Would You Rather Be the Apple Store or Wal-Mart?

There are those running around the industry teaching you how to be the martial arts school equivalent of Wal-Mart. Now for some that’s most comfortable and, I’d never claim that Wal-Mart themselves don’t have a profitable business model. 

However, I freely admit that I am most interested in developing – and, teaching school owners to develop the equivalent of the Apple Store rather than Wal-Mart or similar. Additionally, we are in a very different business from the discounters. They rely on paper-thin margins and the ability to “make it up in volume.” I would argue that we rarely have that opportunity. It’s either be premium or broke. There’s little in between.

Now, first let me explain. Among all retail chains in the United States Apple is number one by a wide-margin in revenue per square foot. The Apple Stores are number one by a wide margin in retail sales per foot at: $5,626, running a distant second is Tiffany’s at $2,974 per square feet. On down the list is Best Buy at $831 per square foot.

The other thing to keep in mind is that Apple across all of their products has a much higher gross profit than any of their competitors:
Obviously there are many reasons for Apple’s success. Clearly you can summarize it by having a high end product with pricing far above industry norms.

Let’s look at two options for your school. Very real options that I’ve seen in practice with various schools that I’ve evaluated.
Just to sum up this line of thinking. First, It’s much easier to run a highly profitable martial arts school with “premium pricing” models than with a low price model.

Second, If you are encountering too many prospective students who object to your current tuition price ask yourself two questions:
a. Are you REALLY showing the value of your program to prospective students? Review your advertising, your introductory process, the look and feel of your school, the look and feel of your staff (or, yourself) and the level of “proof” that you are providing for the positive outcomes of your program.

b. Are you “fishing from the wrong pond.” Too many schools just accept whoever walks through their door rather than actively seeking their ideal student. You are looking for students that can and will pay the tuition that you are expecting to charge and that will train with you for the long-term.

Option 1. Low-Price School

Option 2. High-Value Store

Another thought, if you currently have a school full of broke people — focus on sources other than referrals (word of mouth) to fill your school.

I certainly hope that you will review the value and quality of your martial arts program. Continually improve every element of your student experience and, the increase your tuition rates accordingly.

Ranking to Top 20 U.S. Chains by Highest Retail Sales per Square Foot