Raising rates

[kateb]

Hi all,

I want to raise my rates from $20 to $25. I realize that this is a big jump, but I feel that it is fair for the job I do. It is also reasonable in my area of the country where teachers charge from $20 - $30 for half hour lesson.

My question is this: how do you present rate changes? Do you go into explanations of why and how much uncle sam gets etc. and that rates will not change again for x number of years...or do you just send out a letter that says, "hello, as of September 1, my rate will be X per lesson. Thank you."

Thanks in advance,

Kate

[ludwig]

Hello kateb, is this per hour rates? in american dollars? I've got a few friends who just tell their students when they have a piano lesson that the rates are going up a little because of a few reasons. I think they just made it casual and if the students could not afford that rise, then they'd discuss it and came up with a better rate or plan.

[pianoannie]

Kate,
  I would say it appears rather unprofessional to explain why you are raising your rates.  Does your doctor explain why his fees occassionally go up?  What about the grocery store or the electric company?  Increases are a fact of life, and I think people expect them from time to time.  With that said, I will add however that a 25% increase seems like a lot all at once to me, but if you are prepared to possibly lose a few students because of it, it's your choice.  There must be some huge geographical differences in piano fees, because I don't know of anyone in this area who gets $20-30 per half hour around here (midwestern US).  If it's common in your area though, and you feel that what you offer to the students warrants that range, then maybe even some smaller increases over the next 2-3 years would get you where you want to be without such "sticker shock" to the parents.  Just some thoughts.

[kateb]

Yes, it is $20-30 per half hour, and those are the rates recommended by my local mta. I am very interested to hear what rates are in other parts of the country, as I don't plan to stay here (Northern VA, just outside of D.C.) forever. I live in an area that has one of the highest costs of living in the nation, so that probably accounts for the higher recommended rates.

I realize now that I should have started out a bit higher, but I guess that hindsight is 20/20.

Anyway, thanks for the replies and please keep them coming.  :-)

[dinosaurtales]

I know out here they charge $20 for a half hour for an adult beginner.  I am going to start shopping around for an instructor / coach, and I won't be surprised to hear $75 an hour plus.  That's in Oregon, USA.  I'll letcha all know what I find out!

[princess]

i'm having the same problem as kateb.  i started teaching at a nearby elementary school and i get paid $15.50/hr...and these students are registered thru the school. i took some of them as private students over the summer and they're still my private students currently...even tho i only hold a gr 8 certificate, my students and their parents aren't concerned.  i'll be taking my gr 10 in a couple months and i want to drastically increase my price to $25 cuz of living expenses and i'll be attending post-secondary in sept '03.  i don't want to lose my students b/c they're terrific students....and their parents aren't exactly rich since i live in a middle-class area.  should i keep their price the same and just start charging $25 plus for future new students?

[vanguard99]

To my knowledge, the rate around here (South Jersey) is $20-$30 per half hour.  I am slightly lower than that because I started out too low years ago.  I have gradually raised rates $2.00 every 2 years on current students and they don't have any problem with it.  Most have never had a piano teacher and I've found out that they had no reservations about rate increases.  They get raises or cost-of-living increases every year and didn't think any differently towards teaching rate increases.  In other words, it was my own concern that was the problem not the actual sentiment of the community.   I will qualify this, however, most of my students are financially secure.  

I decided to take NEW students at the full rate I want to receive.  I tell new students who were referred by other students, that they will pay a higher rate than the one who referred them (and I mention it to the referring family because I'm not sure if they gave my rates out.)  Then, I say that the good news is I won't increase their rate for a few years. It causes those who have been with me a while to very much appreciate me because I considered their loyalty and at the same time moves me into the rate I am looking for.  Plus, the new student feels good in knowing that the rate will be the same for a few years.

[angelucci1]

Hi there,

I think it's best to effect a rate increase at the beginning of the year only.  This will vary depending on when you consider the new year to begin (some teachers go by the holiday New Year, others by the academic year).  Staying "competitive" with other teachers in the area is good business and fair practice; most people will respect this, as long as the increase is reasonable.  Small, gradual increases over time are not uncommon at all ...

One thing: if you're only charging $20 per half hour while others charge double that for an hour, you've already priced yourself too low! A sudden $5 increase is a big jump for 30 minute lessons.  I suggest a more gradual increase -- $2-3 annually -- and over time slowly raise your rates.  Take into account the area in which you live and the economic status of your students.  And try talking some of your older students into hourly lessons ...

Good luck!

[kateb]

Hi there,

I posted the original question, and I just wanted to follow up. I did make the change, at the beginning of the school year (last September). I sent out a letter to all parents so that they could recieve the notification in the privacy of their own home and not have to act polite in front of me.  

In the letter, i stated that after running the business for one year I learned that I needed to charge $25 per lesson in order to make it work. I also promised that a $5 increase would not occur every year. (I almost wanted to promise that there would be no increase the following year, but I decided not to make any promises like that. Still, I do not plan to raise rates next year.)

Not one student complained or quit.  

Yea!

[artist]

Interestingly my piano teacher that I had throughout my teens did it this way : She never "raised " her students'
rates. But upon taking on new students, she would charge these a rate based on the current value, accounting for cost of living increases. So in actuality, students who had been taking lessons with her were still paying, for example, $15, while new students starting today will pay 18$. She kept track carefully in a record book of who was who and how much they paid, and she never asked for the "wrong" fee  from me. I did not know that she never raised a student's fees until I had taken from her for 2 years, it came up, incidentally, in con versation

While this may seem somehow not fair at first , it is fair and does make sense after thinking about it this way.: She was rewarding established students for their loyalty to her by never raising their rates unless the quit and tried later to start up again.
Of course all of this would only benefit you as a teacher if you teach full-time, and therefore have enough "turn-over" to get a raise in your actuial total teaching income...
Just a thought

[glamfolk]

Don't feel like you have to explain yourself when you raise your rates.  In the rural midwest, I just switched from $8.50 to $10 per half hour, but I know in Chicago teachers are getting $45 for a 20-minute lesson.  I always feel a little guilty, and so I feel I need to explain myself, too, but people are really understanding.  I know when it's time to raise my rates when I start getting raises from some of my families.  

[reinvent]

Another way to make raising rates less stressful is to include withint your studio policy that rates will be slightly increased from time to time to accomodate the cost of living.
 Most people understand that.

[kulahola]

Raise rates to students you dont really care about. I never raise rates to talented students i have had a long time.I never remember any teacher raising rates for me.

[Hmoll]

Send a note home with the students about your new rates and when they are effective. YOu may or may not  include a ratonale for why you're raising them.

It's a bad idea to raise rates for some students, but not others for anyting but a case of need. Word gets around.

[Saturn]

It's a bad idea to raise rates for some students, but not others for anyting but a case of need. Word gets around.

Not sure if I agree here.

A while ago, when I was taking viola lessons, my teacher (who taught both violin and viola) was starting to have quite a few students, and a sizable waiting list.  He decided it was necessary to raise his rates.  I think the rates went up from $20 to $30 per lesson.

Now this is a VERY big rate increase.  But there was a catch.  Each new incoming student would be paying $30 per lesson.  The existing students would be given a rate between $20 and $30 depending on how much they practiced.  He didn't need to keep practice logs or anything for this, because he was very good at judging how much a student practiced (and he would often ask).  You couldn't bullshit him.

You'd think there'd be complaints of unfairness.  But somehow it all worked out.

- Saturn