For most of us, teaching is fuelled by the passion for voice – not by the desire to become the next Dragon in the Den. Website design, marketing approaches and creating pricing strategies didn’t crop up in school – things which would have been far more helpful than working out the perimeter of Gary’s garden to the nearest cubic centimetre.
Take pricing, for example, that awkward twerp we want to avoid talking about – but, we all need to pay the bills and bring home the biscuits (Digestives, please), so having a well structured pricing plan is important.
Introducing Mark Peacock: The Pricing Coach
After a 25-year career in the corporate sector (where he ran a £20-million business) Mark Peacock is now ‘The Pricing Coach,’ helping businesses change or improve their pricing strategies. From his experience Mark has discovered that many businesses tend to underprice and undervalue their services.
So, what should we consider when creating a pricing strategy?
1. Costs and Planning for the Long Term
When we think of costs, we often refer to our business expenditures e.g. studio rental, equipment, insurances, and the tools by which our self-development continues by the likes of books, courses and memberships. Of course we need to factor in our expenses, but there is another group of costs which shouldn’t be forgotten: the costs of living life.
‘Work to live, don’t live to work’ is the old saying, but in order to truly ‘live’ our desired life (the type a ‘normal’ 9-5 job may facilitate), us on the self-employed spectrum may well benefit from studying the income required and applying it to our pricing strategy in such a way that matches our service value appropriately. Chris Johnson, co-founder of The Naked Vocalist podcast and expert vocal coach, has found that pricing in accordance to the cost of living life is important. Otherwise, Chris says, “we risk being unable to take required breaks and holidays, own our own home and save adequately for retirement.”
2. Competitors & The Psychology of Buying
Forget your sense of team spirit for a second and look upon your fellow coaches as competitors. Researching teachers local to us, understanding their charge and what their service includes can give us a good insight as to where we slot in. Clue: price in the upper bracket, especially if you have values and services which differentiate you from others.
Research into the psychology of buying has proven that we associate quality with higher price. If we price ourselves too cheaply we may be advertising ourselves as low quality coaches.
“Far better to start higher and, if it’s really not working, drop your prices. It will take you an awful lot longer to work your way up rather than start higher and adjust,” says Mark.
Ask: Who is my ideal customer? The different categories of singer, from the hobbyist to the recording artist, are likely to have different levels of price sensitivity. Researching your target market and chatting to other vocal coaches who also teach your ideal demographic may just give you further insight into how much your preferred customer may be willing to pay.
In the UK, Southern based businesses often charge more than those located further North, but ‘The Pricing Coach’ believes it’s unnecessary to consider location as justification for pricing: “if you’re clear about who your ideal customers are and why they should buy from you, they won’t care if you’re based in the North or in the South…(Pricing) has everything to do with customers’ perceived value of what you do. You could be based in the middle of London or the middle of Cheshire charging top dollar because you provide a great service.”
Whilst it’s true that the quality of service isn’t geography related, some more secluded locations may dictate price due to the surrounding industry and the demographic populating the area. Ursula Connolly (The Village Voice Studio) is a singing coach based in the north west of Ireland in the remote village of Leitrim. Ursula says: “(Here) prices have to be quite low. It’s a poorer part of the country, there’s very little industry – it’s mostly smallholding farming. It’s probably one of the places that would have been hit the worst with the crash because we would have had a lot of people leave. We are only now beginning to feel the rise in income – it’s taken a long time to filter through from the city to here. From my point of view, I’ve kept my prices manageable and within the standards of the area, but relatively low because a lot of my students would be from low income families. It’s not an area where I would have a lot of high profile people – they would be mostly school children, people who are in choirs and hobbyists. I know that if I was in Dublin I could command bigger prices and I would probably get a more broad spectrum of students.”
The default pricing strategy for many is: COST + MARGIN. But, there are more effective ways to price which can be both valuable to our customers and profitable for us. Let’s look at one of the most powerful options.
Tiered Pricing: The Power of Three
Tiered pricing means creating three packages with different content and price, for example: ENTRY (cheapest – which could be your flat single lesson rate), STANDARD (at least 30-40% more expensive – approximately) and PREMIUM (most expensive with all the bells and whistles, and at least 50% more expensive again – approximately).
‘The Pricing Coach’ says…
“By offering three price points you’re allowing yourself to capture revenue from people who have different levels of willingness to pay. You’re doing everything in the customer’s favour using this approach; you’re giving choice, you’re picking price points across a broad range, it’s easier to sell and, as a customer, I can see at a glance what your prices are and why I should consider buying each package. By doing all of those things, you will increase your sales volume and you will sell more at a higher price.
“For someone who is very price sensitive – they’ll only buy your cheapest package, but if someone is willing to pay more because they value your skills, your expertise, your reputation, then they might be prepared to buy your premium package. It’s important that the quality and amount of services that you provide increase as you go up that price scale.”
The function of the premium package is there, really, as a marketing technique. It acts as an advert for our value and experience, even though very few customers may buy it. “It will work wonders,” Mark says, “in terms of making people perceive that you have a high quality of service, and influences their thinking about the cheaper two options.
“By providing a spread of prices (and 3 is the optimum number) it encourages people to trade up. When you are presented with three options, which one would most people pick?”
With this idea you could create a subscription plan. Mark says: “if you can offer a package of services where your customers can subscribe on a monthly or yearly basis – and it’s good value, then it’s a good thing to do because it provides you with recurring revenue.”
Communicating Price and Implementing an Increase
Fear can come knocking and present itself with an overnight bag of negativity: ‘I don’t have the authority to increase my prices.’ ‘What if I lose all my customers?’ ‘I feel like a fraud!’ This concoction of ‘what ifs’ may well be linked to our limiting beliefs. Mark says: “having a well thought through pricing strategy will do wonders for your confidence in terms of explaining why you’re worth what you’re worth.” Once we feel confident that our offered services are valuable, realistic and married with an appropriate cost, we should communicate our prices without apology – whether that be via a menu visible on our website, or through a pricing breakdown provided upon enquiry.
Ideally, we want to be increasing prices annually. “If you don’t increase your prices by at least inflation,” The Pricing Coach says, “you will be going backwards.” We can tally an implemented increase with another annual occurrence – like a new tax year in April, for example. Inflation is an unarguable reason for upping our prices, as is because we can offer an increased level of value.
What other Vocal Coaches say…
BAST founder and vocal coach Line Hilton says: “When you put up your prices, you don’t have to put it up for everybody. If you give your clients enough warning, and if it’s in keeping with where you’re at and where the economy is – they get it.”
In the past, Line has increased her prices but didn’t implement it for her regular clients, stipulating that if they went away from sessions for a specific period then only upon returning would the new higher rate be applied. “You can offer people different prices,” Line says. “Sometimes I offer scholarships, but I want to see that something is coming from that person…that they understand that they’ve got to work for my scholarship price.”
“I have always been guided by the Musicians Union,” Manchester-based vocal coach, Hannah Smikle says. “Be confident in the value you bring: you’ve got training, you’ve got experience. It’s so much more than a singing lesson.” According to the Musicians Union, the current minimum teaching rate for 2019-2020 is £35 per hour.
Chris Johnson says: “By raising your prices you’re reducing your market size. That’s normal.. (You) go through the process of raising the rate, marketing, the importance of retention and improving the skills to deliver high value – then you move up from that. It doesn’t mean you have to price people out, as when you provide a lot of value in comparison to your competitors, singers do budget for it. If someone is genuinely hard up, and they value the training, they will have it less frequently. The better the training, the fewer lessons are needed anyway.
“If I say to somebody: would you pay £350 to have (said) ‘big’ problem removed right now? Most people would say ‘yeah!’ Yet, when somebody says it’s £70 for one hour, and you might need around 5 lessons, it somehow sounds like a lot more. That’s probably because we’ve been conditioned into a low price-per-hour view of an underpaid industry. But, you’re not paying for (my) time, you’re paying to resolve your problem and that is where value is.”
“Write down your pricing strategy,” Mark advises. “Who are your customers? How much are they willing to pay? What is your product/service worth? Why have you set the rates at the level you have?” Once you have a strategy you feel confident with, run it by a few people for their feedback: family members, colleagues – even customers.
So, with this in place, if we are considering a justifiable price increase and we are met with objection, let’s summon the wise words of L’Oreal: ‘You’re absolutely worth it!’
Or, something like that.
You can download a FREE pricing diagnostic sheet from Mark Peacock’s website by following this link: markpeacock.co.uk/services/free-pricing-diagnostic/. An updated version will be available from the Autumn.
If you have any other suggestions, questions or comments you can find me and the BAST Trainers in the BAST Facebook Group. To join click button below.