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Price increase in 2013? What do YOU think?

by Owen Lee
9 replies
I recently started working with a tuition center and we're almost doubling the number of leads we get (here's how we did it: http://www.warriorforum.com/offline-...s-2-weeks.html).

In fact, we have so many new students registered for next year's classes that our training room will be full till February.

My client has expressed interest in raising their tuition fees and asked for my opinion. Previously they couldn't do that because they weren't getting enough students, but now I think it's a good opportunity to announce a price increase for 2013 classes.

The thing is, I don't think we should just say "... attention parents, starting in 2013 Feb our tuition fees will be going up!". Instead, I think we could turn this into an opportunity to have existing students sign up a longer period at the current price -- We'd say something like "... price will increase in 2013 Feb but you can lock in the current price if you extend your kid's classes in Jan..."

What's your take on that? I'm very interested in how you'd approach this!

Owen Lee
#2013 #increase #price
  • Profile picture of the author Kung Fu Backlinks
    That sounds like a great idea. You'd have to come up with some unique refund policy, though, right?

    I would imagine you'd need to justify the increase, too... although... increases in education costs is the norm. I doubt anyone would bat an eye.
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    • Profile picture of the author ThePromotionalGuy
      Owen,

      Right now you only offer 1 education package choice.

      It's extremely difficult to keep existing clients when you tell them your prices are going up if the material hasn't increased in value.

      It's extremely simple to keep existing clients when you offer them upgraded education package bundles.

      I would recommend that you offer 3 different multiple education package bundles.

      i.e. Silver, Gold and Platinum.

      This gives the parents choices. As they review each package they learn that for "X" amount their child get this. But if they choose a bigger package they get this and this for "Y" amount.

      As the offers get bigger, the material becomes more intensive and the price points will naturally increase with each offer.

      Silver Offer - Blah, blah and blah

      Gold Offer - Blah, blah, blah, blah, blah blah and blah blah blah

      Platinum Offer - Blah, blah, blah, blah, blah blah and blah blah blah Blah, blah, blah, blah, blah blah and blah blah blahBlah, blah, blah, blah, blah blah and blah blah blah
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      • Profile picture of the author jimbo13
        You don't need to announce anything.

        Company should have an unwritten policy that anyone who wishes to take extra classes in future should get those classes at the same rate they initially bought should prices rise.

        So that sorts that lot out.

        If you wish you can send Direct Mail to all existing customers plus last 6 months then 12 months with something along those lines on it.

        Remember many families have a couple of children on average usually within 24 months age range.

        You should, or the company should, already have that info on a database though. If not you need to start doing that when you are enrolling.

        In your initial thread I see you are talking about end of Primary Test scores. Being in UK I don't see any importance in that myself as surely state educated people would trot off to the local state secondary school irrespective of any primary results.

        So if you don't mind can you tell me what the tests are for?

        And is the tuition centre specifically focusing on teaching to pass this test or is it about understanding of subject matter that would result in an increased test result.

        The latter is where you want to be but I don't know what tests you are talking about obviously being in the UK.

        Reason the latter is better is that you can follow families through secondary school as well.

        Many children struggle to transition between primary and secondary so that is a good type of class to run as parents will identify this in their children.

        I actually have tonnes of questions on this but you might feel I am interrogating you so I'll stop.

        Dan
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        • Profile picture of the author Owen Lee
          Originally Posted by jimbo13 View Post

          Company should have an unwritten policy that anyone who wishes to take extra classes in future should get those classes at the same rate they initially bought should prices rise.
          I don't exactly agree. In that case should I charge my old SEO clients the 2008-price if they come back to me for another SEO project? Parents sign up classes for a specified period. It's not a continuity program. Future classes are simply a different service/product.

          In your initial thread I see you are talking about end of Primary Test scores. Being in UK I don't see any importance in that myself as surely state educated people would trot off to the local state secondary school irrespective of any primary results.
          It's sad to say this but here in Asia schooling is more about beating other kids on scores than learning actual knowledge. Not to stay that the latter is disregarded but parents typically only evaluate a kid's performance based on his/her scores at school instead of investigating his/her REAL learning ability and knowledge.

          So yeah, "improving your kids' scores" is major selling point and, frankly, a better one than "helping your kids learn better" in our case.

          I actually have tonnes of questions on this but you might feel I am interrogating you so I'll stop.
          Thank you so much, Dan, for your valuable input!

          Owen Lee
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      • Profile picture of the author Owen Lee
        Originally Posted by ThePromotionalGuy View Post

        It's extremely difficult to keep existing clients when you tell them your prices are going up if the material hasn't increased in value.
        Good point! Although the planned reason behind 2013 price increase is simply "rising cost" from my client, you definitely brought up a good point. The parents may not see "rising costs" of operating a tuition center a valid reason for price increase.

        So I think we're going to add additional elements to the existing classes to further justify the price increase (though I don't think we can go with the bronze/gold/silver approach.)

        Thanks!

        Owen Lee
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  • Profile picture of the author davidreese
    Why not have two prices?

    One for those that are already members and higher prices for new members?

    Eventually the older members will leave and be replaced by the new members paying higher prices. It might make the older members stay longer knowing they locked in a special price.
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  • Profile picture of the author Andrew H
    +1 for keeping old price for existing clients. Post your new prices so that your existing clients feel happy they are getting a deal for being loyal.
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    • Profile picture of the author DABK
      I'd go with raising prices on future clients. When that's implemented, you can raise prices on everybody else. And make a big deal about how every existing client who renews now, will be kept at current prices.
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      • Profile picture of the author Owen Lee
        Originally Posted by DABK View Post

        I'd go with raising prices on future clients. When that's implemented, you can raise prices on everybody else. And make a big deal about how every existing client who renews now, will be kept at current prices.
        Only when I reread this thread again did I realize the value of your advice. I agree -- When the price has ACTUALLY gone up, the benefits of paying old prices will be much more tangible!

        Thanks!
        Owen Lee
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