Why does one seemingly identical martial arts school fail while the other thrives? The variables are innumerable – industry trends, state of the economy, star power in the sport etc. – yet it’s a question every emerging and established school owner must ask themselves. Zen Planner recently dropped a report aggregating data from 350 martial arts schools from around the world. The goal: identify easily replicated trends among our industry leaders. The results are simple – charge the right price, don’t discount student agreements, utilize your space and understand your costs to a precise degree. Although simplistic in nature, these findings should prove profoundly useful when put into practice.
I want to talk for second about two of these findings – charging the right price and not discounting. This really comes down to understanding the psychology of your customer. We all know of a product that was simply too cheap to be of quality. This is no different for martial arts schools – your product is your instruction. Don’t undervalue your services – charge the price that you are worth.
The difference between lethal ignorance and lifesaving expertise or rash behavior and emotional command is a difference you, as a martial arts professor, can provide. Remember, not only do you teach self-defense, you also teach your students how to be a better person. How does one put a numerical value on such teachings? There is no right answer; this will always be a subjective claim. What you can do, is begin to emulate the leaders in the industry. Overwhelmingly, those who run successful martial arts schools put a higher value on their instruction.
Secondly, refrain from offering discounted student agreements. Empathize with your students for a second. If you were to receive a discounted price for the first two months at a new martial arts school – say at $60 a month – how would you react to a $100 price hike in the third month? The answer is not well. Often times you will subsequently find yourself negotiating a middle ground in order to keep their business.
Offering discounts actually makes a lot of sense. You want to share a unique system that you’ve mastered over many years and have found incredibly valuable. Unfortunately, we’ve found the adverse effects of discounting hard to reconcile. Let me share a brief anecdote from one of our clients. After reading our benchmark report, one of our customers emailed in taken aback. They pulled reports and discovered had lost close to $20,000 in revenue as a result of discounting too many memberships. Don’t put yourself in the position of having to close the doors due to accumulated revenue loss.
In many instances businesses are too quick to ask “what’s the x factor that’s making this other business prosper?” If you’re struggling to keep existing students, bring new ones in and increase revenue, this is the wrong question to ask. Our benchmark report is about getting down to the basic principles of running a business – have the price accurately reflect the value of your instruction, understand your customer, optimize the space you’re using and have a complete understanding of costs.