Increased fees - family expressed concern

Posted by: eccp19

Increased fees - family expressed concern - 01/10/13 08:42 PM

Hi Folks,

Need some advice. I recently increased my fees for a 30 min lesson from $20 to $22. I don't want to get into the details but I felt that it was time to increase my rates. Tonight at lessons, a mother of a family of three I teach expressed to me dissatisfaction with the fee increase because as I understand, she believes there should be some sort of "tier" discount for 3 students in one travel (I travel to teach). She told me that another family of three I teach also feels the same way (both families I teach are mutual friends). I was a little taken aback and said I would take into consideration her concern. On the one hand, I can see it is common for businesses to give discounts for increased business transactions and I don't want to lose the income from these families. On the other hand, the question is, which student is deserving of a "cheaper" lesson? I would appreciate teacher's who can relate to this experience. Thanks
Posted by: Kreisler

Re: Increased fees - family expressed concern - 01/10/13 09:54 PM

What's your business model? Do you charge extra for traveling? Are there sibling discounts? How long has it been since you last raised your rates? How much notice did the family have? Do they pay monthly or tuition by the semester?

$2 x 3 kids x 4 weeks is $24 extra per month

So the perception could go both ways - on one hand, $24/month is pocket change for some people; for others, it can be a decent amount of money. It's also a 10% tuition hike. That's a pretty steep percentage, but if it's been 4-5 years since you raised your rates, that's only 2% a year, which doesn't cover inflation, so they've actually had a bargain for the last few years. Also, in most communities, $22 for a 30 minute lesson is still pretty cheap, especially given that you travel.
Posted by: Peter K. Mose

Re: Increased fees - family expressed concern - 01/11/13 12:40 AM

Here's a way to view this.

The fact that you teach in students' homes is, I believe, not pertinent. Because, unlike our friend Scott Coletta, you don't also teach in your home.

So it's not as if you have two different price structures - one for your studio and one for in-the-home lessons. Instead you just have one, and on Jan. 1 (or whenever) you raised it. By ten percent. And two families that were used to paying $60 a week for lessons are suddenly confronting $66. And one mom has mentioned this, hoping to get a break.

Just smile sweetly and say there is no travel fee, but lessons are simply now $22 each. You felt it was time to raise your rate, and you did. If she wants one of her children to end piano lessons, tell her you would be sorry about this, but you would understand, since you realize that for some people $22 is a lot of money.

As Kreisler has suggested, I do hope you gave your families some advance notice about this increase. If you did not, and even moreso if people pay you each week, you might have a tougher time staying firm.

If you want to get into the messy business of family discounts, you can. But it sounds like you have avoided them in the past, and I'd say good for you.
Posted by: Morodiene

Re: Increased fees - family expressed concern - 01/11/13 08:32 AM

Did you increase your fees to cover the travel costs, or was it just a regular price increase? In the latter case your time is worth what it is worth. Your rate is $22/half hour, and that half hour is not including your driving time.

This family was previously paying $20/half hour, and getting no discount for 3 kids in one home. Now that you are raising your rates (and who knows when the last time you raised your rates?), they suddenly want a cheaper rate for having 3 in the home. Why suddenly an exception? And for how long? If you raise your raise on a regular basis, will she insist on staying at the $20 rate? At some point this becomes absurd.

In the case that you said you were trying to cover your travel costs as the reason for the rate increase, then they should consider that if you did not have those 3 kids at one home, you would have had to raise your prices further to cover the additional travel costs. You calculate our hourly rate (hopefully) based on what you need to make to survive after business expenses are paid. It's one lump sum dollar amount (gas = $250/month for example) that gets spread out and evenly divided among your entire studio.

Sometimes explaining that to families from that standpoint allows them to see that what they're asking isn't good business practice.
Posted by: Scott Coletta

Re: Increased fees - family expressed concern - 01/11/13 10:38 AM

Peter mentioned that I teach both in my studio and traveling to students, which gives me two different rates. This is true. But my travel rate is still set up as a flat charge added to my studio rate. Currently, my rate is $27 per half hour lesson in my studio, and my travel charge is $18. So if you had a 30 minute lesson in your home it would be $45. But if you have an hour lesson it's $72, and an hour and a half is $99. I did it this way when I didn't have a studio as well, but the rates where lower.

Perhaps you can re-structure your fee so that you are charging $20 for a 30 minute lesson and then add $3 as a travel fee. Your 30 minute students will pay $23, your hour students $43, and your 90 minutes $63. Depending on how many students you have in each category it may work out about the same anyway. Just write a nice letter to your students explaining that you've decided to modify your fee structure to make it more practical. Basically, you only drive once for every household, regardless of the number of students there. So it makes sense that each household pays the same fee for the driving. Once you set this up, you can easily raise your lesson fee or driving fee as needed going forward.

I just find it's helpful to keep these things separate. What I ended up doing is over a period of a several years when I only drove to students, I found that the average time spent driving between students is 20 minutes. So I set up my driving fee to be 66% of my half hour lesson rate. You can explain this to your students in your letter. The more transparent you are, the easier it is for them to understand.
Posted by: bmbutler

Re: Increased fees - family expressed concern - 01/11/13 11:04 AM

Stick to your policy. I raised my rates by a couple of dollars two years ago. Not one person said a word including two families with multiple children.
Posted by: Overexposed

Re: Increased fees - family expressed concern - 01/11/13 01:18 PM

eccp19,

I would consider telling the parent this: "I do not currently charge students a travel fee. It is a fee I am considering adding to tuition starting in July. If I do start charging for travel, I assure you that your family will only have the fee added for one student."

Edit: I think there are several good ideas in this thread. You could simply leave your policy alone. Or have separate charges.

Overall, I think the parents are being petty. I think you have to be the judge of how best to keep parents happy. (Or when to not worry about it.)
Posted by: Overexposed

Re: Increased fees - family expressed concern - 01/11/13 03:37 PM

deleted due to info being misused
Posted by: Overexposed

Re: Increased fees - family expressed concern - 01/11/13 03:57 PM

deleted due to info being misused.
Posted by: PianoStudent88

Re: Increased fees - family expressed concern - 01/11/13 04:20 PM

Ann, your reply raised a thought for me which I've posted on the why won't students ask their teachers? thread.
Posted by: Overexposed

Re: Increased fees - family expressed concern - 01/11/13 06:17 PM

I think any question can be asked without being offensive about it.

I think the OP did well to say he/she would take the question into consideration.


Edit: The parents want to argue that they are saving time for the teacher. They are overlooking the fact that they receive the convenience of an in-home lesson for EACH child.
Posted by: Overexposed

Re: Increased fees - family expressed concern - 01/11/13 08:03 PM

Originally Posted By: PianoStudent88
Ann, your reply raised a thought for me which I've posted on the why won't students ask their teachers? thread.


Your reply raised a thought for me also.