Clear-Cutting Students
You can’t clear-cut a forest and expect to return next year and harvest another tree crop. You can’t fish out a lake and then return next week to catch more fish. You can’t sell martial arts lessons to people in your community, with a win-lose proposition, and expect the well not to eventually run dry.
A win-lose is when one side of a transaction wins all the benefits and the other side doesn’t fare as well. As you know, a win-win is when both sides feel they have a mutually beneficial deal.
A typical win-lose in the martial arts “business” game is when the school wins a considerable amount of tuition for untaught lessons, and students receive lessons that don’t thrill, chill and/or live up to the promise of the original “sales talk.”
The school’s position is, “Hey, we do what we do, you saw it, and you bought it. Done deal.” The student position is, “I was excited by the promise of what you were selling me, but now I’m not as thrilled.”
Now, you, like I have in the past, might say or think, “Hey, you just have buyer’s remorse. I have (or will) live up to MY end of the bargain, now you live up to yours.” Well, that’s all fine and dandy, but the truth is many school are great at sales – and suck at long-term service.
Yes, yes, I know. Charging students for long-term courses and accepting advance payment for those lessons is a standard method of operation in our industry. Paying big bucks for dance lessons is (used to be?) a standard method of operation in those rip-off dance schools, the ones that fleece enormous sums of money from seniors. Just because something is a standard method of operation doesn’t mean it’s a good policy.
There are currently martial arts schools in our industry that have a spoken or unspoken philosophy to consider prospective students as “short-timers” – and who intentionally try to convince those students to pay in advance for lessons that the schools anticipate they will not take. The policy is: Get your cash now, up-front, because you and I both know the student is fickle – and will probably drop out.
Well, that is a win-lose. The school wins, the student loses. It’s one of the reasons that state governments have, in many cases, regulated what the dance industry can or cannot do, and it’s why the same thing is happening to the martial arts industry. When you operate with a policy like that, you make plenty of money fast – but eventually there are no more willing prospects (you either fish them out – or word-of-mouth makes you change your pricing policies).
The bottom line is that you have to price your lessons in a way that still fulfills your financial needs, but that doesn’t put you in a win situation – and your customers on the losing end of the deal.
My Suggestions
1.      Don’t allow new students to pay in advance for lessons until they’ve been with you for 90 days, minimum.
2.      Offer an up-front solution to students who pay or enroll for lessons in advance that allows them to receive some money back or cancellation of their course, but at a higher pre-negotiated, per-month or per-class rate.
3.      Develop a business plan and method of operation that doesn’t require you to take big, up-front payments to survive.
Offer Full Disclosure
One of the recent, unhealthy business practices in the martial arts industry is the pricing/curriculum policy: schools “reserve” some of their curriculum for courses that cost more money. In other words, students enroll in the first “basic” course, but are not allowed to do the exciting “stuff” or curriculum until they join the next course.
Now, we all know that has nothing to do with teaching the martial arts – and everything to do with money. The question is: How do we extract as much money as we can from our students?
Well, I don’t have a problem with asking and taking money from my customers. What I have a problem with are schools that deceptively initiate this idea upon unsuspecting parents/students.
Full disclosure of all prices and policies, before a student enrolls, is the way to do this correctly.
