Piano World Home Page Forums Our Most Popular Forums Piano Teachers Forum The Art of Raising Fees, Part II

AZNPiano, started a lengthy thread on this topic back in June. Just this past week, a friend of mine sent me this post from the Washington Post, a highly respected newspaper out of Washington, D. C.

The article says, "in inflation-adjusted dollars." I'm not entirely sure how to deal with this information. I've raised my fees roughly in step with inflation, that is, no increase for increasing experience or additional course work, knowledge, etc. But my clients are losing income. Not factored into this calculation is that every day expenses, like gasoline, is commanding a greater percentage of disposable income, as the price has climbed from less than $1/gallon back then, to roughly $3.50/gallon today. That is drastically more than inflation.

In any event, if the average family in the middle of the income spectrum has lost over $500/mo in disposable income, it surely affects extra-curricular activities for their children, especially piano lessons. I'm suspecting that the change in clientele I've experienced over the last 25 years can be explained, in large part, by this decreasing real income of American households.

The only practical solution I can see is to match our fees to real income of our clients. I'm loath to do that, as I'm sure you are, but as we get older, more and more younger teachers will be coming into the field, and charging rates which put them on par with their clients, leaving it harder and harder for older, experienced teachers, to maintain their income level.

Thoughts?

John, you are raising a fascinating topic. We want our studio fees to be commensurate with what we perceive as our teaching skills and experience, and we want those fees also to creep up over the years - at the very least, we want them to keep pace with inflation.

But you are suggesting that we may have to actually *lower* our fees, to remain both affordable and competitive with our younger colleagues. Maybe so (though it looks bad to do it). I don't think piano pedagogy classes ever ponder this dilemma.

I'm a student -- but I just want folks to be aware of the inflation situation and I'm glad you brought this up. For those who don't know -- the reason our Government claims inflation is practically non-existent is because they conveniently changed the way it's calculated. They have removed items like food and energy costs (gasoline, oil, electricity, etc.) from the items used to determine the rate of inflation -- you know, those optional things that we really can do without (bold words are an example of sarcasm -- sad to say many do not understand sarcasm anymore so must explain).

This is why many are hurting badly as our rulers keep telling us everything is just fine.

Thinking out loud:

If your target demographic is the semi-interested enrichment activity student, you can only charge what the parents will pay, and the entry level teachers will undercut you until you lower your rates to theirs.

If your target demographic is the serious musician who can really benefit from your advanced skills, you can raise your rates to what you're worth, until you've saturated the available market.

If you live in an affluent area you may be able to fill your studio charging $100 - $200 per hour. In a more average area there may be only one student who can afford that.

What is the biggest target audience? Isn't it the world, via Skype?

Tim, there is a lot I could teach via Skype. I teach my grandchildren many lessons via Skype.

Unfortunately, it's the things I cannot teach using Skype which makes all the difference in the world. It's sort of like group lessons. Much valuable information can be taught in the classroom setting, but there remains one-on-one tweaking that simply cannot be done in that setting.

Very interesting ideas, John!

I was going to raise my rates this month, but I decided against it.

I go back and forth about raising rates. On the one hand, I know the unemployment rate nationally is high (that is, the REAL rate, not the 'fake' rate that we're told), gas is higher, food is higher, taxes higher, etc....

But then I figure that as long as Starbucks stores aren't closing down all around me, I'm probably fine and can make a move to increase my fees. The families who I know are cutting back are cutting things like coffee, Jamba Juice, fast food, and the like. So far, they aren't cutting piano lessons.

I think it probably depends on the market where you are. The natural progression is to start out fresh and cheap, then gain experience, reputation, and get more expensive. So if you find you really are losing students, then yes maybe it's necessary to lower prices, or give people some kind of 'deal'.

Customers love to think that the goods or service are reassuringly expensive, then to get them a cut price.

The other side of the coin to maintaining or increasing income is to study ways to reduce expenses. One might want to liquidate assets (2nd pianos, trade down one's piano, et c.) for investments destined to perform well in the scenario some posters have described.


M.

September 2012 I raise my 30 minutes lesson $30 to $33 a 10% raise to all my 30 minutes students, I lost one student and the rest stay. I was very grateful for that. However, I also notice since then amount of getting new students has been decreasing compare to previous years.
July 2013, I keep the 30 minutes lesson at $34, but offer 40 minutes at $40, so, 90% of the students now bump up to 40 minutes and they are happy with it. I am also happy with it because now I have more time to go for more material to teach.

I also revise my rate to lower it such as 60 minutes used to be $60, but now is $54, but I make it mandatory for level 6 and up to take one hour lesson. In the past when it was $60, it is not mandatory, so, not a lot of students are taking it.

Other than these, I am also offering new various discount such as:
Good student discount, top five from last year CM: 5% discount
Two siblings 2% discount
Three siblings and more 3% discount
Pay per year for 5% discount, from July 2013 to June 2014
Pay per 6 months for 2% discount, from July 2013 to Dec 2013, and Jan 2014 to June 2014
Yes, these discount can be combined.

Two families use the pay per year 5% discount, families with siblings are happy with extra sibling discount and also "GOOD STUDENT DISCOUNT" only reserve for top five students in my studio according to March 2013's CM test results.

At the end, I think I am at the combination of raising fee but also lowering the fee, a combination. At this point, my monthly income has been increase.

I am intrigued by this. Do other teachers have something similar? It rewards parents whose kids really put time and effort into piano practice. Makes parents really take part in their child's music education (or so I am thinking...).

How long have you been doing this and how has it worked?

These five students are so happy!! They are getting 5% discount for every month until March 2014, then with new CM results, there will be a new five students receiving this honor.
Parents of these five students are happy too!! Overall, because of this discount, most of my kids practice more this year to hope to make it to the top five in March 2014, so, it is an encouragement.
Car insurance company offer good driver discount, I got my inspiration from there. I been doing this since July 2013 and it works out just excellent!

From the article John linked to:

Is it even possible some of you did not know this has been happening for over two decades?

When I talked about what hit us here in 2008, when the "Great Depression" hit, mostly all I got back was: "Things are fine for us."

It took most of you another year or two to get hit, because South Florida got creamed first, in an obvious way, as the values of our houses were cut at least in half, and as we saw neighbors and friends leave the area.

We all barely survived down here, those of us who are still here. We have seen our adult children move home. We watch as companies hire people just long enough to use them up, before letting them go just as they would be eligible for benefits.

Anyone who shops for food knows that almost everything we are told is an outright lie. By the time you put gas in your tank, pay ever rising health care costs, shop for food, pay utility bills, pay car payments, the idea of "disposable" income is pretty much a joke for the people I know.

For the record, we raised prices last year. We may again next year. But I do a zillion things to help all the families I work with. I don't sneer at their entrance-level 61 key keyboard, or tell them that they won't really get anything out of lessons if they don't buy a grand next week.

We talk a lot about the money problems we are ALL facing. Life is hard now for most of us, and I get sick and tired of hearing people who are making 6 figure incomes talk about the rest of us as if we are not trying hard enough, working hard enough, making sacrifices.

If you want to improve your business, the best way to do it, as far as I am concerned, is to have a bit more empathy for the people who are struggling just to get by. Because if we are not yet in an equally leaky boat, we may be in 10 years, 5 years, or next year.

To Gary D. -- Amen, brother...

Yes and yes. This is the reality we live in.

I consider it a significant victory when I can get a family with 3 kids taking various music lessons to upgrade from a toy-like 61 key keyboard to an 88 semi-weighted Privia.

The Privia is a major upgrade musically, and, for some families, its $600 price tag is like 6 Grand. Or 60 Grand. (Dollars that is)

I wonder how that works. CM doesn't give out a numerical rating like RCM, and every level's theory test is different. You get very vague ratings like "Excellent" or "Good."

If this ranking system is based purely on theory scores, that might work. However, it's really easy to get 100% on the Prep and Level 1 theory test, but NOBODY gets 100% on theory tests past Level 6. So it's not a fair ranking system, either.

John v.d. Brook, I have read your post, here:

The Art of Raising Fees, Part II
John v.d.Brook Online content

AZNPiano, started a lengthy thread on this topic back in June. Just this past week, a friend of mine sent me this post from the Washington Post, a highly respected newspaper out of Washington, D. C.

The article says, "in inflation-adjusted dollars." I'm not entirely sure how to deal with this information. I've raised my fees roughly in step with inflation, that is, no increase for increasing experience or additional course work, knowledge, etc. But my clients are losing income. Not factored into this calculation is that every day expenses, like gasoline, is commanding a greater percentage of disposable income, as the price has climbed from less than $1/gallon back then, to roughly $3.50/gallon today. That is drastically more than inflation.

In any event, if the average family in the middle of the income spectrum has lost over $500/mo in disposable income, it surely affects extra-curricular activities for their children, especially piano lessons. I'm suspecting that the change in clientele I've experienced over the last 25 years can be explained, in large part, by this decreasing real income of American households.

The only practical solution I can see is to match our fees to real income of our clients. I'm loath to do that, as I'm sure you are, but as we get older, more and more younger teachers will be coming into the field, and charging rates which put them on par with their clients, leaving it harder and harder for older, experienced teachers, to maintain their income level.

Thoughts?

____________________________________________________________________________________________


Yes, my thoughts are: I am not a teacher,of course, but I am old - for whatever that is worth.

When I was a kid my parents told me everybody was on relief during the depression. When I was 21 starting my first job, I told a guy at work that everybody was on relief during the depression. The guy said, no, my parents were not on relief. They were rich. I learned a big lesson - early.

What I learned was that there are always lots of people with money. In fact, during the bad times, a lot of people become rich because - they have some money as opposed to no money to speak of so they can and do - do well.

I had a great job and made excellent money when I was very young. So I made the most of it and I coincentally had an excellent sax teacher and it was as I recall $45 for 3/4 of an hour over 20 years ago. An excellent anything - excellent teacher is worth their weight in gold!

There are advantages to living in a city because the resources are huge because of numbers, so it is easy to find work because rich people are too busy to do the small stuff so they hire trades people. But these rich people also want to live well, so they hire piano teachers, too, window washers, etc.

But also in the Yukon during the second world war and during the depression lots of people had money and did well, so even in small out of the way places, there are lots of wealthy people.

So it is using your resources in your area to make the best of a bad situation.

So, yes, the economy is bad, but it isn't bad for everybody.

Of course, I should mention that lawyers are a great example. When lawyers take a case, they charge regular lawyers' rates and then if they win, they charge lawyers' rates. But if they don't do well or lose the case, they often in some situations adjust the fees - their bill - but they can only do that if they have a good rich client base.

My life experience is that the nicest people/clients on the planet, have little or no money, but the richest, most powerful clients, have bucket of money but are busy making millions and are demanding because of the pace they keep - running lots of businesses.

So as a teacher or businessman, you have to decides what you want to do or how you want live your life.

Some teachers may not care what kind of students they teach because it is all about sending out the bills, but other teachers are fussy and so they may be more selective, both in the student and the rates they charge in all or some circumstances.

When I was in business, I cared about who I did business with because I didn't want to deal with jerks, but most people are not that way from my experience.

I am on a disability now so I can't afford a teacher but that is just fine because when I did have a teacher he was awesome and had high standards, I got my money's worth because everything he taught me applied to learning to play the piano. So I got what I paid for in spades.

And people who know - know to get the best and it is worth it. So no teacher has to apologize for their fees or rates.

As a young man my father told me - he was a self-employed contractor - and he said ask a trades man for a price on a job. When he gives you the quote, look at it, and if it sounds okay, have the work done and pay the man. If you try to get him to reduce the price, he will, but he will cut corners and you will lose. My father was right.

I had a contractor who I asked to make my soil in my yard fine like coffee grounds, because I didn't know what the word is for that kind of soil. He told me $250. I said okay. When I got home. He had done the job but it was not remotely like coffee ground. It was huge lumps the size of basketballs. He phone me to get paid. I said to him you didn't do what I asked you to do, but I will pay you, but I will pay you $25 a month until the bill is paid off because you are entitled to be paid, but if you come back and do the job properly like I asked, I will pay you cash on the spot. He came back the next day and did the job and I paid him.

cheers,

3S23PY

I'm thinking the teacher would figure a combination of their theory test score and performance rating, taking into consideration their age and level. You know which students work really hard and which ones just squeak by.

ANZ, if you look at your CM syllabus at page 16 and 17, you would know what I am talking about.
Performance is 50% and Theory is 50% in my calculation.

Naming 5 students who get the highest numbers on a test "good students" and giving their parents a discount does not address the problem of people being less able to afford lessons because of the economy.