3 Guidelines for Raising Piano Tuition – Should I Raise in 2020?

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NOTE: It’s now 2022 and I have updated this article to include thoughts and helpful questions to consider at the end of this article. But please read the entire article to help give balance and perspective to the difficult situation in which we find ourselves.

If you’ve been a part of the ComposeCreate® community for any length of time, you know that I always advocate for you to charge what your services are worth, not to undervalue yourself, and to give yourself an annual cost-of-living increase. But you also know from the “Best Stress-free Business Practices for Your Studio” that there have been years in which I personally did not raise my prices at all and those were deliberate decisions that I believe were the right ones. Plus, I do believe it’s possible to raise your rates too high.

So with all of these positions that we’ve discussed, you might be wondering, “How in the world does one know whether to raise piano tuition in a given year or not?”

So I wanted to share a few guidelines about tuition increases, especially since Covid19 and the weak economy is a huge factor in 2020.

Before I begin though, it’s important to say that if you are not already charging what your services are worth, then this discussion of whether or not to give yourself a cost-of-living increase is moot. Please make sure that you have a plan for how to start charging what you are worth (though you might need to wait to make that change as you’ll see in the last point) and then these principles will make more economic sense. There is no set rate that is right for every teacher, so you’ll need to figure that out for yourself. However, the principles and system discussed in the “Best Stress-free Practices for Your Studio” online workshop can help with that.

So here are some general guidelines for cost-of-living increases:

Most of the time, you should consider a cost of living increase.

When the economy is good and living is pretty peaceful, a yearly cost-of-living increase is pretty standard. Of course, you always have a choice about whether or not to raise piano tuition, but there’s no reason not to at least consider doing it every year. Not giving yourself a cost-of-living increase in “good” years can severely limit what you can do in “bad” years and can put you in a very unhealthy financial place. Read “Why You Should Institute Yearly Price Increases for more information on this.

Some of the time, you should consider changes, but not a price increase.

As I mentioned in the “Best Stress-free Business Practices for Your Studio,” I didn’t always give myself a yearly cost-of-living increase. Here are some examples of other things you might want to do instead of increasing price:

• Give yourself an additional week off of lessons
  This makes your “price per lesson” higher, but it does not increase the actual out-of-pocket expense for a family
• Make other big policy changes
  For example, if you know you need to completely overhaul your make-up lesson policy, you might want to focus on making this change instead. Changing some policies like make-up lessons can be a huge stressor to yourself and your families (though it will be less stress in the end). So adding a price increase on top of a change like that might increase the risk of losing students.
• Eliminate some of your “extra” offerings.
  Perhaps you offer an extra performance class every month and that is becoming taxing to you and your family’s schedule. Perhaps the winter recital in December is becoming too much for you to handle (it is a stressful time of year!) and you’d like to take a break from it this year. Perhaps you want to try replacing a week of private lessons with group lessons instead.

All of these changes are shifts in your work load (hopefully for the better) and can give you an increase in energy. In many cases, this shift in energy is worth far more than a shift in price and I can guarantee that there will be parents that appreciate that you did not increase your prices that year.

Occasionally, you should not consider any price increases or make big changes.

And so we come to this last option. You can probably tell that I think this is the best option for this year. Here’s why it’s especially relevant this year:

• The economy is bad. Economists knew and predicted a recession long before Covid19 happened. I’ve been reading articles about this for about a year and the prediction was that the economy would go south sometime in 2020-2021. The pandemic just made it happen quickly. As a personal note, the last time we had a serious recession was back in 2008 and that was a year in which I did not increase my price. It was just too risky then. But this year is far worse! Think about it this way: retaining students in this economy might actually be a raise unto itself.
• Unemployment is 13.3%. (NOTE: This article was written in 2020! So the stats are different now. Please see the bottom of the article for how these things can help you this year.) Sure, that seems to be a direct result of Covid and by some reports, it’s improving. But the facts are still that unemployment is very high right now. You’ve probably already seen some families in your studio that have been affected by this, but even if all your parents still have their jobs, no one is immune to at least the fear of job loss.
• Covid19. Need I say more? A worldwide pandemic is a stressor that none of us could have imagined. But we don’t even know how seriously it is affecting us. And I am sure that how it is affecting us is far worse than we think it is. Suicides are increasing, depression is skyrocketing, medications for anxiety and depression are up 34% since Covid. This is a very unusual set of circumstances and instituting a price increase on top of that is going to be too much for some families – even those who seem to be doing okay.
• Parents are under a lot of stress. I cannot even begin to tell you how much the stress load has increased for parents these days. Of course, forced home-schooling almost put many of us over the edge. And technically, we’re getting a break from this during the summer. But the added stress of not knowing what schools are going to do in the fall, whether to vacation or not, how to break the news to your kids, what is safe and what is not for your family, etc. is completely exhausting to many parents right now. Sure, everyone is different with how much it bothers them, how careful they want to be, etc., but no one is completely fearless in a world that has been completely turned upside down.
• Many parents are already re-thinking whether or not to continue lessons. It’s true. In any given year, you might be surprised at how many parents re-think the value of a recurring service. But when you add all of the things I’ve mentioned above to the mix, I think it’s pretty certain that you’ll have even more than normal. Obviously, this affects those who have lost their jobs already, but again, even the uncertainty of many jobs makes parents more frugal and careful with how they spend their money. And many are thinking about whether or not they have a cushion should another crisis or change in job status occur. Forcing parents into a decision of whether or not to continue lessons at an increased rate might just push those undecided families over the edge.

You probably already know the things I mentioned above, but sometimes it’s good to list it all in one place. Covid19 has been devastating to everyone in some way. And it’s been hard for piano teachers. In mid-April, we conducted a survey of ComposeCreate® teachers and found that 68% of piano teachers had lost at least some of their piano students. Only 32% had retained all of their students:

Obviously, any piano teacher can charge or raise piano tuition in any year as much as they want. But we just have to face the facts that this year might not be the best time to do it.

One last thought: It’s far easier and less expensive to retain your current students than to find new ones. And this is especially true when things are so dire. Your marketing efforts in 2020 will probably be far less effective than ones in 2019 when things seemed stable, so it’s even more important to realize that retaining your current students, even at a lower price than you want, will probably yield more income for you than if you were to raise your rates, lose students, and have to market to find new ones.

Sigh

I hate this. I hate the trouble and fear and sadness and conflict that the pandemic has caused. It’s not the way things were meant to be. But acknowledging our losses and facing the realities of life in 2020 can only assist us in doing what is best for ourselves and for others.

This article is obviously my opinion and you always have the freedom to do whatever you need or want to do. You may not agree with all my thoughts and that’s okay! But I write it hoping that the perspective is helpful and will in some way will help your studio to flourish.

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Other Questions We Should Be Asking – 2022 Update

I’m adding on to this article in 2022 because it’s much worse right now than it even was back in 2020. In addition to all the things I’ve suggested we consider above, some of other questions we should be asking include:

• What kind of cost of living increases am I actually seeing in my own life?
  Maybe the price of your supplies hasn’t gone up, but food has. Maybe food has gone up, but not your business insurance. Maybe gas has increased, but you don’t really need to buy any big instruments this year. The fact that not everything has increased or that you don’t have plans to buy anything big might curb the amount of price increase that’s needed. Perhaps you don’t need a 7-8.3% increase in your tuition this year as is reflected in the inflation rate. Perhaps you can get by with less than that so that it doesn’t tax your families even more.
• Could I possibly make exceptions for families that will need to quit because of an increase? 
  If you are willing and able to make some exceptions so that you don’t lose students (assuming you don’t have a waiting list), keep a few things in mind. 1. Make the increase that you think you need to make first and don’t mention any exceptions. If families need to quit because of the increase, they’ll let you know and then you can talk over an exception with them. 2. Make sure the exception has a time limit. Perhaps you’ll make an exception to allow them to keep the current rate for six months. Then, you can re-evaluate. But it’s important that there is a time limit so that you can re-visit the exception later.
• Am I letting fear keep me from doing what I know I need to do?
  I’m guessing that a majority of teachers will need to increase their tuition in 2022. So please don’t let fear of what might happen keep you from doing what you need to do. You own a business and your business needs to stay in business to benefit others. Do what needs to be done and then see what happens and respond appropriately.

Read More:

• Best Stress-free Business Practices for Your Studio – Online Workshop
• Make-up Lesson Boundaries – Are you enabling bad behavior?
• Editable Tuition Brochure – Help families understand what your tuition covers