| In 1974, the tuition at the Florida Karate Academy in | | | | told me he had more than 20,000 students in over |
| Largo, Florida, was a 12-month contract at $25 per | | | | 35 schools at the time. I visited his headquarters and |
| month. If you just raised tuition three percent per | | | | saw the August revenue gross numbers from all the |
| year from that point, you would have tuition of | | | | schools on the computer. It was only the third week |
| about $60 per month in 2004. When I opened my | | | | of what is typically the slowest month of the year, |
| school in 1986, my tuition averaged $75 per month. | | | | but the lowest gross was in the mid-$30,000s, and |
| At three percent inflation, this would total $127 per | | | | the highest was the mid-$90,000s. |
| month today. What other service has only increased | | | | Not only was Tiger not scared to charge higher than |
| three percent per year? Not many that I can think | | | | the competition, the market was not afraid to pay |
| of. | | | | for it either. |
| While many schools are more in the $60 range, | | | | Your tuition rate and how it is presented will play a |
| others are north of $200 per month. What is the | | | | fundamental part in your school's image. Price is the |
| difference? The most successful martial arts school | | | | main factor in a prospect's decision to join if you |
| owners highly value what they do. Tiger Shulmann | | | | make it the main factor. If the most compelling |
| said this in an interview in my Martial Arts Professional | | | | reason for someone to join your school is that you |
| magazine in 2001: "I'll give you an idea of what I think | | | | are cheaper than the next guy, you are putting all of |
| about the amount of money that we charge for our | | | | your eggs in the wrong basket. |
| classes. $1,500 doesn't scare me at all to charge for | | | | Price is a factor, but not the factor in whether the |
| martial arts training. I think it's too little, actually. But | | | | prospect moves forward to join your school. If a |
| we have to stay somewhat within the industry's | | | | prospect has shopped other schools, then your |
| standard." | | | | tuition will naturally be compared to the other schools. |
| His implication is that he would charge more, but the | | | | That doesn't mean the lower price wins. It's just |
| industry is holding him back. Tiger clearly values what | | | | another point of comparison. If the prospect has not |
| he does. All the top school owners do. Notice that | | | | shopped other schools, and most do not, your tuition |
| the first thing he said was he was not scared at all | | | | indicates the value you and your current student |
| to charge $1,500 for training. Was he also saying | | | | body place on the training. It also begins to establish |
| other people might be scared to charge that | | | | in the prospect's mind what to expect in the school. |
| amount? Would you be scared? This is a guy who | | | | |