Pricing plays an important role in the success of any tutoring business. However, there is a lot of confusion about the best way to price your tutoring services and how to go about finding the right price. This article looks at pricing strategies for independent tutors and tutoring companies and how to research prices in your market.
Setting your Pricing Level
The first step in determining how much you should charge for your tutoring services is to determine what other tutoring services in your area are charging. You’ll want to focus on tutoring companies that offer similar services to your own tutoring business since there can be a large variation in tutoring prices for different types of tutoring.
The next step is to do some research just like someone searching for tutoring would. Search for tutoring services in your area online, check the phone book, ask guidance counselors about other tutoring companies. When you have a list of similar tutoring companies in your area you can find out about prices by calling them up and asking or checking their website for prices. You can also check online tutoring directories to find out what independent tutors are charging for the subjects your company offers.
If your company is new and you or your tutors have average experience and credentials then you should try to price your services a bit above the average price.
If your company has been operating for a while, you have satisfied customers, and you or your tutors have teaching experience and credentials then you should price closer to the upper range of comparable tutoring services.
Many new tutoring companies think they need to start with low prices in order to attract clients, but this is a risky strategy and can actually hurt your business more than help it. The reason for this is that if your prices are very low, you will be generating very little profit to reinvest into promoting your business. If you are paying tutors to work for you, you will also have a difficult time attracting and keeping high quality tutors which are extremely important for building your reputation and creating satisfied customers who will refer you to other clients.
Early on it might make sense to focus on an under-served segment of the tutoring market in your area. This will allow you to charge higher rates, and generate higher profits which will help you afford more marketing and better tutors. These in turn will help you establish a base from which to expand into more competitive segments of the tutoring market.
Tutoring Price List
Providing different pricing options can also help your business meet the needs of more clients. There are several pricing or billing methods you can use.
Pay per Session
This pricing option has clients pay before or after each tutoring session. This is a good method if your business does not have much of an operating history. It also puts new clients at ease if they are new to your business and are wary of paying for a longer period of time in advance.
Pay per period
Paying per period may have clients pay for a week or month in advance based on the number of sessions they will have during that period. This method is good for tutoring businesses because you receive the money up front and don’t have to worry about students forgetting to pay for each session. It’s more convenient for clients because they can pay for a week or month and don’t have to worry about writing a check for every single session. Some tutoring companies may bill at the end of each week or month, but for new companies it’s best to require payment in advance since this will allow you to receive payment for tutoring sessions before you need to pay your tutors.
Some tutoring companies sell prepaid bundles of tutoring services. Such as 10 hours of math tutoring or 12 hours of English tutoring. These hours can then be scheduled over the following months as the student schedules them. This method allows you to offer volume pricing which can encourage potential clients to commit to more tutoring sessions.
Adapting your Prices
The tutoring market is constantly changing so it’s important that you’re flexible with your tutoring company’s pricing. If your pricing structure is not helping you meet your business goals you simply need to try tweaking your prices or possibly your services. People are concerned with value so if you offer more value in your tutoring services you may not need to lower your prices or if you offer more value than you did a year ago then it might be a good idea to raise your prices.