The Lower the Price, the Lower the Expectations

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When you read the title of this article – the Lower the Price, the Lower the Expectations – what came to mind? Did you feel that meant that the market would have lower expectations of your school if it was low price? Or did you feel you would not have to meet high expectations if your price was low? For far too many owners, the second description is more accurate.

As your skills as a teacher improve and your system for operating the school becomes more polished and professional, you can begin to raise your standards of performance and your tuition with it.

This is not to say people don’t like a good deal. Everyone does. However, there are certain things you don’t expect to have discounted and, in fact, may not want them if they are. Health care is at the top of that list. Rarely do we say, “Give my kids the cheapest medical exam possible.” Education is much like that. Parents don’t work hard to give their children the cheapest education possible. Your martial arts school is not a gym where club owners compete over $29 membership fees. You want to be compared to the local private schools, not the local gym.

In establishing your tuition, divide your area’s pull potential student base into three levels of income: the lowest third, the middle third, and the highest third of income earners. You want to price your tuition for the middle and highest thirds, not the lowest. It is much easier to manage quality and teach 100 students paying you $150 per month than 300 students paying you $50 per month. The gross is still a projected $15,000 per month, but the amount of work and stress to manage 300 students is much more than just three times what it is for 100.

The top two thirds of income earners are not terribly concerned over $100 or so one way or the other. They are concerned about getting a return on their investment and feeling as though they are valued members of your school. They will also want to train with people in the school who are like them and want to be trained by a staff of professionals.

The Screen Money Provides

To a degree, the high-income earners’ market will want to train at a club that not everyone can afford. This is not out of snobbery as much as the natural screening process that money affords them. This is why people belong to country clubs and private golf courses. I’ve belonged to plenty of each, and usually they are not any nicer than upper-scale public facilities. The difference is that by paying more for what everyone else can have for less, you don’t have to do it with everyone else. The levels of expectation are much higher for the private club, and so is the price.

The School Down the Street is Cheaper

Here’s a great response to a prospect that points out that the school down the street is cheaper: “Mrs. Jones, we could charge that same tuition. But you know what? We would be packed, and it would be a lot harder to give your son personal attention and to maintain the quality of students we are known for. Plus, it probably wouldn’t be as safe with loads of kids in here on a discounted program. We’re all about quality, and our tuition helps us keep our student standards high. Our school is really for the families who want the best for their children.”

Don’t you love that last line? “Our school is really for the families who want the best for their children.” What parent is going to respond, “Well, that’s not us. We want less than the best for our kids.”

The most important thing to understand is that this market will not expect you to be the best instructor and the cheapest at the same time. However, at a good price, they will expect you to be the best, so make sure you are always studying and expanding your skills as a martial artist, a teacher, and a businessperson. Then, make sure you are training your staff at least two hours per week to carry out the mission of Being the Best.