Variable Pricing in Tuition - Do You Like It?

[dancingalone]

Many schools in my area do some form of variable tiered pricing. You have 3 tiers, usually named something like Basic, Advanced, and Masters (some notable groups use other nomenclature, but that's not important).

Tuition is set at $80, $110, and $125 respectively with an obvious goal of pushing everyone to the top tier.

Basic students only get 2 classes a week and only fundamentals are taught in this class, so if you ever want to promote beyond the first 2 belt levels you will need to upgrade.

Advanced students get up to 4 classes a week, but their classes only get instruction in the base curriculum for advancement. The 'fun' stuff is reserved for the Masters membership students who get everything.

I'm sure many of you are familiar with schools in your area who do something similar even if you do not attend or run one. What are your thoughts about the structure? Fair, unfair? A good idea? If so, for whom? Finally, do you believe it can foster good martial instruction?

 

[Steve]

Not TKD, but my school offers a drop in price $20, monthly unlimited $100, monthly unlimited plus 1 private/month $150 and then a slight discount if you pay 6 months at a time.

It's fair and doesn't smack of black belt clubs or withholding instruction.

 

[terryl965]

I know alot of them down here, for me this is just a screme to make more money. I do not like it period, but I see why they do it and how it is presented and people seem to like it. For me I have a set price per person and then we have a discount for multiple family members. We offer classes 6 days a week and we have five to eight classes everyday we are open. The only thing I charge extra for is my comp. team and that is only $35.00 per month extra, simply because if a parent is spending that then they make sure they have that child here during those training times. Great Thread.

 

[K-man]

Running a school requires commercial decisions and this obviously becomes part of your marketing strategy.

Our school just aims to cover the costs of training and so for me, I wouldn't feel comfortable suggesting that to get 'all the story' you have to pay more.

If the extra charge gives you access to a gym, or additional classes, without preventing normal progression, I see no problem. :asian:

 

[Indie12]

We Charge an initiation fee and by the hour.

 

[Gwai Lo Dan]

We Charge an initiation fee and by the hour.

How much is the initiation fee? I would think that would discourage people from joining. On the other hand, the "base membership" would encourage people to join because it is cheaper to start than if the average fee.

 

[granfire]

Our fee was the same for every one, school open 6 days a week, adults actually had 8 chances to bug the instructor with their presence. I think there was a discount on the 3rd family member but I think only one family reached that, bud both parents signed up under the 'parents train free' promotion, so I think they had a 3 for one...

The test fees were extra, as well as gear (the Dobok was included in the signup fee tho).
Once a BB the fee went up from 50 (school specific, another school charged more, same organization) to 95, but the frequency decreased, so it was actually cheaper (though when you do look at it, that made the belt cost 50 bucks...)

 

[dancingalone]

I'm not so much interested in what the rate is that various schools charge. I'm wondering if MT members feel variable pricing is a good application of capitalism to martial arts or not. In other words, do they really help students by offering a low tier of services rendered for a lower price?

 

[SahBumNimRush]

No, I don't care for the variable pricing, personally. If you are teaching martial arts with a code of ethics, I personally believe that variable pricing is a bit shady. We charge a membership fee (same for everyone), with membership you can come to as many or as little classes as you want per month. You have to have a certain attendance to be eligible to test, however.

Keep in mind that this is coming from a school owner who was raised in a dojang where all instructors had a day job and weren't trying to make money off the school. I am in the same position now. My knowledge is worth something, but I am not going to piecemeal it out depending on how much you are willing to pay. I piecemeal it out to who is worthy of the knowledge.

 

[chrispillertkd]

My instructors have a variable rate but it's quite different than how you describe. Classes are held four days a week and you can pay for one, two, or three+ days a week. If you pay for one day a week you can go to any number of classes once a week.

Classes are divided into beginner, intermediate and advanced levels with material appropriate to each level being the main (though not sole) focus in each class. If you're a white belt you are only going to be going to beginner classes. If you're an intermediate belt you can go to the intermediate and the beginning classes on the nights you're signed up for. If you're a black belt you will go to advanced classes, the intermediate and the beginning classes that are held on the nights you're scheduled to attend.

So, if a black belt only signs up for one night a week, let's say, he could still attend 3 classes a week. Most of the black belts sign up for multiple nights and attend at least two classes a night. Many get the full 12 available hours of training a week.

This system does have different prices depending on the number of class nights you sign up for but as you progress in rank you actually pay less because of the extra classes you can attend basically for free.

Pax,

Chris

 

[dancingalone]

My instructors have a variable rate but it's quite different than how you describe.

That's not too different from a simple per class fee structure. Some people charge X amount per class with a slight discount if you pay for a block of them at once.

How do you feel about variable fees for variable services however? Think of it like buying a moped, a motorcycle, or a car. The car costs the most, but it's also the most versatile. Meanwhile the moped doesn't do as much, but hey it's not meant to... It's a low cost transportation alternative for streets rather than highways.

Is it possible to structure a fee schedule in this way that is good for both the student and the school owner? The way I described it is an obvious attempt to push everyone to the highest tier of services, but I wonder if it can be designed more equitably.

 

[chrispillertkd]

That's not too different from a simple per class fee structure. Some people charge X amount per class with a slight discount if you pay for a block of them at once.

Except in this case you're only paying for up to 3 classes and can actually attend a total of 11 (I said 12 earlier but one one night there is only two classes not three). That's not a slight discount, IMNSHO.

How do you feel about variable fees for variable services however? Think of it like buying a moped, a motorcycle, or a car. The car costs the most, but it's also the most versatile. Meanwhile the moped doesn't do as much, but hey it's not meant to... It's a low cost transportation alternative for streets rather than highways.

What's the variable service here, though? You're learning Taekwon-Do. You get taught Taekwon-Do, regardless of how many classes you take. As you progress in rank you can attend more classes without paying anything extra. I'm not following your analogy.

Is it possible to structure a fee schedule in this way that is good for both the student and the school owner? The way I described it is an obvious attempt to push everyone to the highest tier of services, but I wonder if it can be designed more equitably.

I think the one I described is good for all involved. It's good for the instructor because if offers more of a return on their investment of time and instruction when the student signs up to take more classes. It's good for the student because they can actually attend more classes than what they sign up for if they want.

The scenario you described is quite obviously weighted int he instructor's favor (which as a business I can understand, though I don't particularly care for). I've also seen some schools that offer a flat fee and the students can attend as many classes as they want. That's probably the most attractive approach for many students but, IMO, when you get to charging fees of, say, $100+ or more per month for unlimited classes it will depend on what the student is looking for as far as how attractive it is to them. For example, if they can only make one or two one hour classes a week then they might think the price is too high for what they can afford.

Pax,

Chris

 

[jthomas1600]

I don't like the idea as the OP posed it at all. I do like the idea of variable fees based on how many classes you can attend. I worked something like this out with my school. If the regular monthly fee is $100 and students are encouraged to attend 3+ classes a week, I kind of like having a 2 times a week for $75 or something. For some people that $25 could be the difference between whether they can take classes or not. I also paid for martial arts class once by bringing firewood to heat the gym and fresh Dungenous crab a few times a month for the instructor.

 

[granfire]

I also paid for martial arts class once by bringing firewood to heat the gym and fresh Dungenous crab a few times a month for the instructor.

you probably overpaid....

I suppose if you can only make it to 2 classes, getting a discount is nice. But when virtually nothing is different other than the belt color...

I do get it when you have fixed days a student can come and anytime after that you charge extra, I have seen that in ballet schools and gymnastics centers.

 

[StudentCarl]

I don't like variable tuition.

Where I study it's one price per month for everyone, covering two classes per week. Students may do more with permission, but there's no extra charge, and no extra charge as you rise through the curriculum. I help with kids classes so I more than carry my weight.

To what extent do some accept barter? We have a family who helps cover their tuition by cleaning the school.

 

[harlan]

Good marketing can sell anything.

You already stated that the extra money = 'the good stuff'. Sounds like the other classes are basically babysitting for $10/class. You didn't mention if there was a tiered system, where the first two options might be kyu grades, and the higher tuition essentially 'black belt clubs'.

I pay $5/class to study with upper dan levels, and nothing for private lessons with my teacher. The OP sounds like bad karma to me; the slippery slope of rationalizing the 'value' of one's martial training by how much one has spent...and passing along that cost (and way of thinking) to the student. 'You get what you pay for', vs. what one puts into it.

I have to admit, however, I did consider charging once I took a student on, and had to consider how to rationalize it. I could go 'free', and pass along my teacher's value system, or go 'token' payment, like his teacher. Or, I could go the way of charging enough to cover the overhead, and considered what was the value of my time...and could I put a price on what I might pass along? And then, students being poor, I considered there might be those that could pay and not really care about the activity, and those that couldn't and did. Was I willing to charge variable rates? Was I willing to take barter?

In the end, I decided a flat rate of zero was best. I tell my student that if she brings a friend, however, it is half-price.

Is it possible to structure a fee schedule in this way that is good for both the student and the school owner? The way I described it is an obvious attempt to push everyone to the highest tier of services, but I wonder if it can be designed more equitably.

 

[dancingalone]

You already stated that the extra money = 'the good stuff'. Sounds like the other classes are basically babysitting for $10/class. You didn't mention if there was a tiered system, where the first two options might be kyu grades, and the higher tuition essentially 'black belt clubs'.

I was trying to stay away from the BBC term.

I don't necessarily think the 'Basic' tier need be babysitting. Suppose it is simply a white-yellow belt class, thus meaning a concentration on basic stances, kicks, and punches. And lots of physical conditioning. Kind of 'boring' but rewarding at the same time to someone who just wants to work on meat and potatoes and get a good workout at the same time.

I'm envisioning the 'Advanced' level as more or less rounding out the belt requirements for orange belt up. And 'Masters' would be the 'optional' material such as weapons, etc. But the point is certainly to get the full array of material I consider necessary to be a complete martial artist, you'd have to pay for the top tier. Yes, it's probably good business, bad budo, as virtually everyone seems to be saying.

No one wants to speak for the other side? I must be asking the wrong audience.

 

[dancingalone]

What's the variable service here, though? You're learning Taekwon-Do. You get taught Taekwon-Do, regardless of how many classes you take. As you progress in rank you can attend more classes without paying anything extra. I'm not following your analogy.

See above. Some friends of mine who do run commercial dojo suggest it is a good business practice to offer multiple price points yet make it clear that the most expensive option is also the most attractive with the most 'value'. This must be one of those customer psychology things. They do quite well financially so I assume they know what they are doing.

 

[harlan]

I'd be curious as to the breakout of student ages, and turnover, as well as how many (if any) of the students in the beginner classes ever advance to the 'added value' classes. Also curious as to the percentage of adults in the advanced class.

Considering the price of after school programs in my area (http://www.amherstma.gov/index.aspx?NID=346), the local martial arts schools' bread and butter is offering a martial arts alternative. Knowing full well that most won't ever stay to BB. And since the BB tend to drift away at 18, I suppose a variable tuition rate makes sense as it makes more money off of them right from the start.

See above. Some friends of mine who do run commercial dojo suggest it is a good business practice to offer multiple price points yet make it clear that the most expensive option is also the most attractive with the most 'value'. This must be one of those customer psychology things. They do quite well financially so I assume they know what they are doing.

 

[chrispillertkd]

See above.

Hmm, I still don't get it. There's no "optional stuff" at my instructors' school. You sign up to learn Taekwon-Do, you learn Taekwon-Do and there's a specific curriculum up through VI dan.

Some friends of mine who do run commercial dojo suggest it is a good business practice to offer multiple price points yet make it clear that the most expensive option is also the most attractive with the most 'value'. This must be one of those customer psychology things. They do quite well financially so I assume they know what they are doing.

Perhaps. Then again I personally know some school owners who do ratehr well by charging a flat fee for their students per month and happily take the same amount of money from the people who go once a week as they do from the much smaller number of people who show up to class five nights a week. The selling point with them is "you can train as much as you want for only X amount of dollars per month!" (With X usually being in the $100+ category.)

Pax,

Chris