Discount campaigns in brow business

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Tops Pricing

1. Background and goal

We've discussed pricing for Powder Brows, Hairstrokes, and Microblading in multiple articles and videos. We've often concluded that a competitive price is a real benefit. It can help new artists get their businesses up and running. But there's a catch. We often ask, "How low can I go with my pricing without hurting my business?" That's exactly what we're going to explore in this article.

Background and survey methods

We conducted thorough research by surveying 1,244 actual clients of Powder Brows, Hairstrokes, and Microblading. Some turned down services due to high prices or chose another artist. We wanted to know how price impacts the choice to undergo a procedure. More importantly, we aimed to find the tipping point at which lowering the price backfires. We surveyed over 700 U.S. and European professionals to learn about their pricing strategies. Here are the practical insights you might find useful, whether you're a new or experienced artist.

First Thing: Know Your Costs

If you're offering Powder Brows, Hairstrokes or microblading services, you should clearly understand what each procedure costs you. Many new artists think it's as cheap as $10 because they heard it in a training ad. But that's far from the truth; we need to dive deeper. Basic business planning tells us we can't rely on such a low number.

The Real Costs Might Surprise

Most people think about direct costs like supplies and the rent for your workspace. But you should also consider other costs that can add up. These include subscriptions, app fees, branding, how much it costs to get new customers, and utility bills. Don't forget communication expenses, website maintenance, editing photos, and marketing. Lastly, make sure to count a wage for yourself. When you add all of these up, many artists discover that the real cost is much more than they first thought.

2. Example: Breaking Down Costs

Let's get specific. Imagine you pay $500 a month for your workspace. You do 3 procedures a week. That’s about $41.60 per procedure, just for rent. Add another $200 a month for utilities, which brings the cost per procedure to $16.60 more. If you also have a phone plan, it could add $50-60 to each procedure. Supplies like cartridges, pigments, blades, gloves, and hygiene items could be another $15. These numbers don't even cover your labor or any taxes yet.

Unseen Costs: What You Might Miss

Now think about this: What if someone else did the job, not you? You'd need to pay them a wage. Plus, there would be taxes on that. You need to eat, live somewhere, and cover basic needs. This is your minimum wage portion of the cost. Let's also not forget other costs like bookkeeping, bank fees, and insurance. Adding all this up, it wouldn't be surprising if you had an extra $70-120 per procedure. So, if you're doing 12 procedures a month, you’re already looking at $200-250 in costs for each.

The Hidden Cost: Getting Customers

Guess what? There's more! One key "hidden" cost is the money you spend to attract customers. Let's dive in. To be competitive in the Powder Brows, Hairstrokes, or microblading market, you'll likely need a social media following of at least 50,000 to 100,000 people. Why? This reach level typically brings in 20-30 interested contacts, enough to secure those all-important 12 bookings a month. If you're starting and don't have a strong social media presence that aligns with your ideal customer, maintaining this reach can cost you between $500 and $800. That adds another $50-70 to the cost of each procedure.

Additionally, the analyses we run constantly on social media platform engagement cost indicate that the cost of engagement has increased steadily and without significant declines. Currently, the cost of both the web search via search engines and the cost of reach on social media is manifold greater compared to around five years ago. According to some statistics, it has become more expensive 3-5 fold. What should be taken into account seriously is that the rise in cost shows no slowing down as the number of users steadily increases.

The Bottom Line: Costs Add Up Quickly

When you tally everything, don't be shocked to find out that each procedure might actually cost you around $250-300, and that's before taxes. If you aim to make a profit (and who isn't?), that must also be factored in. For instance, if you have bigger life goals requiring saving money, your selling price must also cover that.

We have seen with many artists that their perception of their actual costs is greatly distorted, which happens to starting artists and experienced artists. It pays off to draw a line and rigorously calculate the costs so that one truly understands their financial circumstances.

3. Downside of Discount Campaigns

Long-Term Effects of Underpricing

Many artists only realize the impact of "campaign pricing" and massive discounts afterward. A large majority—over 82%—admit they hadn't properly calculated the actual cost of the procedure. These artists say they wouldn't have offered big discounts without knowing their true costs. The takeaway is clear: offering services below your net cost can wreck your business unless you have another income source to back it up.

Underpricing as Borrowing from Tomorrow

So, one major lesson from using discounts is you're essentially borrowing from your future. If your campaign aims to get immediate income without a deeper marketing strategy, you're accumulating debt you'll have to pay off later.

The Ignored Problem: Lost Profits

Another issue with discount campaigns is something many artists ignore: the profit you lose from customers who would've paid full price. What does this mean? Let's say an artist runs a 14-day discount campaign and secures 15 bookings at a reduced rate. On the surface, that might look good. But a closer look might reveal a different story.

Consider the Average Inbound Rate

The average inbound rate is the business you get from clients who find you independently. Maybe they heard about you through word of mouth, found your website, or saw your social media posts. These are clients you don't spend money to acquire. Let's say you get 6 such clients a month. If you had 15 bookings during your discount campaign, at least 3 would have been from clients willing to pay full price. So, if you offered a 50% discount for the campaign, you actually gained business from only 9 extra clients, not 15. If these 9 extra clients don't bring in any profit, you've spent a lot of time and energy getting photos for your portfolio.

Challenges in Going Back

Over 71% of artists find it challenging to revert to regular pricing. The reason? They're now associated with lower prices. If an artist has run multiple discount campaigns, she might find that clients only book when there's a deal. Clients talk to each other, and if an artist doesn't remove old campaign information from her social media, it makes sense for future clients to wait for the next discount.

4. How to Approach Discounting

Treat Loss Like Dracula Treats Garlic!

Know the numbers before you excitedly put a "50% Off" sticker on a picture of a perfectly done brow. Understand the net cost of the service you're providing. At the very least, your discounted price should still make you a small profit. Think of running at a loss like a vampire thinks of garlic: something to be avoided at all costs. So, start by doing your homework. Crunch the numbers to find the lowest price you can afford to offer. Don't forget, it's probably higher than you initially think. It's certainly higher than the $10-15 some training courses claim is the "cost of doing a Powder Brows, Hairstrokes or Microblading procedure." Trying to undercut competitor prices can become a race to the bottom, and nobody wins. If you're pricing below your net cost, you're losing money. Taking joy in a competitor's loss won't help your business.

Stick to Your Limits

Based on interviews and feedback from 1,244 clients, we've found that making exceptions can ruin the effectiveness of a discount campaign. Let's say a client misses the deadline but still wants the discounted rate. It might seem harmless to bend the rules just once. However, exceptions like this can erode your campaign's credibility and future ones like it. If the campaign ends at a specific time, stick to it. The same goes for limiting the number of discounted bookings. It might be tempting to stretch a "Special price for the first 5 bookings" into 15. You might feel clever, like a Bond villain, but it’s actually a bad idea. At its core, it's dishonest, and dishonesty can backfire.

Following such standards and being precise is much more important than many starting artists often realize. When it comes to seasoned artists, they often frame such expenses as the alternative cost they did not earn if they had to refuse the discounts after the deadline as an investment into their future and the success of future campaigns. Many research projects have indicated that the more the artists have been in business, the longer-term approach they have towards managing such campaigns.

Clean Up After the Campaign

A discount campaign can be a well-executed marketing move, but it's wise to clean up afterward. When it comes to your landing page, don't just delete it. Consider updating the information instead. You might wonder, "Isn't that like lying to the customer?" The answer is no, as long as you're honest and upfront. If a client asks why you removed the information, be straightforward. Explain that you took it down to prevent new and existing customers from delaying bookings in hopes of a future discount. This also stops them from associating your service with a lower price.

Being honest might surprise some customers, especially in regions where people are more reserved. But honesty is always the best policy. It shields you from accusations of being manipulative. Just make sure not to discount campaigns too often. Keep them to 10-20% of the total weeks you're in business to maintain your brand’s value.

5. Conclusions

First, Crunch the Numbers

Before you even consider launching a discount campaign, it's crucial to calculate your net cost accurately. Knowing this price can clarify the financial limits you must maintain to keep your business running smoothly.

Understand the Risks of Discounting

The first risk is pricing your procedures below your net cost. Doing this can leave you wondering why you're short on cash at the end of the month. Always aim for a price above your net cost plus a 10-15% profit margin.

Additionally you have to consider the impact on your regular business. Offering discounts can lead to losing revenue from customers who would have come anyway. You can estimate this loss by looking at the number of inbound customers not driven by paid ads during periods without campaigns. Another serious risk involves underestimating the challenge of returning to regular pricing. For many artists, discount campaigns can inadvertently become the "new normal," making it almost impossible to revert to regular prices.

Execute the Campaign Properly

Start by identifying your financial limits, not by crafting the campaign. This ensures that you don't go below your actual net cost. Stick to the rules and limitations of your campaign. Straying from these rules, even by making minor exceptions, can undermine your credibility and the campaign's effectiveness.

Finally, Clean Up

After the campaign ends, update your landing pages and remove any related ads. This is a smart move to prevent any confusion among potential customers about your regular prices.