Price wars

[Shelly]

Hello, I am a new member of Tan Talk and I need some advice! First of all, I would like to say that I have been reading for days and have found all the messages helpful and insightful!Here is my situation that I need advice on...I am a new salon owner (opened my doors last month). There is one other salon in the area and it has been here for years. Naturally, I knew that my presence would cause some competition. I took into consideration my competitor's prices when creating my packages - I didn't want to cause a price war. So even though my beds are all brand new, they have more bulbs and are better models - I kept my prices in line with my competitors to avoid price wars that would eventually put us both out of business.Well, I just saw an ad that my competitor is running and they are GIVING business away! The ad runs the following:*One week of tanning free (no purchase necessary, no restrictions)*20 Sessions for $65.00 (regularly priced at $110)*Monthly unlimited in ANY unit $35 (The Sun Capsule is regularly over $100)*They honor all competitors coupons and will give 3 additions tans if you bring in a couponPlease tell me how I should handle this? I can not afford to GIVE my business away. Also, I will find it difficult to turn around in two months and more than double my rates from these discounts! Please tell me what you think. Should I honor their coupons or stand my ground?ShellyPS - my grand opening specials are:*1st tan free*20% off all Packages*10% of lotions

[Mike N]

Shelly~First off, do not get caught up in price wars. By doing so, you will find it extremely hard to go back to "normal" pricing as you stated. There are better ways to win the business. First off, instead of making the first time visit free only during your grand opening, do it ALL the time. We offer a first free visit and it one of the best ways to get new clients to try your salon. Sure, you will find those who only come in for that one tan. We do not provide eyewear, so they have to at least purchase this in order to tan.Your competition is going to also have some hard times ahead with all the price dropping, they can't do it for long. Stick with your guns, offer a better service. Make sure your salon is spotless. Get to know the people that tan with you by first name, this makes them feel important when they walk in your door.Whatever you do, do not bad mouth the other salon. If someone mentions their pricing, just let them know these are your prices and services. You will come out the better salon in the long run.Best of luck!Mike------------------Take A Trip To The Coast...Palm Coast Tann mike@palmcoasttann.com

[Shelly]

Thanks! I agree 100%

[Tracie Williams]

Ditto Mike! Shelly, when the customer begins stating that your competitor's prices are lower, just simply state that you can't speak for his establishment but you "know" the service and products you provide are of excellent quality.The first free visit is a great way to increase traffic within your salon.Don't be afraid of clients visiting the competitor, actually they should, the comparison will benefit you in the long run by allowing them to realize you offer quality equipment and a clean atmosphere. Believe me, these things mean more to a customer than prices do most of the time!------------------Tracie WilliamsSandollar Corporation

[BOBER96]

We ran into the same problem with some rundown hair salon around the corner from us. They have one very old, dirty, nasty run down stand up unit, with a 15 minute tan time. We got a 9 minute Sun Capsule when they first came out, about 2 year ago. Obviously our price was considerably higher, so...we had a couple people do the price-game with us- "How come your tans are so expensive and they offer 10 tans for $25 (no kidding, they do)?" I just tell them that I KNOW our bulbs are new, I KNOW that our unit is 160 watt unit (thus much more tanning power in much less time) and in my experiences in life, you usually get what you pay for. I gave 1 guy a freebie in ours and he was so impressed that he apologized to me and my staff member that had been waiting on him.Don't get into price wars! You know that what you have is better, obviously the competition knows what you offer is better (or they would not be dropping their prices so dramatically)& it is just a matter of time before the customers figure it out too.Good luck

[CHUNN]

I totally agree! Just to play devil's advocate if the guy has his salon payed off one strategy he may be taking is to cut his prices to force you out of business. Even if this is the case I would keep your prices where they should be and offer the best customer service you can. If he is trying what I suggested then he will be inundated with too many people and his service will have to suffer.Stick to your guns!Michael

[Tan-U-Too]

Just stick to your pricing and don't base your business on what the other salon is doing. Most likely there are more then enough people to tan at both salons. The prices in that add are pretty standard prices. Let the consumers know that your lamps are always new. Try a offer where if they bring a friend or refer a friend they get 3 free tans in a regular bed. Don't focus on the other salon, focus on yours> Quote:Originally posted by Shelly:Hello, I am a new member of Tan Talk and I need some advice! First of all, I would like to say that I have been reading for days and have found all the messages helpful and insightful!Here is my situation that I need advice on...I am a new salon owner (opened my doors last month). There is one other salon in the area and it has been here for years. Naturally, I knew that my presence would cause some competition. I took into consideration my competitor's prices when creating my packages - I didn't want to cause a price war. So even though my beds are all brand new, they have more bulbs and are better models - I kept my prices in line with my competitors to avoid price wars that would eventually put us both out of business.Well, I just saw an ad that my competitor is running and they are GIVING business away! The ad runs the following:*One week of tanning free (no purchase necessary, no restrictions)*20 Sessions for $65.00 (regularly priced at $110)*Monthly unlimited in ANY unit $35 (The Sun Capsule is regularly over $100)*They honor all competitors coupons and will give 3 additions tans if you bring in a couponPlease tell me how I should handle this? I can not afford to GIVE my business away. Also, I will find it difficult to turn around in two months and more than double my rates from these discounts! Please tell me what you think. Should I honor their coupons or stand my ground?ShellyPS - my grand opening specials are:*1st tan free*20% off all Packages*10% of lotions

[Bronze Star]

bump

[BooBop]

Thanks Bronze for bumping this one. I have the price wars going on all over town. I just needed to be reminded of this advice before I get caught doing the same thing

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[Profit Master]

service,service,service,the cliants you get and retain will be a better cliantel thanthe ones you loose, and a large percentagewill come to you when the other salon has exhausted their resources.they can find cheep tans anywhere,good tans are worth paying for.