Maybe you wouldn't think of a piano teacher as an expert on pricing and value, but this one has a valuable lesson for solopreneurs.
I have a friend who, in addition to helping market her husband’s business, teaches piano lessons on the side. She has a music degree and is a certified teacher in the Suzuki method of piano instruction. She trained with the founder of the Suzuki method and maintains professional continuing education. She is a top notch expert in her field.
Knowing her personally, I believe her to be kindhearted, easy to work with, and knowledgeable in every way. In other words, beyond her expertise, she possesses all the qualities you would want in a piano teacher for your child. I can’t imagine going to anyone other than her if I needed a piano instructor for my child or if I was asked to recommend one.
I saw her recently, and after the usual small talk, asked about her piano teaching.
The gentle smile she normally carried on her face disappeared, and her forehead furrowed. She began to speak excitedly and more rapidly.
"Well," she said, "I got fed up with everyone and everything that was going on. I wrote all of my clients and basically fired all of them."
"Wow!" I said, "Tell me more about that…what was going on?"
"I gave them a list of new stipulations they had to comply with before I would agree to have them continue as my students," she said. "The reason for my frustration is that I had parents cancelling at the last minute, or calling me and saying that 'Susie has a lacrosse tournament, so we can’t come Friday afternoon, but can we reschedule for Sunday afternoon?' That’s my time with my family!" she exclaimed.
"I had one particular student whose parent was doing this almost every week—rescheduling for some reason or another. This particular parent was a pain to deal with….always very rude and abrupt."
"So I sat down and wrote a letter to all my clients. I explained that I would no longer reschedule appointments, as it caused chaos for me and my family’s schedule and breached my family time. I told them that if they missed a lesson, then they would need to come back at their usual time the following week. Finally, I raised my prices by about 35%, and I told them I was not going to negotiate on this point. If they could not agree to all these points then they could find another piano teacher."
"The only client I lost," she continued, "was the rude parent which I didn’t want to deal with any longer anyway. Everyone else agreed to the new price and the terms of my lessons."
"After going through that, I still think my prices are too low. After the first of the year, I think I’m going to raise them again."
This piano teacher received a lesson in price vs. value, one which is important for you to consider as you evaluate your own business. If you don’t clearly understand it and communicate it to your clients, both current and prospective, you not only may not do as well as you could otherwise, but you may go out of business.
All customers of any business pay a price expecting to receive value, a value which is worth more to them than the price they pay. If they do not derive value which for them exceeds the price they pay, they will not buy. If they see enough value beyond the price, they will buy. It’s that simple.
Your job as a solopreneur, regardless of the product or service you provide, is to communicate that value, provide it, and continue to remind your clients of that value.
By issuing her ultimatum, my friend unconsciously forced her clients to think about the value she provides vs. the new price she was asking. Consider the benefits those parents must have evaluated as they decided whether to continue at the new, higher price:
- My child enjoys piano lessons.
- My child likes her piano instructor.
- I think my child should learn to play the piano.
- This piano teacher has already done a great job with my child and I expect my child’s progress to continue.
- This piano teacher is highly trained and is well equipped to help my child achieve the goals they have for their piano lessons.
- Piano lessons will help my child expand their learning ability.
- The discipline exhibited by sticking to piano lessons may help my child get into a better college.
- Musicians often maintain longer lasting cognitive ability over the long-run.
- I like being able to tell my friends that my child plays the piano.
- We’ll take a big loss trying to sell the piano we just bought.
Some of these benefits are logical; some of them may be ones considered facile. Some of these benefits meant more than others in the mind of each parent as they evaluated the new, higher price. Whether they sat down and thought this through logically, or whether they evaluated the values they received quickly and very informally, all of my friend’s clients considered the values they received relative to the price being asked.
What this piano teacher discovered is that all of her clients, save the one she wanted to lose anyway, saw more value in her services than she saw in them herself, as reflected in the old price she was charging. They saw more value even relative to the new, higher price being charged. My friend now sees that the value she provides to her clients may be so great that it justifies a new, higher price than the new one she’s just instituted.
As a solopreneur, always think about all the components of value you provide to your clients. Don’t do this in a vacuum: ask your clients this question so you fully understand all those benefits and aren’t just guessing or making incorrect assumptions yourself. How do you save them time? What do you enable them to do that they could not otherwise do themselves? What intangibles, like peace of mind, for example, do you provide with your product or service? How valuable are all benefits, tangible and intangible, to your clients?
Make a list and understand it. Make it part of your proposals. Communicate it clearly. Remind your current clients of it. It will make a huge difference in the success of your business.
Background image by Andrew Norton on FreeImages.com.