If your studio has a dedicated following of students and is receiving positive feedback, it may be time to consider raising your dance class fees. It can be a daunting task because many business owners fear they will lose customers in the process, but bumping fees may be necessary to solidify your business and/or grow your studio. Use these suggestions on how and when to raise your dance class fees while minimizing complaints from parents.
When to raise your prices
There are two main situations where you should raise your prices: when your margins are too small or when your services are worth more. According to Small Business Notes, you can calculate how much you should be charging based on your fixed and variable expenses. If your fees are below your ideal cost-based price, you’ll probably have trouble paying your expenses.
The other situation involves value-based pricing and is a little bit trickier. Value-based pricing is generated from the customer’s perspective. If you consistently have parents say that your classes are “such a great deal,” then your prices might not reflect the value of your services. If your clients are willing to pay more, it’s time to increase your fees.
Apart from these two situations, you should always make sure that your class fees are keeping pace with inflation—your expenses almost certainly will, and you don’t want to be on the hook for the difference.
How to minimize dissatisfaction
Once you make the decision to increase your class prices, you’ll want to do a little bit of canvassing. Ask your customers what they think about an increase. If the change is slight enough, some parents may not mind. However, if you’re met with dissatisfaction, there are a few ways you can make the transition smoother.
Inc. recommended that you add new services when you raise prices. You can offer new genres, class bundles or more private lessons to increase the value of a customer’s dollar. Also explain what you hope to do with the increased revenue. If you’re planning to invest in new equipment or renovate the facilities, parents will see what their children have to gain.
Another possibility is to create different price points. You can keep basic classes the same price, but offer new premium classes. These might include longer studio sessions, more one-on-one time and designated lockers. If you can create a service of greater value without increasing your expenses, you’ll be able to get more customers on board and boost your revenue.
Remember that businesses often need to raise prices as they grow. Weight the risks and benefits, and if the time is right to raise your dance class fees, make a plan and move forward.