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Does anyone have any suggestions for the best approach to inform parents that I will be raising my lesson fees beginning in January? I am sending a letter to each home, but I'm a little hesitant with how to tactfully state the information. Any suggestions?

I find it very common that when companies raise their prices, they go through great lengths to make the communication as tactful and palatable as possible. The fear, I think, is that customers may find the increase either unjustified or unreasonable and that they may choose to take their business elswhere because of price.

I don't see the psychology in delivering palatable bad news being any different for a piano teacher.

Most commonly, I see the following included:

- When the price increase will take affect
- An explanation of why the price was increased
- Verbiage to the effect of "we had no choice." (i.e. escalating costs have 'forced' us to institute a price increase)
- What the new cost will be
- Expressing gratitude for past patronage
- Thanking them for their continued interest/support

Hope this helps.

Whenever I raise my fees, I also do it in writing in the form of an updated studio policy. However, I tell all the parents in person one at a time; I find that sending the "fee increase notice" to their home address too impersonal. It is important to keep an open communication with all the parents. It is also important to make eye contact with them when discussing financial matters.

You might lose a student or two over fee increases. Keep that in the back of your head.

The beginning of January is just a few days away. As a parent, I'd be ticked that my child's piano teacher is raising rates without warning. Do you operate with a Studio Policy? Tuition is always spelled out in my policy, as well as any potential increases. I schedule my own tuition increases on a yearly basis, usually in September, as my 'year' runs from Sep thru June. Parents know in May that tuition will go up $xxxx in September.

Of course you can raise your rates whenever and however you'd like but I'd give parents at least a 30 day notice. It's just better communication and parents will appreciate that.

I would wait if at all possible to raise your rates even starting in the summer. One semester gives them plenty of time to either adjust or go elsewhere without any hard feelings. January is tough for more people, as this is when real estate taxes are due and all the Christmas bills come.

From a parent's point of view... if I may

Piano teachers are generally under paid as it is. My daughter's teacher only charges $20 per lesson, and she is absolutely wonderful, with a very good reputation in our community. Not sure why she is so inexpensive as she could easily get double that, if not triple.

However, if she came out tomorrow and said that she was doubling her prices I am sure most of the parents would go into shock, and be a bit upset.

I am sure when she started umpteen years ago she was charging fair market value, and has just never bothered to up her fees.

Our school board recently gave themselves a raise, from $3,000 a year, to $6,000 a year. It sent shock waves through the community, and was in the news for nearly a week. It was only a $3,000 raise, less than most of us get each year. But it was double.

So, to those who raise your prices incrementally each year, I think you are very smart. I think that most of your parents will understand.

Don't be apologetic about it. You are worth it. If you are not apologetic your students and their parents won't feel like your are doing anything wrong.

Just tell them flat out. I have to raise prices each year to keep up with rising costs. Don't make a big deal out of it, and it won't be a big deal.

JMHO of course.

I give my parents and adults 3 months notice that tuition is going to be increased on ________ (date).

My interview is about getting mutually acquainted, giving a lesson to the student, and handing out the studio policy packet.

Each student has a "starting date". Usually September, January and June are the months that I have inquiries to interview and put into my schedule. My fees are discussed in annual tuition with monthly or quarterly payment. In the last quarter of their annual study, I will give them the fee information for their next "calendar year" which transpires in 3 months.

I bring new students in during the time period the parents have been notified, and it becomes clear to my continuing students that this tuition rate is being paid by new students.

I would not effect a quick change for January since it really is January now. They need time to set it in their budget, or make a decision.

Depending on your experience and years of teaching, and size of studio, you need to plan now for future decisions you will need to make. If you have a small studio and are willing to lose the students you now have, the new increase in fees might not be a problem unless you have priced yourself out of the ballpark. You need to think about what you offer, and how that affects fees in your local area.

You must be aware that many families are struggling with mortgages and credit card debt at this time, and I think this has impacted my business in the last year. Do you read the business page headlines? If I were raising a family today, I would be aware of every expense, just as I was when I had children at home.

Search in the archives on piano teacher forum on the subject: "studio policies" or tuition fees", or, "payment"s. This subject has long come up in the forums and there is a wealth of info for you there.

I think we all will be affected in the next year or two and planning and decisions will be more important than ever.

Betty

menyquist - I am inclined to agree with the others that you should give your clients more than a week's notice. You could, for example, say something to the affect that in closing your books for the year, you realized that your costs had skyrocketed, necessitating an adjustment in tuition fees, which will be effective Feb 1st. That gives students the courtesy (okay, we all agree, not all of them deserve this!) of adjusting their finances to this unexpected new cost.

Good luck. John

Speaking of raises, I had increased my rates for this year quite a bit to get myself back to what was reasonable. But I have a desire to keep on top of things this time by doing small increments each year to keep up with the cost of living increases.

For those of you who do this, what do you use to figure out the cost of living increase?

Thank to you all of you for your advice! I guess I need to clarify that I was planning on speaking with each parent the first week of January and sending the letter out the first week of January (not raising rates in January), to be effective the beginning of March. I definitely am not that person that suddenly raises costs without any notice! All this information will help me with typing up a letter, and revising my studio policy. Thanks again!

menyquist, your private mail (PM) function is not activated. Other members, including myself, may want to send you comments/advice, so you might consider activating this feature.

By the way, welcome on board!

John

CPI Index .

Here's the one for your area .

I raise my rates every year in January. The amount you raise them is important. My raise is just a little above the cost of inflation. I wouldn't feel bad about that as most people's wages rise each year to cover the increased cost of living. Now if you are planning a large raise then that would need some kind of explanation.

Thanks Akira and Chris. I'm planning on keeping on top of incremental raises each year that may not amount to much, but it will save me problems of raising large chunks in the future. Akira, how exactly would I use the chart you referenced there? Let's take for example 2006 (since 2007 hasn't yet been determined for the year). I would take the CPI for the year (in this example, it was 1.9) and increase my rates by 1.9%? In some years, the CPI went down. Of course I wouldn't decrease my rates as a result, but people are given raises each year not according to the CPI. Many companies go depending on what your salary is vs. the median for your field of work, and the raise can range anywhere from 3-10% (although, I don't think anyone gets 10% raises these days). Any other suggestions?

Inflation...

I think around 5% increase per year is fine. This is a little more than most public sector workers (in the UK) get. It doesn't add that much to each student's monthly bill but if you teach over 30 students like I do it amounts to quite a lot.

Van, I just have to say that I love your Avatar! LOL

Raising your rates in January is fine (or at anytime), except, like others have posted, I also would give at least a months notice.

Here in Oregon, the cost of living is 3% (I think), that is what I've been going by every year, raising my rates accordingly at the start of lessons in September.

I think 3% sounds a bit more reasonable for the economy here in central WI, and it wouldn't be anything that people would even notice financially, but it does add up. It is also considered an average raise for employees.