So...what's half an hour of your time worth?
Your webvertisment allows you to be very clear about what your fees are - including any scholarships, discounts or group rates you might offer. Be careful though - the numbers you choose can have a huge bearing on your ability to attract students.
The temptation is to keep the price low, particularly if your studio is establishing itself. To ensure that when people call you, they are pleasantly surprised by how modest your fees are compared with other teachers they may have spoken to.
Setting your price too low is one of the worst things you can do to promote your studio. You have to remember, you are a service provider, not a retailer, and when people hear your price, they will make assumptions about the quality of your service...
Don't fall for this.Setting your price too low is one of the worst things you can do to promote your studio. You have to remember, you are a service provider, not a retailer, and when people hear your price, they will make assumptions about the quality of your service. So if your lessons are $8 for half an hour, when most other people seem to be charging $15, the caller will start to wonder why you're so cheap
.In fact, if most other people with similar qualifications to you are charging $15, you should be charging $17. Your price is part of your lobby, and the ticket will sometimes say more to prospective students about your studio than all your copy writing combined.
Look at it from the student's point of view
Let's assume that you were getting your house painted. Most quotes came in at around $1500. One comes in at $950. Another at $1700. Ask yourself right now who do you think the best painter is likely to be? Knowing nothing about them except the price, it's hard to shake the feeling that if you wanted the best job possible, you should at least talk to the painter that charges the most.
Whether or not you actually go for the $1700 job is a separate question, and might be a function of your own financial limitations, but the fact will remain that part of you will wish you could have afforded the premium service and if you go with a cheaper option, every tiny blemish will have you regretting that you didn't spend the extra.
Well guess what. Parents who are conscientious enough to be contemplating music lessons in the first place are usually conscientious enough to want a first rate job, and they'll be quite prepared to pay a couple of extra dollars per lesson to make it happen.
And those odd parents who are think they can save a couple of bucks by going somewhere else? You're better off without them. When the first question I hear from a parent is "how much are the lessons?", I have lost interest already, because I know their priorities are suspect.
Reinvesting your gains
Charging appropriate fees has a powerful benefit that goes well beyond first impressions of quality. The higher fees represents additional resources, which, if invested back into your business, will help your studio grow at a much faster rate than you ever would have thought possible.
Reinvesting your time
By extra resources, I don't just mean extra money. If your fees are 25% higher than you first intended, then you would only need four students to bring in income that you used to need five students to produce. Doesn't sound so exciting in a studio of four students, but if there are thirty two students in your studio, that suddenly means additional income from eight students that you don't actually have to teach. I'm sure you'll have no trouble thinking of how you could spend the four spare hours you would have each week.
Still not convinced? In the course of a forty week teaching year, those four hours add up to 160 hours of additional free time only a few hours short of a whole week! It's enough time to pursue some extra qualifications, or write articles for newspapers, or any of the dozens of other more time intensive promotion activities outlined later in this book. So while you're welcome to use the extra time lying in a hammock, sipping drinks with umbrellas in them, you should think about reinvesting a substantial slice of that time into promoting your studio.
Reinvesting your additional income
The other way of looking at higher fees is not in terms of extra time, but in terms of the extra income it represents and to then look at investing that extra income straight back into your business. So instead of looking at lifestyle improvements from your higher fees, use them to purchase exciting new facilities for the studio itself, or that high impact Yellow Pages ad you thought you couldn't afford.In this way, your additional income translates directly into an improved capacity to attract new students' helping ensure that your studio continues to grow for years to come. In this game, like any other, success breeds success, and the pain of investing into your studio will be quickly forgotten when you see the impact it has on your future student numbers.
And remember, if your studio grows enough, you are in a strong position to put fees up again, and so the cycle continues.
A caution
While this principle of reinvesting a percentage of a healthy fee back into the studio is a sound recipe for growth, you can't stretch the logic and decide "Wow! If I put up my fees 100%, then I would only need to teach half as many students!".
There has to be a sensitivity to two things before you start charging $500 an hour:
Being aware of what your competitors charge
While your fees can certainly be higher, they do need to be in the same ball park as other equivalently qualified or resourced teachers. As long as you are within a few dollars per lesson, then you're in the hunt, and in conjunction with the fact that your Lobby will be more compelling than theirs, should see you leading the pack. But if you are suddenly $10 a lesson more expensive than your competitors, then your promotion campaign is going to have to be very slick for the gap to be perceived as worthwhile.
So how do you find out what your competitors charge? That's easy enough simply call up (or have a relative call up) and pretend to be a student. Not only can you learn about their fees, but you can learn a thing or two about their telephone manner in the process. If you hear a great way of handling one of your questions, write it down.
There's nothing wrong with a little industrial espionage :)
Even if it's now clear to you that your fees are way too low, you can't suddenly hit your current students with a brand new bill. Otherwise you might find yourself with a lot more spare time than you intended.
You either have to view the increase as an incremental exercise over several years, or you'll have to establish that the new rate applies to new students only. In fact, an announcement to parents that fees have gone up, but not for them, can generate tremendous goodwill among your existing students' almost like a loyalty bonus. You normally have to be very careful about charging different students different rates, but a date-based cutoff like this is discriminatory in a way that nobody can take offence to.