You must charge what you feel the benefits of what you teach is worth. If you feel your benefits are not worth that much, then charge low prices. If however, you feel that you offer a valuable service to your students, then reflect the value of your service in setting the price of your lessons.
Don’t raise the price of lessons on existing students if you can help it. When raising prices, try to avoid the temptation to raise prices on your existing students.
The natural attrition rates of most schools will soon have the balance of the new students at your higher price. Raising the price of lessons on existing students can provide them with the reason they need to drop out.
Communication is the key to price increases.
If you do need to raise prices on existing students, always explain the reason for your increase. Explain to them that the increase is due to an increase in rent or insurance. Send them a letter and it will fly with ninety five percent of your students.
Simply raise your rates with no explanation and expect to lose scores of students. They will think you just got greedy. Remember, it’s much less expensive to keep an existing student rather than to go and find a new one.
One time you can usually getaway with a price increase across the board is at the beginning of a new year. People almost expect prices to go up in January. Still, handle all price increases with care. You can also give students a chance to renew or cash-out in advance before the new price increase.
Each year, we suggest you have a tuition increase. Here is how you do it.
As with most changes, the best strategy is to make the changes with new students first. So as of January 1st , your tuition raises for all new students. That way the higher paying students will begin to replace the lower paying students.
For your current student body, here is a strategy to raise their tuition. You can tell your students that due to an increase in expenses, tuition will be raised on January 1 st . At that point, just as an example, let’s say the new tuition will be $100 per month. But, since you guys have been loyal to the school your tuition will only increase to $90. This way, it’s almost a relief to them to have it raised only to $90 instead of $100. Again, tell them tuition for new students will go to this level and then find a level in between the current level and the new level to set for current students.
If the current students are at $79 and the new students will be at $99, split the difference with your current students to $89 as a sign of appreciation for their support.