Afraid Of Raising Your Prices?

By Studio Growth Coach, Kristy Ellis

If I Had My Tine Again…

Hindsight is a wonderful thing. What’s even more wonderful is that you can turn hindsight into insight. Experience has the potential to be our best teacher, with hindsight playing a vital role.

Sharing hindsight should be shared so that others can achieve their dreams in more effective and efficient ways.

As with huge life choices, once the business sold, there was months of analyzing every. single. decision. Something would come up that would trigger a memory, a choice and a thought “would we have handled that differently?”

One of the toughest things I had to learn was that no one cared about my business as much as I did.

I mean, I knew it and of course it’s been said a hundred times before but it really took me a while to really understand what it meant.

Parents were there for the classes, not for me.

After sharing my story with Inner Circle members at the Melbourne retreat, there was one “aha” moment that I would like to share with you. This story is very personal but one that best describes what this means and the background for writing this blog series. The reason for selling was a very personal, life changing experience.

The one word that will change your life … “Cancer”.

My cousin was a huge part of the business and had been diagnosed at the age of 27 and passed away three years later. The studio had gone through the journey with us, commented on every post, held fundraisers. We thought the parents would have perspective on our decision to sell the studio. Quite the opposite.

In fact, after the sale of the studio, a total of five parents called to see if we were okay.

Even though our team were amazing and kept the studio running, there were horrible comments made by long-term parents about the inconvenience of cancelling the annual performance meeting the week of the funeral and that we should quickly “get over it” as it was unprofessional for the owner to be away for two weeks at the start of the dance year.

If anything can be learnt from my experience, it is that students are coming for your business. They are not your friend. Of course, you need to have empathy and truly care about your students in class, but taking emotion out of your business decisions will make the journey of studio owner so much easier.

I see so many studio owners reeling over a slight price increase or questioning making money at the recital.

STOP being emotional.

Your studio needs to be successful. You and your staff deserve to be paid according to your role in the studio. Customers want to invest in a successful business. They want to know the studio is doing well, growing, making a profit that can benefit the students with amazing teachers, wonderful workshops, brag-worthy recitals. Taking the emotion out of the money is your first step to creating a thriving studio.

Do NOT be afraid of raising your prices.

Do you sit for hours worrying about what the parents will think of raising your class prices, merchandise, costumes, recital tickets? Perhaps you are concerned that customers will leave to go to your competitor?

“Sometimes, business leaders are so fixated on their customer happiness that they fail to see the bigger picture”. Stop thinking FOR your customers and assuming what they are willing to pay.

Of course, it is normal to feel nervous but there are several reasons why you need to raise your pricing.

You need to grow your business, instead of always trying to win new customers. It has been said before but necessary for studio owners to understand that it is more expensive to gain a new customer than to invest in your current student database.

According to the Consumer Affairs office in the White House, acquiring a new customer is at least 6 to 7 times more expensive than simply retaining existing customers.

Quality is better than quantity.

As businesses grow, so do their expenses. Teachers, admin staff, facilities. This saying also relates to your customers. Finding your “ideal student” is a key factor to the success of your studio. By raising prices, your low-quality customer will leave, with those customers remaining who know you’re worth the value they are paying.

Know your value.

Stop discounting your product and remember to take into account your own experience and knowledge.. Customers will think they are getting a better quality product because they are paying more.

Look to the future.

By raising your profits, you will be able to deliver better quality customer service, better facilities and overall a better product. Your customers will be happier and so will your staff.

Tips on changing your pricing model. 

• Invest in your customer service team. On average, most customers will change to a different service provider because of poor customer service over price. Spend time with your team, survey your top studio parents and look at how you can add to your customer service experience.
• What can you include? Offering a high-value item will soften the blow of a price increase. Something that can be offered at little or no cost, such as trending merchandise will also raise brand awareness for your studio. Keep in mind that it is in addition to your service, not to discount your product.
• Focus on the value. Keep reminding customers why your service is the best and that you are doing all you can to improve the customer experience more than caring about how much they spend.
• Complaints are the minority. Keep perspective. You may get a few complaints but overall, and in most studio owner’s experience, complaints are a small percentage. Remember, any loss from leaving students can be compensated by increased profit from higher prices.

If you are looking for more insights, support and resources to help you grow your studio and reclaim your life, there is no better place than right here in the Dance Studio Owners Association.