6.2.1 Pricing Belief System

Successful Moo Duk Kwan Studio Ownership

6.2.1 Pricing Belief System

If we create and deliver exceptional services around our art, great experiences and high value, we deserve to be compensated properly. This requires us to make our studios the best they can be.

Few buyers of services (no matter what those services are for business or personal use) want the cheapest price. Intelligent buyers want or can be encouraged to prefer the best value of the services being offered. When there is a lack of pervasive information from the service provider, a potential student will gravitate to the cheapest option due to a lack of education.

We need to be able to communicate the benefits of Soo Bahk Do® and the differentiators of our studios in a clear manner which sets us apart from the competition of general fitness and other martial arts. When we’re not able to communicate these key concepts then the potential student will default to the lowest price, due to our inability to connect with the consumer. It’s our issue, not theirs.

A wide range of people purchase the same product or services as different price points not because of the product, but the people buying. Case in point, Starbucks. It’s only coffee, right? Something else to consider – if you went to 10 different studios who all asked $100/month (for a similar program) and you priced yourself at $50/month would the potential student view your quality the same as the other studio charging double? The perception of value also plays a part of the pricing.

A good way to communicate and think about your rates can be summarized in a quote from Garaguso Sa Bom Nim: “Our tuition reflects our value and is both fair and firm.”

Over time it’s easy to keep your rates where they are while costs continue to rise and the market adjusts. When we adjust rates to their proper value over time, we must learn how to break the negotiating habit cold-turkey. We mustn’t deviate from our set prices. We can have different value programs based on timelines (12 weeks, 6 months, 12 months, 36 months, etc.), however we must remain firm on expectations. It’s a difficult process. Many of our customers and students have been “spoiled” by being offered too many discounts over time. If you are having a difficult time because you are sentimental or emotionally empathetic, or scared to have those conversations, then you need to train someone else to do it. Not everyone is comfortable having those tough conversations.

Ultimately we cannot protect our price strategy without training, ongoing coaching, changing staff, changing incentives, etc. It’s a constant process. Anyone can come up with a long list of reasons why someone can’t implement and enforce a pricing strategy. But, in reality, we must know exactly why we change what we change. It’s imperative to keep your business afloat. We are all able to do it.