How to Set Your Rates for Music Lessons | Ep 123

April 15, 2021

How Much To Charge For Music Lessons

Setting or raising your teaching rates for music lessons can be a difficult and agonizing process. You’re setting a monetary value for both what you think your lessons are worth and what you think your customers think they are worth.

 

 

What Signal Do You Send?

Your music lesson rates send a signal to your market. It allows them to tell themselves a story. Premium pricing allows parents to feel like they’re giving their children the best. Lower-priced lessons allow parents to feel like they’re getting a good deal.

 

–Show Transcript–

 

Setting Rates and Raising Tuition

Pricing your music lessons or considering raising your prices can be a difficult topic for any small business owner. My concern was that people would perceive me as being unreasonable, or being unfair. I worried that people would perceive me as being greedy. I worried that people would think that all I care about is the money and not the kids.

 

Over time, I began to realize that people don’t think that at all. Some people might think that your pricing is unfair, and those are people that are probably more price-conscious than most. And if they think that your pricing is unfair, they clearly just fail to see the value in what you’re offering.

 

How Much Do Your Customers Value Your Music Lessons?

I saw somebody on Facebook the other day say, that a lot of parents just don’t value music lessons. They’re right. Parents don’t value music lessons. They value what music lessons can do for their child. They value the promise that music lessons make for their child.

 

I also feared that my pricing would scare some people off, which is okay. You can’t be everything to all the people, but you can be everything to some of the people. I use to think that by offering a lower price, I would lower the barrier to entry and a flood of customers would come in. That wasn’t necessarily the case. These are all factors to consider when you set rates for music lessons.

 

Know Your Market and Competition

The first thing you obviously need to do when it comes to pricing is know your market, know your competition, know what they’re charging. You don’t have to look at every music school or private teacher in town but look at the music schools that you feel are the most similar to yours or appeal to a similar type of customer. Look at the pricing range and then ask yourself, what type of message do you want to send to people?

 

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Did you Hear About the $100 sandwich?

I want to share with you a couple of extreme pricing stories that really exemplify how pricing sends a message. Steven Starr is a restaurant owner in Philadelphia, He wanted to try to find a competitive edge. He came up with the idea of adding a Philly cheesesteak sandwich to his menu and charge a hundred dollars for it.

Anyone here in the States knows that Philadelphia is known for their Philly cheesesteak sandwiches, and there are hundreds of restaurants and little fast food joints that sell Philly cheesesteaks. By pricing a cheesesteak sandwich at a hundred dollars, it was Starr’s way of trying to stand out from the competition.

 

Pricing Can Generate Word of Mouth Marketing

The typical cheesesteak is about $3 to $4. It was an outrageous price for a Philly cheesesteak. Not only did he get local press for it, but he also got national press. NBC News did a piece on the $100 Philly cheesesteak. Starr used the finest beef and served it with a glass of champagne as well. He took what was typically considered a fast food item, and he brought it into fine dining.

 

Is Starr’s Philly cheesesteak sandwich that better than the rest? Purists were up in arms over this fine dining takeover. The price and the experience was the story, not the quality of the sandwich. . People actually went to the restaurant to see what the fuss was about. It also gave them bragging rights to say that they bought a hundred-dollar Philly cheesesteak. It allowed people to participate in a story that they could brag about. They could go and take a picture of the sandwich post it on social media.

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Steinway or Yamaha? Gibson or Fender?

Musicians, we can relate to this story. How many of you piano players play a Steinway? Or at least would like to play a Steinway if you don’t own one now? Is Steinway really the best piano out there? Perhaps someone who plays Yamaha might think that Yamaha is the better instrument. piano.

 

People who play Steinway are telling themselves and the world a story. The story is that people who play Steinway are serious musicians. The same applies to a Stradivarius violin. The same applies to a 1957 Gibson Les Paul. Is the 57 Les Paul really the best guitar? It is for some people. But if you play a 57 Les Paul, you’re telling yourself and you’re telling everyone that you’re a serious musician. Only serious guitarists play a 57 Les Paul.

 

I play a 1975 Fender P bass. I like how it makes me feel. I like how it makes me feel connected to my musical heroes. My musical heroes would never play a 2005 P bass. They would play a P bass from the sixties or early seventies.

 

No One Values Free

Here’s another extreme pricing story. I saw an ad, I think it was on Facebook for a book by Brendon Burchard. I’d heard of this guy. I knew he was one of these marketing thought leaders that had a lot of respect. The ad was for his new book. I saw that it had just come out and it was getting some reviews.

 

The offer in the ad was, “Order this book for free, pay for the shipping.” It’s a great deal, I paid for the shipping. It was maybe $7. I never read the book though. I put it on my shelf and I never read it because, in my mind, it was free. It had no value to me. It doesn’t matter what the critics say about it. Maybe I’ll get around to it someday.

 

All the books that I paid for that are in the batter’s box on my shelf; I’m reading those first. Had the offer been to buy the book for $7.99 and shipping is free. I wouldn’t have bought the book. I was enticed by the idea of getting something for free. It’s hard to say no to free. But it’s also hard to say yes to taking the next step with something that’s for free. The next step, in this case, would be reading the book.

 

What Your Prices Say About Your Music Lessons

The Cheesesteak is one extreme and the free book is another extreme. Each pricing model tells a different story. When it comes to pricing your music lessons, I encourage you to ask yourself, what story does your ideal customer tell themselves when it comes to pricing? What relationship does your ideal customer have with money? One of the biggest mistakes we make as music school owners is we look at pricing through our own lens, through our own filter. We all have our own individual relationship with money. Spending money impacts us all in different ways.

 

When I owned a music school, I couldn’t afford to send my own kids to the school.  I had to learn how to look at my customers’ worldview and relationship with money. How do you figure that out? Walk out into your school parking lot. Look at the cars they drive. Look at their clothes, their shoes, their handbags. Whether they send their kids to private or public school, whether they send their kids to sleep away camp or not. What zipcode do they live in? Where do they go on vacation? These are all signals to you as to what relationship your customers, as well as your ideal customer, has with money.

 

What Are Your Customers Motivated By?

Some people are motivated by the deal, by the bargain, by feeling frugal. They love the thrill or the rush of getting something at a discount. It gives them something to talk about, to brag about. Then there are other people who are motivated by spending their money on luxury items. They feel like they deserve that luxury. That they’ve worked hard for it. They’ve sacrificed and worked hard.  They want what’s best.

 

If you’re a passionate musician, you likely want the best instrument you can buy. When it comes to parents and spending money on their children, they have an even different perspective on that. Most parents want what’s best for their child. One way you can make parents feel like they’re giving their child what is best is through pricing.

 

Parents Want What’s Best For Their Child

If you’re going to go buy your child a new pair of shoes, one pair is $15 and another pair is $35. The $15 pair of shoes isn’t likely to make you feel like you’re giving your child what’s best. The $35 pair is more likely to give you that feeling. Especially if they’re sitting right next to each other. Good parents give their children what’s best.

 

Sure everyone has a budget. Some people’s budget is more limited than others. Even if you have a limited budget, you’re likely to have that desire to give your child what’s best. Your pricing sends a signal to your market as to the quality of your music lessons, as to the quality of the experience, and what type of expectation customers can have working with you.

 

How Much Do You Believe in You

If you charge $150 a month for 30-minute private lessons and your competitor charges $125 a month for private lessons, your market’s going to have very different expectations from the two of you. If you’re charging $150 and the rest of your market’s charging beneath that, you’re making a declaration of confidence and quality. You’re creating an opportunity for parents to provide their child with what is best. Now, if you price your lessons right in the middle of your market, there’s not much of a story there, which is fine. You can set rates for music lessons on the low end, but it doesn’t really tell much of a story until you’re maybe the lowest in the market. We’re the cheapest in town, we’re the most affordable, affordable music lessons. It’s like the free book. I didn’t value it because I didn’t pay for it. The fact that it was free-Now that caught my attention.

 

If you’re the cheapest in town, you’re definitely going to catch people’s attention, but you’re letting them know that you’re maybe not so confident in your product. If you’re not confident in your marketing, if you’re not confident in your ability to sell, if you’re not confident in your ability to provide a consistent customer experience, you’re going to price on the low end. Then maybe that’s not your motivation for pricing on the low end, but that’s how your market is going to interpret your pricing.

 

Help Your Customers Feel Like Good Parents

If you look at the free book and the hundred-dollar cheesesteak, those are the extremes. Where do you want to sit on that axis? What message do you want to send to your market? Do you want to create an opportunity for your customers to feel like they’re giving their child what’s best? Or do you want to create an opportunity that will help your customers feel like they’re getting the best deal in town?

 

We Want to Hear From You

Pick one or more questions and answer in the comments section below.

  1. Are your music lessons priced on the high or low end? Why did you set your rates for music lessons this way?
  2. What is your greatest fear when it comes to raising your rates?
  3. What advice would you give to a music studio that is reluctant to raise their rates?

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