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Tutoring on Price Negotiations

August 22, 2019

I’ve got a soft spot for tutors. Tutors are often teachers who tutor on the side to make a little extra money, and I’ve got an extra special affinity for teachers, since I’m married to one. Consequently, I’m delighted to help a tutor in some small way with their pricing.

I recently visited with Ronda Youngblood, who had just started her tutoring business, Infinity Learning, while working in sales for another company. (See why I have a soft spot for tutors? They work very hard.)

She wanted to talk about her pricing because she was unhappy about her results, particularly the pushback she received from clients regarding her price.

We talked about several aspects of her problem, and a big slice of what I advised was “don’t.” Don’t negotiate your price. Ever. Your price is what it is.

The central issue, of course, is fear. Tutors (and lots of services professionals) fear that that if they refuse to negotiate, a client will walk and they’ll lose that revenue. I know because I’ve felt that fear myself. All service professionals have.

The fear is even sharper with a new business. There’s a voice in the back of your head, nagging you about the need for revenue. What that voice isn’t telling you, though, is the problems associated with taking on too many clients at the wrong price. One of those problems is that you end up working too hard for too little revenue, and you end up resenting the very clients you got in business to serve in the first place.

It’s hard to internalize that the universe is abundant, and that the right clients for you and your practice are out there, even if you turn down the one right in front of you badgering you about how expensive you are. I know some people read this and wonder what kind of “woo woo” I’m on, but it’s true. I’ve seen play out too many times, not just for myself but others.

I asked her if she’d ever turned down a client based on price.

“No,” she said.

“You not officially in business,” I told her. I’ve written on this previously; I explained that you’re not officially in business until you’ve turned down a client based on price. Once you’ve done that, you’ve passed one of several important milestones on the road to building a successful business.

A few weeks later, both of us were recruited to be photo stand-ins for a mutual friend of ours running for office.

“It happened, John,” she told me, “just like you told me it would.”

She’d turned down a client based on price.

“It was hard to walk away,” she said. “This lady had two children she wanted tutoring for. That’s hard to turn down.

“But she kept after me about my price. Also, there was something about her I really didn’t like. I didn’t have a good feeling about what working together would be like.”

An important point here:  clients who bang you around about your price are often very difficult to work with. Gut feelings like the one Ronda described are ones you should pay attention to.

“I said ‘no,’” she continued. “I can’t tell you how hard that was. I knew I wanted that business because she had two kids, not just one.

“But you know, you were right. That same day after I had turned her down, another client called me about my classes. This lady didn’t hesitate when I told her the price. I got confirmation that what you told me is right!”

Yes, the universe gives. Those stories don't work out so neatly and quickly, but it’s great to hear about them when they do.

Congratulations, Rhonda! Thanks for allowing me to use your name and relate this story. Keep up the great work you do for your students!

 

Photo Credit:  Kyle Valencia, Valencia Productions

©Ray Business Advisors, LLC and John Ray

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About me:  I’m enthusiastic about how changes in pricing strategy can significantly change profitability for a business and enhance life choices for business owners. I live this passion through Ray Business Advisors, my outside CFO and business advisory practice, in which my pricing is exclusively value-based, not hourly. I work with business owners on how they can change their pricing not just to increase their profits, but better serve the wants of their customers. Click here to learn more or call me at 404-287-2627.

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