A Lesson in Pricing from a Neighborhood Barber Shop

I enjoy traveling, meeting new people, and learning about cultures and businesses wherever I go. I often share these stories on LinkedIn during my time in India. Sometimes I wonder if they’re relevant to my audience or to what we’re building at DCKAP, the ERP-first integration platform.

But when I meet with customers, they tell me they genuinely enjoy reading about different cultures and businesses, not just in the US but around the world. I double-check, and they say yes, they really do. 

Here’s one such story.

The $5 Haircut Days

In the US, I usually go to SuperCuts or whatever’s nearby. Back in college in Chicago, my friends and I would travel an hour on the CTA from Downtown to Devon Street for a $5 haircut. We’d take the Red Line from Sox-35th to Loyola, then catch another bus. It was an adventure, and looking back, it was fun doing all that just to save a few dollars.

Big Boss

When I’m in India, I go to a place called Big Boss in Anna Nagar, Chennai. A haircut here costs Rs. 150 (about $1.65). The place is always packed. The owner employs about four people, and it’s a well-run operation. Other upscale salons in the area charge Rs. 1,500 ($16+) – similar to US prices, but with a more sophisticated experience.

I like Big Boss. It’s affordable, solves the problem, and it works.

In business, we talk about raising prices to serve customers better, and many software companies keep increasing theirs. I always wondered why Big Boss never raised its prices. I’d even thought about suggesting that they should.

The Price Increase

Recently, when I visited, they charged me Rs. 200 ($2.20) instead of the usual Rs. 150. A sudden 30%+ increase. Why now?

The shopkeeper explained they’d raised prices starting this year. And honestly? I felt good about it.

The value they have offered customers like me over years means that paying $2.20 more is not a big deal. The shop is in a nice neighborhood, and other salons nearby charge almost ten times as much.

This was a smart move.

The Learning

This local barbershop is a great example of how to run a business: Increase your prices when you’re delivering value, and people will be willing to pay for it.

Thanks, Big Boss for raising your prices.

Karthik Chidambaram.