IF I had a pound for every time I had conversation with an ADI regards pricing of lessons, I’d probably be able to pay for this years family holiday. The subject of lesson pricing, what to charge and what others are charging. It is always a good topic of discussion.
It is a big question and no doubt we all have an opinion. It seems the current trend is to charge £35/£40 at the top end and a variety of discounted options below that. There are several things to consider when deciding how to price your lessons.
I will often have an ADI say “I am being priced out of the market due to cheaper lessons in my area”. The problem is that most people don’t know what to ask when they call to enquire about driving lessons, and the most obvious question is “how much do you charge?”. A better question would be “what grade are you?” or “how long have you been teaching?”, or perhaps more importantly “do you have the skills and flexibility to teach me in line with my requirements?”. Well, the client probably won’t say it in those terms, but I am sure you know what I mean. So don’t assume an enquiry has to be all about the price.
One obvious place to display your lesson prices is online. Some people will scan for pricing and if there are no prices they will quickly move on. However, one recent discussion I had with an ADI unexpectedly enlightened me on a different way of thinking. This particular ADI decided to update his website and not publish lesson pricing online. The result was a sharp increase in enquiries, which he was then able to filter with a specific answerphone message to say there was limited availability and only in certain areas.
Often it is reverse psychology that will be the deciding factor when choosing a driving instructor, not price. Most of us want what we cannot have or what someone else has, so making your school the most attractive and the somewhat unattainable option could be the key to success for your school.
Of course there will always be clients who want something as cheap as chips, but a consequence of this will be that the driving instructor will in some way have to cut corners. Making lesson prices clear and uncomplicated is just one step to offering a professional service that creates a feeling of value and quality.
With the best will in the world there is no point having well thought out lesson prices and then your terms of business are either non existent or unclear when it comes to your school’s cancellation policy. You only have to lose one or two lessons a week, which, let us say for this example are £35 per hour, that works out as £70 loss of earnings in total a week. This will bring your average 30 hour week earnings down from £1,050 to £980, which then equates to £28 per hour.
When clients see a franchised instructor they will often think a driving instructor works for that company i.e. they are employed and will be paid regardless of whether a lesson takes place or not. Making clients aware of the impact a cancelled lesson has on your business will promote understanding and hopefully less loss in revenue, for you the instructor. If there is trust and respect built up in your relationship as student and trainer, there should ultimately be less problems with late or last minute cancellations.
If all else fails a gentle reminder of your terms of business, which were hopefully signed by either the student or bill payer (in most cases the parents) helps to clarify that you are running a business and not a charity driving school. The problem is, it is very easy to be taken in by sob stories and tales of woe when it comes to clients cancelling a lesson. Of course there are genuine reasons and as a business it is important to use your discretion where appropriate.
Cancelled lessons can have a serious impact on your earnings, so making it clear is so important. After all, I am sure parents and students would not cancel a hotel or pre-booked event at short notice otherwise they lose their fee. This, as most of us already know, is common practice in other service industries and a cancellation notice period is often, if not always required. Hotels cannot afford to have empty rooms nor can instructors afford to have empty seats. I digress slightly, but as you can tell from the 40 above, missed or cancelled lesson do have an impact on your overall earnings.
Marketing yourself is just as important as advertising your car and having an all singing, all dancing website. Research is key when looking at pricing, make sure you find out what your competitors are doing and what they are charging. It could be that you offer something unique that has value i.e. you conduct lessons outside of normal hours or you have specialist knowledge in a certain area or field., you may also offer theory tuition, or offer students other benefits and perks, not available with other instructors in your area.
It could be there are limited instructors in your area teaching automatic lessons, intensive courses, or in a certain type of car. Ask around what friends and colleagues would look for and you may be surprised with the results, as it is not always price driven. Where there is a need and you have a unique selling point, this offers a great opportunity to try out a new pricing structure. Perhaps introduce a 3 tiered option so that clients can decide what price band best suits them, this may also eliminate the need for discounts on block bookings etc.
Working for a large franchise and leaving to work solo can be a big move for some, and indeed setting up terms of business and pricing agreements can be daunting. It is important to remember that just because you have moved on, you should keep your lesson price the same, I would even say there is an argument to put your prices up, as you now have to support yourself, particularly when it comes to marketing and advertising. Consider a special offer on your website to get things moving for a limited period or offer incentives to people when they recommend a friend or colleague. There are some people who are excellent at recommending to all their friends and families, and these sort of people are invaluable as they do all the work for you. Incentives can help to keep this ball rolling and the person doing the recommending feels valued in the process.
So I do not have a magic number or figure to give you all in terms of lesson pricing, it really is a case of research, research, research. Be of the mind to increase your lessons at regular intervals and not only will you feel valued, but you will be proud to have a company that is not staying static, but moving in line with new trends and customer requirements.