we, when it comes to an incentivized discounting conversation such as like, a first visit, I think that's different. But either way, I want you to think about every single time you discount as if you are paying that person that amount of money.

So, you're paying somebody $50, right, to get them to come sit in your chair. And I think when you change your mindset to thinking about discounting in the traditional concept, I don't think that we take it tangibly or seriously enough when we, when we lean into that traditional thought process. But I think when you start to think about the fact that you are investing, that you're paying, that you are losing $50 when you do that, I, I think it'll change your perspective to take that return that you get on the backend a little bit more seriously. So, when we decide to discount, or when we despi- decide to spend any type of money, or even when we decide to spend any of our time, make sure you're thinking about the ROI on the backend.

That is how successful entrepreneurs think, and that's how I want you to think about this, first and foremost. Going back to how I built my clientele. I did not use discounts at all and it was just a decision that I made because I didn't think I needed them, because I was really confident in my marketing strategy. And I attracted people who didn't really give a shit about that, uh, uh, if there was a discount or not.

Such as myself. I am a client who I would spend $100 for my 30-minute barber cut every two weeks if it was truly, um, an amazing one. Like, I do not care. And I'm somebody who, like, if you had some sort of flashy $50 off your first visit situation, I wouldn't even register it.

I don't care.The way that I'm shopping as a consumer is I wanna know, can I trust you, do you understand me and my problems, and what makes your solutions worth it for me to invest this money in you? That is how I'm shopping. I am not shopping by discount or comparing your prices to another.

I will spend however much money I need to if your, if your marketing experience for me is excellent enough, and if the client experience and the service you're providing is excellent enough as well. Those are the people that I would rather you be attracting, and those people are out there. However, sometimes people's conditions and the people, the way that people shop may change, or you work with different demographics or whatever it may be. Or, like we said earlier, you may be at the beginning of gro- growing your clientele, rebuilding a clientele, or you might just wanna fill gaps.

And so, that's where this could be taken into consideration. And going further deeper into that, if you're in a space where it's like, I would rather there be a butt in my chair because otherwise there's not gonna be. So it's like, I'll take a discount client, I don't really care if they come back and see me again, that's cool for you. If you could use a quick cash injection, right, that's cool for you, whether that be for your personal expenses, if you really need it or could use it, or that be for your business expenses.

What I would rather you do with the money that you make from maybe a discounted client, or the money that you make from a decision or something like this where you're just trying to get a butt in your chair and you don't care who it is, I'd rather you be, be looking for quick cash injections to be able to reinvest back into the business. Because that looks like multiplying your money instead of just, uh, being able to use it to spend it. I would much rather you invest in your long-term of your business to make more money versus just get money in the, in the short-term and just spend it immediately, right? That is, again, how successful entrepreneurs think.

We don't think about just taking the money and spending it now. We think about how can we multiply this? How can we take what we have and build on top of it? Once you get your first 50, you can turn that into 500.

Once you get that 500, you can turn that into 5,000 if you're investing in the correct things such as education, right, or help with your marketing or ads or something like that, branding, et cetera, et cetera. Another thing to consider, maybe if you're willing to, uh, I don't know, discount, and if the, if the reason you're discounting is just because you would rather have a client than not, you better make sure it's worth it. And I would love for that, that money that you make to be something that will help you grow your business in the long run. However, I also understand if you just need to put food on the table, if you're in a weird scase, scarce place, and you just need that quick cash injection for personal experience, totally understand that as well.

I'm just saying that I'd rather you multiply it than not, if you are able to. The other thing to consider when we talk about I would rather have a client in my chair than not have a client in my chair is also when you have a gap in your schedule, I would really rather you, instead of just like, you know, chilling out, I would rather you use that time to work on the business Again, a way that you can now have, you ha- you just gained time, right? Time is another valuable resource. So now you can reinvest that time into working on the business, which will then also grow your business in the long run, right?

So if the time that it'll spend you to do that discounted client will be worth your in- investment more than your investment of that time to work on the business, go ahead, sure. But I want t- to make sure that you take into consideration the value of your time and the time that you give up and what your return on investment is on either/or. So again, your return on your investment is so absolutely crucial when we co- when we talk about things such as this, and thinking about it as if I am spending money or I'm spending time when I'm discounting a service is super important. Now, considering whether or not this is a successful strategy or something that you would be willing to sacrifice to be able to put into place is a big lesson that I learned this year particularly, is that not every single thing that you can do is going to be 100% predictable in, in the beginning.

You know, you can be sold on a topic, you could not be sold on a topic, on a strategy, something that you may wanna try out, and you'll h- hear other people's experiences, whatever it may be. But you are not gonna know whether that's gonna work for you or not unless you actually test it, especially with marketing, because we are all different. And we have different capabilities, we have different ways that we go about things, we have different demographics that we're sh- that we are trying to attract, right So marketing is something where you just have to be willing to test, fail, record your results, optimize the efforts, test them again, fail again, record the results, and do it over and over and over again for the rest of time. Marketing is never gonna change, and the strategies that you put into place are always going to be evolving, and you just have to be willing to test.

It always changes, and there's no perfect foolproof strategy out there that will work for everyone. So this is another thing where it's like you just have to be willing to test it. It will not be predictable, but if you test it, then now you'll ha- have gained beautiful experience and knowledge for what that looks like for you in the future, right? So it's kind of something where it's like, are you willing to take the risk of this not working out so that you can discover whether it works out for you or not, right?

Are you willing to take that risk? And if you are, go ahead and do it. Now, there are some things that you can do to have a little bit of a prediction of how successful this may be for you, or get a little bit of a finger on the pulse of how well this may work for you. And I'll touch on that in this episode.

But before we get there, I wanna give you a few other things to consider overall about whether you should discount or notNow, let's say, you know, this is what I hear from stylists all the time, that, like, if you use discounts to attract new clients, then you're only going to be attracting a discount searching client, right? Let's say that that does happen. Like, let's say that you get a client in your chair, and they're, like, complaining to you about their budget, and that they would love to come back to see you, but they can't afford you, again, without the discount or something like that. It's going to be important that you are, you are committed to and willing to hold your ground.

So, let's say that you do discount the first time. You better be firm in the fact that your prices are your prices moving forward, and that is a one-time thing. So, if you're somebody who you don't want to confront the intensity of having to hold strong in that boundary, if you're somebody who's nervous that you would not be able to hold that boundary in place, then this may not be the right fit for you. But if you are willing and committed to making sure that you are strong in your prices and that you will not emotionally discount moving forward, then maybe this could be an okay strategy for you.

And that brings me to my next point when we talk about if the first client actually comes back to see you a second time. What happens the second visit? Starting with the end in mind. Your new client retention better be off the chain if you wanna make something like this work well for you in the long run.

Your new client retention, and measuring it and understanding it, and making sure that you have created an experience where people wanna come back, and you're offering a service that is so excellent that makes people wanna come back, is what is really gonna set you up for success if you do plan on implementing this strategy, right? If you're a Modern Stylist Movement member, which is the alumni group to Pre-Visit Pathway, my front-end course, if you're in Modern Stylist Movement, then you have access to a new client retention calculator, which will share with you what it... which will share with you how effectively, what percentage of your new clients actually come back to see you more than three or more times. And if your percentage is 85 plus, then that's where we're working with a really excellent new client retention.

And when we have that type of number, when we know, if we can get a client into the chair, then they will stick with us and they will come back to us, if we are confident in that, then doing things such as discounting to get that client into our chair may be really effective for you. That's when we can confidently say and track and predict, if I spend $50, I'll make 400. Because, on average, these types of clients will... my client and my experience makes it so my client will come back and see me, on average a- for three visits, let's say.

So, I know that if I sacrifice this $50 upfront, it will be very likely for me to make that money back over the course of when they come back to see me. So, when you get a new client into your chair, no matter if they were coming from a discount or not, it's so important that you plant seeds for retention and that you have a strong understanding of what your new client retention is. And having a strong new client retention understanding, understanding what that number is, will give you a big understanding of whether or not you are ready to implement this or not, or if it might be a good idea for you or not. If your new client retention is low, if you're not having a great time or an easy time getting clients to get back into your chair, then that's where I'd be like, "You discounting your services is not what you need to focus on."

You getting new clients in your chair is absolutely not what you need to focus on. I would rather you focus 100% on your eff- of your effort on your retention, your client experience, and your skillset as well, technically. Because all of your marketing effort goes to complete waste if you don't have clients coming back to see you. So, that's kind of my biggest concern here with this strategy, with discounting to get new clients into your chair, is that you may be getting a client who's not willing to come back and see you.

But it's so important that you are spending time behind the chair, investing in people that will stay with you for a long time in the future. Again, going back to thinking about the return on your investment, the investment of your time and your money right now, what does that look like for you in the future, right? So, setting up strategies and a client experience for making it so whatever, however a new client gets into your chair, making it so they're more likely to stay with you for a long time is super important. Now, let's say that you get this client into your chair and they came to see you partially because you did a discount, you did an incentive, a discounted incentive for their first visit.

I think that that same type of client would be interested and more likely to come back and see you with another incentive. But that does not necessarily mean that your next incentive has to be a monetary one. And I think... I, I'm a firm believer that, like, if you could get somebody to come back and see you three times, especially if you plant seeds for retention, like the way that I'm gonna be sharing with you in just a moment, then you're much more likely to get them to come back and see you more and more and more.

It's much easier to get an existing customer to spend money with you and to continue to spend money with you than it is a new client. So, if you can kind of bait the person to come and see you the first, the second, and the third time with an incentive, then maybe they'll be, they'll be loyal to you enough, they'll have experienced you enough, trusted you enough to want to continue to come see, see you, even without an incentive, right?So let's say, like, you do, like, a $50 off coupon for a new client for the first visit. For your second visit, maybe you offer a free conditioning treatment, right?

Or maybe you offer a free toner, if that's worth it for you, right? Um, something like that, having a second thing that is not monetary, which is important, may be helpful in making it so this new client actually ends up being a long-term client with you. And using that buyer's psychology to make them continuously come back to you may be an effective thing for you to consider. Other things that you wanna consider to make sure that this is actually worth it for you because th- because we don't wanna look at this...

We can look at this as just a quick cash injection, but I'd rather you look at this as a something that you build your business for the long run with. So if we're looking at this from a long run perspective, then planting seeds of retention is absolutely so important. Here are some ways we do that. Our pre-visit experience and our post-visit experience, especially the post-visit experience, especially with new clients.

Checking in with them, giving them reminder emails, giving them at-home maintenance care, selling retail to them while they're in the chair, and then sending them home with maintenance instructions and instructions for how they can do that stuff, so absolutely powerful for your retention in getting somebody back into your chair. And I teach you how to automate all of that stuff within my programs and do it in a really badass way. So your post-visit experience better be absolutely off the chain to get that person to come back into your chair, right? In your in-the-chair experience, creating a plan with somebody, all right?

Creating a plan for the person's vision and goals and lo- and sharing with them the long-term vision, right, is super powerful and important. I relate this to a lot of people are having a difficult time with hiring stylists and assistants in their salon right now. And the way that I believe we need to address that is showing somebody what the growth plan is in the long run, because it will get somebody to be more committed and excited and make them feel like they're working towards something, but also feel like they need to come back to you to make that happen for them because you're the one who laid out the plan and you're creating the environment for them to be able to do that successfully. You're giving them the tools, you're giving them the mentorship, et cetera, et cetera.

So with clients, if we can set a long-term plan that goes beyond three visits, right, we can plant that seed, those seeds of retention and you can make it so it's much more likely for a client to come back. This includes, it- this should be throughout your entire service, your entire service, that you are planting those seeds. This is in the consultation and also before you check your client out. When you turn your client around and they look in the mirror and they love their hair, you're gonna talk to them about what happens next time, right?

Whether you pre-book them or not, you're gonna talk about what happens next time and your post-visit experience will do a lot of the heavy lifting about actually getting that person back into your chair for fulfilling that plan. So make sure that you are doing a really good job at planting those seeds of retention, doing things to get that client to come back into your chair so this isn't just a quick cash injection, this isn't something where it's like, "Oh, I'd rather have a client than not." This is something where we're building the foundation of your clientele and your business in the long run. We want somebody to come back.

We want your frequency of visit number to be high. So the way that we do that is our client experience, and with selling retail and with your post-visit experience and high-tech, innovative, automated shit, so that way you can stay consistent with this stuff without over- being overwhelmed or stretching yourself too thin. My last piece of advice here is I know that the big concern is that with, with offering discounts as an incentive to come see you for the first time, I know that the big concern is that we'll be attracting possibly non-ideal clients or discount-seeking clients. In your post-visit experience, in pre-visit pathway, I teach you how to set up a pre-visit experience that makes it so you can weed out those people and set those clients up to be an excellent fit for you, to you can even turn a possibly non-ideal client into an ideal client with an excellent automated pre-visit experience, truly.

And you can filter those people out and you can ask certain questions to make it so you are, you can say no or you can deny a client because they may not seem like they're in it for you for the long haul or they seem like they may just not be an ideal, uh, service p- uh, or person for you to be doing a service on, at least for that first visit. So setting up a pre-visit experience where you have a very specific focus, curated funnel that makes their pre-visit experience amazing, sets up their expectations and your expectations, and then also allows you to screen them and decide whether or not they're the right fit for you, will protect you and make it so you don't have to risk a lot of the, uh, concern of getting those non-ideal people into your chair. So to top this off, my friend, overall, this strategy is something where it's like you either love it or you hate it. But sometimes if it's something that's interesting for you or you think that it might be fascinating to explore, you just have to test it and figure it out.

Okay, so before we close this out, there's just one last thing that I wanna make sure that you consider if you are going to implement this strategy. I wanna make sure that you also have a referral program in your space for existing clients to take advantage of if you are going to give incentives to new clients. I just think that for logistics and for PR, I think this looks good on your, on your part, because I think that when existing clients see that you have this incentive for new clients, especially loyal ones, they may get the wrong idea or they may be a little bit upset that they don't have any ways of getting money off of their service, right? So having a referral program, and I think that the majority of referral programs out there, the classic ways that we do that are completely dead and they don't work.

I teach a really nice modern one that works really well in Modern Stylist Movement. So if you're a Modern Stylist Movement member, you have access to that master class right now that will, that will make it so you have a referral program that works, that is fair for everybody, and that makes it so your existing clients don't get upset over the fact that they don't have opportunities to save money on your services as well, but also gets you a return on your investment. And it's something that you can make as niche down or as wide as you want to, which is the beauty of it all.Okay.

With all that being said, my friends, this is a strategy where it's either take it or leave it. But you may not know whether or not it actually may be super lucrative for you or not unless you are willing to test it, unless you are willing to risk it. But as long as you do it as strategically as possible, it could be the thing that changes everything for you, or it could be something that does not work out for you well at all. Guess what?

That's okay 'cause you're the owner of your business and you can choose to shut it down. That is the beauty of being your own entrepreneur, being your own boss. You get to make these decisions. You get to test these things out, learn these lessons, and implement things as strategically as you possibly can, and then move forward with those lessons.

And they will just be helpful for you. There's no such thing as bad experience when it comes to learning the business side of things. You'll be able to take these lessons, whether it fails or it's amazing, throughout the rest of your career. So, um, maybe this is something that you wanna test.

Let me know if you do. Let me know if you're interested in this or if you're going to be, uh, trying this out. You can hit me in the DMs @hairbyhunty and let me know, and I'm really looking forward to seeing if it works for you. So much love to you, my friend.

I hope that you enjoyed this episode of the Modern Hairstylist podcast. Peace out, girl scout. Bye-bye.

End of transcript. © 2023 Hunter Donia LLC.