Higher Priced Music Lessons and Customer Perception
Perhaps sometimes there’s an item you want to buy, and when you see how low the price is, you maybe think twice about it. “Well, maybe it’s not that good if it’s so cheap.” Perhaps there’s an article of clothing that you’re really excited to buy. You have an idea of how much it might cost and you look up online how much it costs, and it’s a hundred dollars more than what you had anticipated. Now you’re stuck, but do you walk away from this product because of the price? Or does the high price potentially get you even more excited about purchasing it? Perhaps you were excited to buy a new pair of boots.
Parents Want What’s Best For Their Child
You saw them online, they look great. You clicked on it to see how much it cost. Wow. A hundred dollars more than what you had anticipated. A disappointment, perhaps, on one level. On another level, perhaps it’s building your excitement. “Wow. Those boots really must be good if they are $300.” In today’s episode, I share with you a couple of experiences I recently had with one product that was excessively priced or extremely high, in my opinion. When you price your music lessons, it’s not just about your prospective customer’s budget, it’s about a story that they tell themselves. They want something. They want an outcome. They want your music lessons to have an impact on their child. How much are they willing to pay for that transformation for that impact? Parents will do whatever it takes to help their child be a happier person.
Your Heart VS Your Head
At the end of the day, the market dictates how high you can go with your pricing. Take a mental note next time you’re ready to buy something. When you see that price, make a note of how you respond. That high ticket item in your mind, you might think, “Hey, that’s way outside my budget. I don’t have that kind of money. I was hoping to spend maybe $100, $150 on boots. These are $300.” Then your heart kicks in and goes to battle with your brain telling your brain, “But I really want these boots. I’ve worked hard for these boots. I haven’t spent a lot of money this month on any luxury goods.” You start justifying the purchase, the heart and the head go to war until they come to an agreement, and typically, it’s the heart that wins. That $3,000 Fender Stratocaster that you can’t afford, but your heart can easily convince your head that you need to spend the money.
Fear of What Your Customers Will Think
How do you come up with a dollar amount that’s going to allow you to achieve the goals that you’re trying to achieve, but will also be perceived as fair? A dollar amount that your customers and your market are going to say, “Yeah, that makes sense.”? I certainly have a lot of fears when it comes to pricing. I worry about what people are going to think about me. Are they going to perceive me as being greedy?
Are they going to perceive me as being more motivated or driven by the dollar, as opposed to providing an affordable service? Are people going to think my pricing’s maybe even a little out of line and outrageous? It’s offensive. I know a lot of these thoughts aren’t justified, but I think it’s only natural. I think everybody struggles with these, especially when you’re looking at a price increase.
Pricing Sends a Signal
I want to share with you a pricing experience I had as a customer. Two situations I was in, where the pricing of a product really helped me see my service from a different angle. It allowed me to understand how setting my prices at a higher rate is actually not only beneficial to me, but it’s also beneficial to the customer. Pricing is a signal of quality, reliability, confidence, and success. A product that’s priced high clearly must be high in demand and a very successful product. The market dictates the pricing.
There’s really no way to know what your market will and won’t accept by guessing. You have to obviously experiment and try some different pricing structures. I believe setting your prices at not only a competitive rate but as the highest in town, can really work in your favor. Here are two examples of how I was impacted by this as a consumer. I recently did a Google search on maybe the best 20 marketing books. I collected the data, I found a bunch of different lists listing the best marketing books. I threw all the data into an Excel spreadsheet and I sorted it by titles.
And I said, “Okay, the top 10 titles that show up on multiple lists, I’m going to go buy those books.” So one of the books that was really popular was by Eugene Schwartz and the book is called Breakthrough Advertising. “All right, I’ll buy it. I don’t need to really know anything about it. It’s showing up on all these lists. Clearly, it’s a classic.” And the price tag, $300 for a marketing book. All the other marketing books were maybe $18. Maybe some were $23, $26. Breakthrough Advertising was maybe $399. No way. I passed on the book, but then I started researching the book. “What’s the deal with this? Why is this book so much?” Clearly, it’s the best book on marketing. It’s got to be if it’s priced so high. Sure enough, from my research, I discovered that this book really is a classic.
It’s considered a must-read. The price is what really sparked my curiosity. It was an outrageous amount. Now, it just so happens that when the book came out, there was a limited amount that was initially printed. It never went back out into print. If you’re going to buy the book, you’re buying, from what I understand, a used book for $300. Look, I know all this about the book because I did so much research because I was so intrigued. The price tag in and of itself made the book noteworthy. I just happened to see the other day, I got served a Facebook ad showing the book being sold for $125. I’m definitely going to buy it now. It’s interesting when I saw that, I’m like, “Oh, that’s great. That’s so affordable.”
Had I initially seen the book being sold for $125, I still would’ve had a reaction of, “This is outrageous.” But that initial price of 300 some odd dollars set the bar so high in my mind as to what I’m going to have to pay for that. When it dropped down to $125, which was still an insane amount of money for a marketing book, I was thrilled to see how affordable it was. Here’s another pricing story or experience that I had. My wife and I decided that we’re going to look for a therapist for our 17-year-old son. He’s 17 and going through just some very typical struggles as a teenager, so we thought, “Therapy could really be good for him.” So I took it upon myself to seek out a therapist for my son. I found this website, Psychology Today, where they list all the therapists in the area.
And man, there were a lot. Easily over a hundred therapists to choose from. I started going through these different profiles, it made me think, “What if there were a hundred music schools in a given market?” Imagine if you had a hundred different competitors and how tough that would be to compete. Imagine if there was one website that listed all the music schools in your city, how are you going to stand out? I really was trying to be mindful of which therapist caught my attention and why. I think it was maybe 10 to 15 that I came up with and I made a list of them, sent it over to my wife, and said, “Okay, which one of these looks good?”
With all these therapists, they have a picture of themselves. We all respond positively or negatively to pictures. We all have an idea in our minds as to what that person looks like. If you’re going to hire an accountant or a lawyer, you might have an idea of what that person looks like. You’re likely to respond positively when you see a picture of an accountant who matches the image in your mind. Have you ever read a book and you have this picture in your mind of what the character looks like and then they come out with the movie and you’re like, “That’s not what the character looks like.”? Someone had a different image in mind. My wife and I decided that we definitely want to go with a male therapist. Maybe somebody in his 30s or 40s. Somebody with at least five, 10 years of experience as a therapist, but still young enough that my son’s going to be able to relate.
So obviously I’m really responding initially to the photos of the different therapists. Then some of the therapists, not all of them, but some of them made short little 30 second videos that you could watch. The therapist who did have those little short videos, I already had a positive impression of because they were willing to take that extra step. When I would watch the video, it wasn’t even the words that they were saying that I was focusing on, it was their personality type. I promise, I’m going to get to pricing in a second here, but the therapist whose delivery and body language seemed like would be a good fit for my son, those were the ones that I bookmarked. I saw this one therapist and this guy was, I don’t know, maybe mid to late 30s, looked pretty cool, pretty confident. I watched his video.
I really like his delivery style. I said, “Oh, my son is really going to like this guy.” And most of the therapists, the range that I saw for their pricing was $100 on the low end, per session, $175 on the high end. This guy that I liked, I’m thinking, “Okay, he’s probably going to be $150, $175.” And I look at his pricing, it was $225 to $250. Nobody was that much. Instantly in my mind, I said, “He’s the guy. He’s the best one. He’s clearly the best one here.” Why? Because he lived up to my expectations, in terms of his photo, in terms of his delivery, but then his pricing reinforced those thoughts that I had. Had his pricing been $100 an hour. It would’ve been like, “Well, that’s great. He’s cheap.” And I’d be happy about that price, but my level of confidence would’ve diminished a little bit.
A Photo Says a Thousand Words
This guy was well out of our range. If he wasn’t, if he was just a little bit out of our price range, maybe by $25, maybe even by $50, I’m sure we would’ve gone on with. We really wanted to be firm about keeping it to $150 a session. That’s still a lot of money, what, $600 a month. I just want to point out how the pricing of Eugene Schwartz’s book and the pricing of this therapist had a big impact on me. In the case of the book, Breakthrough Advertising, there was some hype around it because the book kept showing up on these lists. Clearly, this book must be worth checking out. Then the price validated my suspicion. Yes, I was taken aback and experiencing sticker shock when I saw that it was 300 plus dollars, but I didn’t forget about that book because of that price. That book stayed on my radar for quite some time. I’ve done a lot of research on that book.
I’ve even watched some YouTube videos that summarize that book. I’m like, “Okay, well, let’s see if I can pick up some of the lessons from the book. Maybe from YouTube, I can pick some of them up.” And they did. Actually what I picked up from YouTube made me say, “Yeah, I really want to buy that book.” And in the case of the therapist, I saw a picture that loosely matched the image I had in my mind of who an ideal therapist would be for our son. His video confirmed those feelings because his delivery was appealing, it was confident, made me think, “Yeah, my son would really with a guy like this. Or I bet this guy could even relate with my son.” And then it was all backed up by his pricing. His pricing made me feel more confident.
Help Your Customers Feel More Confident in You
Your music lessons, when you price them on the high end, you’re helping your prospective customer feel more confident about you. The big question is, is how confident are you in yourself as a music teacher? If you’re a music school owner, then the question is, how confident are you and your teaching staff? Sure, you’ve got that superstar teacher that’s been with you for five-plus years who has unbelievable retention. Maybe you have another teacher that you feel not as confident about. Are they still worth that same dollar amount? A music school that prices itself on the low end gives a prospective customer that excitement, that rush of, “Oh, yeah. I could totally afford that. That other music school across the street, they’re charging $150. This one’s charging $110.”
But then they step back and think, “I want to give what’s best for my child.” The price of your lessons makes them feel like they’re giving their child the best. Pricing is a complicated component of any business. You don’t want your prices to be so low that you’re not maximizing your potential for growth. You don’t want your prices to be so high that people turn the other way. Actually, it’s okay if some people turn the other way. The nice thing about higher pricing is you don’t have to have as many people in your school to be profitable, but you still need enough people to take you up on your offer on that premium rate. That premium rate, it’s a statement of confidence and how confident are you, in not only your music lessons but how confident are you in your customer service and the customer experience?
If you feel like your office and the administrative structure of your school are a little bit chaotic, it’s going to impact your confidence in your business. If that’s the case, if there’s an aspect of your business that you’re maybe not so confident in, maybe you feel like your school looks a little dumpy, a little run down. “How can I charge $180 for that? I mean, look at my school.” What I encourage you to do, is set that high price and then commit to making changes in your business that will help take away some of that lack of confidence. I think one of the most common ones in a music school, is a chaotic administrative system.
If that’s the case, then say, “Fine, we’re going to go up to $180. Over the next three months, I’m going to overhaul the office. I’m going to put systems into place that turn the office, turn the administrative component of my business into a well-oiled and finely-tuned machine.