rate adjustments for the new year

[monkeyb]

Hi Everyone:

I have some questions regarding rate adjustments.  Every year when I accept new students, I'd adjust my rates (increasing it by 1 or 2 dollars per hour) so that they will be more aligned with the current market rates. However, I did not adjust the rates for my old students.  After a few years, I realized that the differences in rates between my old and new students are getting bigger and bigger, so I asked for a rate adjustments. Most parents are quite understanding and they found the adjustments acceptable.  There's also one family who is debating whether they would quit as the parent has kindly told me that she believed her girl is not committed enough to move on (which I totally agree with her).  However, there's one family who tried to bargain with me.  If I would like to insist on the adjustment, are there ways to do it professionally?

Thanks in advance for all your advice~

[outin]

  If I would like to insist on the adjustment, are there ways to do it professionally?

You definitely should. Just tell them you are a professional offering a service. Occasionally prices have to be raised as with any other service to cover for costs rising.

[visitor]

Rate adjustments are normal and fair. If a family tries to bargain the offer them one it ensure it is a win win say perhaps offering the lower per hour rate but at a commitment for a longer lesson or an extra session each week.  This way your total revenue for that account goes up while the student increases the value they receive.  This is fair and doing a by volume price adjustment in exchange for greater trial revenue is a normal standard business tool as you will prove total final profit as this is usually more important than simply your margin

[monkeyb]

Thanks both outin and visitor for your advice

I explained to the parent that the costs are rising and that the market rates have been up.   Lengthening the lesson with that particular parent will also be tough; she will think that I'm trying to get even more money from her....  

To be honest I'm very glad to have found the forum.  I know some other piano teachers in town but it seems impolite to ask them how they handle issues in the own studios, esp when they work close by

[quantum]

IMO it is better to have a single rate for all students.  If parents end up talking to one another, you will end up having to do a bit of explaining if you are confronted on the matter.  One scenario where variable rates is an option is with traveling teachers: a base rate + travel expenses rate. 

The beginning of the school year is a reasonable time to raise rates, as there are many things that are being refreshed in your student's lives.  Send out a letter to all your students several weeks in advance, explaining the raise of fees. 

If a parent tries to bargain, I would not recommend modifying the fee.  Instead offer added value for the standard fee.  Don't sell yourself short, you are a professional that has committed years to study and deserve to be compensated accordingly. 

[monkeyb]

Hi quantum:

Yes, having a single rate for all students is a lot better.  After a few years, my experience has told me that those who pay the lower rate actually care less about their lessons, and they tend to ask for more (like changing lesson time, cancelling at the last minute, etc etc). Yes, I have a policy, too, but sometimes people will try and ask for an exception....I hope adjusting my rate wil fix some of these issues.  After all, I love teaching children the piano.  I love the musical aspect of my work, it's just that the administrative burden is dragging me down~