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    16 Replies Latest reply on Mar 2, 2010 3:31 PM by datism

    How do I raise prices without losing customers (students) and discouraging new contacts?

    ProDefense Newbie
      I teach Martial Arts. I am constantly struggling to pay the utilities, mortgage, taxes, and insurance. I think I have two main problems. First, I have trouble getting new students. I advertise in the local paper, do demonstrations at schools and churches, and I continue to seek ways of improving my instruction so as to keep the students interested once they join. Very few people in this area have computers in the home so I am not sure a website would help. Second, I don't charge enough to keep up with the bills, insurance, licenses, equipment, etc. This is a very low income area. I charge only $5/class and have for years. Most students come to only one class a week because that is all they can afford. A few come twice a week. I have had many walk away because they thought even that was too much. If I raise my prices even a little, I am afraid I will lose many of the students I have now and will discourage other,already hard to get, students from joining. Although I feel very satisfied making a difference in people's lives (I could tell some wonderful stories), I can no longer continue doing business this way.
      I need some help.
        • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
          LUCKIEST Guide
          ProD, Thanks for sharing so much. To succeed in business you need to develop both a Business
          and Marketing Plan. In your advertising use the word FREE. Give something away.
          I understand that feel very satisfied making a difference in people's lives.
          Where is this business located and why did you pick this very low income area to open??
          Do you have an Accountant?? Finally, what would you do if you closed the Martial Arts??
          This is just the start. As you answer the questions and other members add more data, hopefully
          we can help you succeed, LUCKIEST
          1 of 1 people found this helpful
            • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
              ProDefense Newbie

              I do have Business and marketing plans. In my advertising I offer the first class free and a free uniform upon joining. My school is in Cross City, Dixie County, FL.
              I chose this area for two reasons. First, I love the small town atmosphere. I live in the woods surrounded by nature, rivers, and the Gulf of Mexico. Everyone here is very friendly, caring, and family oriented. Second, the kids here are small town kids dealing with big city issues. Drug dealers, bullies, and child predators are crusing through this area more and more. It's almost like this area is "ripe for the picking" for those types. I am trying to help these kids and their parents be aware and how to handle these situations. I work closely with local law enforcement, in fact, I have three officers in my adult class. They let me ride with them when they are on duty so I can see first hand what my kids are being exposed to so I can better prepare them. Yes, I do have an accountant who keeps telling me to raise the rates.
            • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
              mourak Wayfarer
              how long you have been in the business? and give me some number(how much you spend every month,how many student you have:)
              maybe i can help(what (state,city)
                • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                  ProDefense Newbie
                  Mourak, I have been in business for 15 years. I currently have 22 students, 13 of which come twice a week. The rest come once a week. Which means I am bringing in about $700/month. I am spending an average of $450 on bills, insurance, advertising, etc. That doesnt leave much to put back into the business, never mind making a profit. I teach in Dixie county, Cross City, FL.
                    • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                      LUCKIEST Guide
                      Pro, as I read your last response, "You teach"
                      We need teachers and teachers get paid a salary, so that this is a side business (maybe)??
                      Having a business that loses money is great at tax time. RIGHT??
                      • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                        mourak Wayfarer

                        first of all I'm sorry I couldn't replay so soon,and second of I look at your number and your location(I live in fl too),it seems to me very clear that you need big support from your community(events,.donations,....),plus you need to add some products to your service as selling (chines tea, creams for health problems,....)
                        others ways,hopefully this All help from me and others .
                        • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                          MetroGal Adventurer

                          Just to clarify - when you say it's $5.00 a class - it is just $5.00 a class? Or do you offer class everyday/several times a week and if a student took advantage of all the classes in a given month, it would end up costing only $5.00 a class?

                          I think it's normal for a martial arts studio to only have students that come once or twice a week. In fact, I think it's normal for most gyms. With work, school, etc. it's hard to show up every day. Your issue does not seem to be frequency, but volume of students needed to generate more revenue if you do not want to consider changing your pricing structure. Here are some options to consider, if you have not already:

                          1) Have you considered revisting class schedule? There could be better times to offer class for adults vs. kids vs. teens.
                          2) Have you considered adjusting course offering by level or age group? For example, a new comer with no training is not going to enjoy class if they are in the same class as someone who has a Blackbelt for instance. Likewise, the Blackbelt will get frustrated if class has to slow down for someone who is new.
                          3) If you offer class too often (e.g. everyday) that could actually discourage someone who can only go once a week, and doesn't want to be in the same class as someone who comes 3 times or 4 times a week. I would say that most people are probably only able to come once a week.
                          4) Are you offering a breadth of classes that is of interest to existing and new students (e.g. sparring, performance practice, forms, cardio, etc.?). Or do students not know what to expect each day, or is it the same always?
                          5) Lastly - how are your general facilities - is it clean, accomodating to men/women?

                          Best wishes. The great news is that it's January which means that many people are thinking about fitness so it is perfect timing for a burst of advertising.

                      • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                        slavaret Adventurer


                        Tough to combine business and charity. You must turn a profit to stay in business. Just some random thoughts:

                        1) Perhaps, you could separate business from charity? Look into a non-profit status to qualify for grants, save on taxes, get breaks form local utilities? You can still pay yourself a decent salary from the budget.

                        2) Borrow a page from the corporate world. They are not raising prices - they are passing the costs through to the comsimer in the form of surcharges. If you explain to people WHY you have to raise prices - theu will understand.

                        3) Find a way for "dynamic" pricing? - I.e. charge ppl what they can pay above the minimum without advertising the pricing? Most online buisnesses do that.

                        4) If you want to continue to pay $5 - bring a paying friend.


                        Otherwise I'd move to a better location where students/parents can afford to pay more.
                        1 of 1 people found this helpful
                        • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                          LUCKIEST Guide
                          ProD, Maybe this will help:
                          h3. 6 Steps to Small Business Success

                          1. Start Smart
                          2. Plan Ahead
                          3. Set up Systems
                          4. Seek out Sales
                          5. Aim for Growth
                          6. Leverage Opportunities



                          1. Start Smart.
                          Identify a niche. Don't compete to be the lowest cost provider. Look
                          for what makes your product or service unique and adds a special value
                          for the client and charge for that value. Every business has many
                          facets. Start with what you know and like; start a business that has
                          meaning to you. Keep in mind that we don't know what the future holds,
                          many of the jobs and businesses of tomorrow don't exist today. You can
                          create your own success.


                          Now is the time to dream. To start smart, you should like the idea of
                          the business. The way to earn a good income and build wealth is by
                          serving clients well, making their life better in some way-it's more
                          than filling a need in the marketplace. To succeed you want to test the
                          idea to make sure your potential clients like the idea too. Test your

                          2. Plan Ahead.
                          People often ask me why bother with a business plan? Look at the
                          lottery as an example. You may get lucky and get the winning ticket,
                          but the odds are against you when you rely on random chance. I'm a risk
                          taker...but not that much, minimize the risk of going into business and
                          maximize your potential for success. Take the time to write a plan of
                          how you get from point A to point B. A plan gives you a clear future
                          focus and increases your chances of success.


                          The first rule of a start-up is put some of your own money in the
                          business. As the owner you must be willing to capitalize the business.
                          The second rule is put as little of your own money as possible in the
                          business. Prepare your plan and look for funding for your business from
                          multiple sources, which can include a business loan or business line of


                          Don't go it alone. Plan ahead now to build your team. Your team may
                          include a CPA and an attorney that you work with as needed. Add a
                          mentor from your industry and get a SCORE mentor to help you plan for
                          success. No one has all the answers. You get more ideas and information
                          by building a success, support team that can help you plan ahead.

                          3. Set up Systems.
                          The most basic system every business should have is a good financial
                          system. Ask yourself how am I going to generate enough income to
                          support myself and my family. Begin here. Put together a personal
                          budget, so you know what it costs you to live. Now, you can move on to
                          the business budget and sales planning, so you can see how many sales
                          you need to break even and make a profit. The start-up expense plan,
                          operating budget and your accounting software are vital to your



                          4. Seek out Sales.
                          The daunting question is how do you go about seeking out your first
                          sale. Recognize that since you don't have a big ad budget to be seen by
                          everyone, you need to target a niche and get connected in your market
                          community, be it local, regional or national. You need other people
                          selling for you-not employees-goodwill referrals. Get out and talk to
                          as many people as you can. Join organizations that would have clients
                          for your product or service. Become a visible part of your market, and
                          then ask for the sale. You begin the sales process with people that you
                          know. Yes, it's okay to start with friends and family as your first
                          customers, and then broaden from there.



                          5. Aim for Growth.
                          The basic tenant of creating a company is that you own the company. You
                          are not just creating a job for yourself. It's less risk and less
                          investment to get a job. Building a business is creating a company that
                          is more than the job itself. Think about the future. How large do you
                          want the company to be in terms of sales, net profit and employees?
                          Your answer to each of these questions will influence how you grow.
                          There are varying costs and profits associated with growth. It's
                          important to make a deliberate choice early about how you want to grow
                          your company.


                          6. Leverage Opportunities.
                          Good luck. Good fortune. Good timing. All play a part in business. As a
                          business owner, be very clear about your core focus for the business
                          and how it serves clients. Your core business is what pays the bills.
                          Then, as an entrepreneur you are about opportunity. When you see a
                          potential opportunity or stroke of luck measure it against your core
                          business focus. Good fortune is great, when it matches your vision for
                          the business. Always consider if a good opportunity is the right fit
                          for your business. If something looks great, but it's not in sync with
                          your long-term plan and budget, think carefully before committing your
                          company's resources.
                          • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                            Y Not Mag Newbie
                            Hello ProDefense,
                            1. Have you ever considered advertising in a middle-class neighborhood, receive a certain amount of pre-deposit money, then move to that new location. I think that you should have a certain amount of perspective clients before investing the money to move. I think that this will be a wise business decision. 2. Do some homework and find similar schools with monthly packages and make some of your own packages to advertise before moving to your new neighborhood. 3. what type of martial arts do you teach? Are you in the New York city area?

                            Y-Not Magazine LLC
                            • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                              Lighthouse24 Ranger

                              In a low income area, and especially one that is somewhat isolated and rural, transportation is often the problem for youth activities. The parents might readily pay your fee to have the kids in the program, except they are working and can't get them to your place or back home. You can look at the area and see if that might be the case. If so, I wonder if starting a bus route to maybe bring kids from their school to your dojo and then take them home might be feasible. I know it adds a cost, but perhaps it would increase your revenue enough to justify it. It might help qualify you for some grants and state funding, as well.

                              Along those lines, you might also consider approaching the director of any United Way or state funded charities in your county that serve at-risk children to see if maybe a partnership or alliance could be formed. I don't know what that alliance would be exactly, but maybe several people with a common mission in the same town working together could come up with something.

                              Finally, if you haven't already, do a little investigative probing with families around the community to ensure that your lack of attendance is really just a pricing issue. When I was a kid, I attended a Boys Club that was run by a man who was and still is considered a saint in that community -- but he was evidently clueless regarding the club's own gang of bullies (and some of the things they did in dressing rooms, the parking lot, or even at school that scared a lot of boys away, especially the smaller and younger ones who really would have really benefitted from the programs). Obviously, I don't know you, so PLEASE don't think I'm accusing you of running a sloppy or unsafe operation. I'm not. To me, you seem to be a very dedicated individual who is offering valuable training at an almost ridiculously low price -- so I'd simply want to make sure that price really IS the sole issue that's keeping potential students away.

                              I wish you the very best in the New Year.
                              • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                                Bluesuit Adventurer

                                Let me ask you the question in reverse: Do you think the low price could actually be discouraging new students? Personally, if the cost is advertised too low - - I would question what I was getting in return and would not be interested. I know this sounds counter intuitive, as you may assume low = more enrollments, but it is not necessarily true. For example, in California there are many martial arts schools that are located in lower income districts - however the class prices are just as high as the higher income areas because of the quality of the instruction. So, just because you are located in a lower income area it does not mean that the fees need to reflect that.

                                It's great that you are concerned about affordability and giving back to your community vs. generating a profit. But, you also need to keep paying the bills. Here is my idea: Have you considered offering a "residents only discount," this would allow you to continue to give back to your community, while at the same time raising your rates to others outside the area that could afford to pay more?

                                Good luck.
                                • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                                  guru2008 Wayfarer
                                  want to grow your business in Dixie County. Demographics definitely are not friendly in your favor a post from lighthouse24 at 3:15am and mourak at 9:15 pm put some good ideas out their, Furthermore as a Director of a local Charity getting donations, grants,families,sponsors,volinteers.can be challenging, profitable, and fun at the sometime you might enjoy your "Great Purpose" with Charity in mind and enjoy this style of business model better and find it more fulfilling with that said....If you continue to run the Business Model have been you most likely will need to move closer better demographics and in that case i would suggest working for a very successful venture first even if just to get modus operandi.
                                  • Re: How do I raise prices without losing customers (students) and discouraging new contacts?
                                    Y Not Mag Newbie
                                    I happen to also like Bluesuit's feedback. I hope that we all helped in some way. Please provide feedback/updates on your new strategy. Good luck to you. To bad you are not in my area)

                                    Best Regards
                                    Jamila A. Serrant (Owner/Founder)
                                    Y-Not Magazine LLC (Opens dialect between Single Men & Women)
                                    Telephone: (718) 514-5924