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The salon that lets you decide their prices

Mita Adesanya doubts the business sense at Cutting Room Creative but applauds the kind gesture

Published on August 6th 2010.


The salon that lets you decide their prices

With job cuts left, right and centre and prices being hiked all around, the current economic climate has created a 'survival of the fittest' situation- where the fittest are the most creative, the thriftiest or just the richest.But Cutting Room Creative, a Leeds-based hair salon, has observed the sad state of our being and sees our plight. They have decided to take a very brave and messianic stance for three weeks in August– put the power in the hands of the people and let them decide the price of their hair bill.

This is the business model that isn't. Does the hair salon stand to gain anything from this venture? Historically speaking (based on the sole example that is Radiohead) yes and no, but mostly no.

If this concept sounds familiar to you, it's because it's happened before. Actually, Joe Nions and Carly Aplin, the award-winning hairstylists at Cutting Room Creative who bore the idea, borrowed it from rock legends Radiohead. In 2007, Radiohead released their album In Rainbows as a digital download that customers could buy at whatever price they saw fit.

This is the business model that isn't. Does the hair salon stand to gain anything from this venture? Historically speaking (based on the sole example that is Radiohead) yes and no, but mostly no.

According to a survey by Comscore, only two out of five people paid for the Radiohead album, thus the average price paid was a measly $2.26 - only slightly more than a pound at the time. Even those who did pay only spent an average of $6, about £3, and considering CDs are generally priced between £7 an £10, these figures aren't exactly positive.

The statistics make Radiohead look pretty silly, but they still came out on top. At the end of the day they further cemented their status as pop culture icons, and the plan gave them so much publicity that they were still able to make crazy amounts of money from their subsequent sold out tour.

So what does this tell us about what will happen in Cutting Room Creative's version of the experiment?

Much like music, a trip to the hair salon is a luxury not a necessity for many of us. This elasticity means that in times of financial difficulty - as painful as the thought of off-coloured regrowth may be - it's one of the things on the monthly budget that will get crossed off. So if given the chance to spend nothing on it, it is highly likely the opportunity will be embraced with open arms.

But what if the hairstyle is absolutely divine, some ask, will I not pay based on the quality? And indeed there is quality. The hair salon recently received three nominations for the British Hairdressing Awards - the Oscars of the hair industry.

The example of Radiohead suggests that this is simply not enough though. In Rainbows won two Grammy Awards and was even nominated for album of the year. It is a critically acclaimed record and is now widely recognised as one of the best albums of all time.

Trend suggests that quality just makes people (three out of five people to be precise) more excited to acquire the product or service free of charge, and therefore this system is a pretty useless way to test the quality of a product or service - something the stylists say they think it will do.

On the bright side though, Cutting Room Creative can expect to see a slew of new local customers but probably not customers from afar as they will likely be put off by travel expenses. They can also expect some great publicity and maybe even a new award for innovation at the next British Hairdressing Awards, all of which may help in the long-run.

If their aim is to take the edge off and give people in a bit of a tight spot a new do, then they should be very successful. On the other hand if their goal is to increase revenue, then the short-term forecast for that looks pretty bleak to say the least.

In as much as we would like to believe that when given the opportunity to pay what we think is worth it we actually would, the fact is that being confined to a budget that is as tight as duck's butt has made us all a bunch of cheapskates.

The offer runs from Monday 2 August through to Saturday 21 August and is available to everyone making a booking at CRC City Centre on 0113 269 7070 (choose option 1) or visitcrc-salons.co.uk

When making a booking, please quote ‘Pay What You Think It’s Worth’

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