Why Pricing Is Like A Concertina
When I was little, we lived in a big old house full of odd nooks and crannies.
In the living room, there was a cupboard next to the fireplace. Well, an alcove with a door over it.
Anyway, in this cupboard, lived an old concertina or squeezebox that my mum must have bought in a past life.
It fascinated me: the hexagonal shape, the buttons on the side, the sideways worm-like movement it made. Plus, I wasn’t allowed to touch it which only enhanced my fascination even more.
The concept of this instrument is that you push and pull on it to get the tune out. And push down on the buttons too I guess.
This push-pull of the concertina or squeezebox (this second name is more appropriate here) is a good metaphor for the dangers of low pricing in your language teaching business.
The Pricing Squeeze In Action
Let’s say you price a month-long 1:1 programme at 100€. I’ll explain this choice of number more shortly.
This could involve lessons, or maybe you send your student work via Google docs or something like this. Anyway, it’s an individual programme involving some kind of preparation and feedback, however minimal.
And then let’s imagine you want to introduce a group programme. How do you price it?
Well, I imagine it would need to cost less than your individual programme. Logically, anything with individual feedback should be your highest priced, VIP option right?
This is what I call “price squashing” in action. Your lowball price of 100€ leaves you very little room for manoeuvre to add other products or services to your product ladder.
If you have a 1:1 programme at 100€, a group one at 50€, and want to add an e-course, you’ll struggle to charge more than 20€ for it.
Time to squeeze out the concertina.
The 50€ Keyring
Price anchoring is why you go into a luxury boutique and come out with a 50€ branded keyring. Thanks to Halley Gray for that example.
It’s why you buy things on sale.
It’s why you see offers stacked next to each other in increasing order of price.
The higher priced offer is supposed to make the middle offer look like a bargain.
So, when placed together, a 10 000€ web design package is meant to make the 5000€ one look like a steal.
When you dial those numbers down to say 100€ for a 1:1 programme and 50€ for a group one, the effect is the same but why not use it to your advantage?
Price your 1:1 programme so that you can eat, pay rent, pay your taxes and you know, buy something frivolous now and again. And then use a lower-priced item to anchor the price.
So maybe your 1:1 programme is now 300€.
And you have a group option at 150€.
And perhaps a 50€ course or a 10€ e-book.
Now we’re cooking. You’ve squeezed your concertina out so that your prices aren’t all squashed together. You’ve got room for manoeuvre and to breathe.
How to Avoid the Buring Ball of Pricing Resentment
I use the 100€ example because many language teachers in Western Europe price their lessons at 20€. It’s kind of the going-rate.
You might get school or university students who undercut that rate a bit by doing lessons at 10€ an hour off the books.
But even at 20€ an hour, it’s hard to make ends meet. Unless you are getting paid cash only.
Many teachers believe that lessons should be affordable. Listen, when I was charging 15€ an hour for lessons (with a discount for booking a package of 10!), I turned into a fiery pit of resentment as my student would tell me about her trips to her second home in the south of France.
People who are really struggling to make ends meet are probably not hiring private language teachers.
A better place to start is to take a look at how much you need to make. And not just to survive. You need a price that can sustain you over the long haul.
Our goal is to help as many people as possible. And to not go broke in the process.
You don’t want to feel that lump in your throat and the tears pricking at your eyes every time you look at your bank balance. Believe me, as a language teacher I’ve been there.
You don’t want to become a burning ball of resentment because your clients talk about their second homes, multiple holidays and fancy gadgets all while paying the low price that you chose to set.
So factor in your various needs. not just rent and food.
If you have a business structure, how much tax and national insurance do you have to pay?
Do you have to pay VAT?
How many students can you handle? And no not to the point of adrenal fatigue. I mean a reasonable number.
There is much more about pricing than I can go into here. What I’ve found is that it’s much better to invest in your marketing, learning how to sell what you offer based on the benefits and the value, than to sell by relying on low pricing.
The only person who loses out in that model is you. You may find it easier to get clients. But you’re only a competitor price cut away from losing them.
So if you’re in this game for the long haul, don’t squash your prices. And don’t squash your needs.
Price based on what you need and what you can handle in terms of clients, rather than the market rate or your perception of affordability and accessibility.
No-one wants an exhausted, underfed, poorly housed teacher.
More help with pricing for language teachers
2 of my mentors have written about pricing better than I ever could.
Elena’s approach is to figure out how work less for the same money and create programmes that scale.
Janine’s approach is to fix your prices by starting with your needs and educate your clients on the value of your services.
Both of these approaches involve niching down and getting really clear on the value you offer your clients. It’s a longer, harder road, but it’ll be worth it in the end.
For the concertina to work in your favour, get clear on value, rather than relying on cheap pricing. And use concepts like price anchoring to your advantage!
So, let me know — are your prices to squashed together? How is your “pricing concertina” (I hope that becomes a thing!) looking and would you like to change it?