In this blog post my goal is break your current belief system in hopes of getting you to see a new perspective about your tutoring prices.
You may feel resistance to a lot of the things I discuss here but that's totally normal! The first time that I increased my tutoring rates...I was very anxious and worried that no one would pay me what I was asking. Little did I know...
Not only did parents pay me what I was asking...They were also happy to do so because it allowed me to provide a better service! (More about that later)
Let's dive right in.
"If you're not the cheapest tutor in town, be the most expensive"
The first thing that I'd like you to understand is that there is no strategic advantage to being the second cheapest. If your strategy isn't to be the very cheapest tutor in town and try to win people's business by being the most affordable...
Then there is no advantage or benefit to you by being the second cheapest.
What does this mean?
This means if your strategy isn't to be the cheapest then you might as well be the most expensive!
Pro tip: I never recommend being the cheapest tutor in town! Why? Because if you're the cheapest tutor and then someone else comes in to compete with you and is even cheaper...You'll have to lower your prices and at that point it's simply a race to the bottom.
If you aren't charging enough to take care of your customers and make enough money so you can take care of your family, your friends, or take that extra vacation...You're going to burn out and quit!
So....It may be time for you to raise your prices.
You're going to feel resistance
When you make the decision to finally raise your prices you are going to feel uneasy about it! Especially if you're already having some trouble finding new students and getting them to pay you now.
You have to fight that resistance and gut feeling that's telling you it's scary.
When I first started tutoring I was charging $15 per hour and I remember thinking how cool I was because I was making far above the minimum wage at the time.
But then what happened was my schedule got booked and I got capped out financially! I couldn't make anymore money because I didn't have anymore time available to book new students.
This was a problem because I still wasn't making enough money to live the lifestyle I was looking for and on top of that I was busy all the time!
I came up with this brilliant idea! What if I increased my prices from $15 an hour to $20 an hour!
My first thought was...No one is going to pay me $20 an hour for my knowledge...That's a lot of money!
I fought the resistance I felt and did it anyways.
To my surprise...Nothing changed! People were continuing to tutor with me at my new rate.
After a few weeks I increased my price again and same scenario.
This was when I began to put some packages together (If you aren't tutoring with packages you will want to change your model ASAP)...
I was charging somewhere around $250 for 8 hours of tutoring. Four students was $1000 a month!
Around this time I had hired a coach to help me grow my tutoring business and you won't believe what she told me on day 1 of coaching...
RAISE YOUR PRICES!
So guess what? I did.
I raised my prices from $250 for 8 hours of tutoring to $350 for 8 hours of tutoring. And people still invested in their tutoring with me!
I learned that parents will still invest into your services as long as they see the value in what you're providing.
Benefits of raising your prices
- Appear to be a premium service - They can hire joe down the street who's a college student for $15 an hour or they can hire you as a professional tutor.
- Be taken more seriously - If you are a $15 per hour tutor you're going to be perceived as cheap. It's like the Walmart and Target scenario...They both sell similar products but you get a different crowd of people shopping at each store.
- More committed students - The more that someone invests into your services the more committed they will be because they are invested. This means less cancellations, less pain in the butts and they will take your time more seriously.
- Better results - Since they are paying more they are going to be more willing to do the work inside and outside of tutoring. Better results will make you as a tutor stand out!
- Easier clients - Customers that pay more are going to be far easier to work with. I know this from experience. Some of the worst customers I've ever had were the ones paying the least.
- More money - You'll make more money doing the same or less amount of work.
My recommendation: If you aren't confident enough yet to raise your prices, this is my recommendation to you. Get 5 students at a cheaper price and then increase your prices without hesitation. Decide TODAY what your new price will be, commit to it and when the time comes increase your rates right away...No thought, only action!
Let's look at the math
10 students @ $250 a month = $2500
10 students @ $350 a month = $3500
10 students @ $600 a month = $6000
You can at a glance see just how powerful it is to raise your prices! You could work the same exact amount of time and more than double what you make by simply raising your rates.
I hope if you made it this far you understand just how important it is for you as a tutor...To increase your prices today!
If you'd like the capability to grow your tutoring business, claim a 14-day free trial of SmartTutor today. The system that has allowed me to grow my tutoring business from 0 to multiple 6-figures. What do you have to lose? Cancel within the 14-days and you won't be charged!