On one of my Google Ads I noticed someone offering the first lesson for £1!
Admittedly, it was an introductory offer, and after that normal prices were £20 an hour (or £18 an hour if booked in blocks of 10 hours) – but this was in an area which is one of the most affluent in the country, and where the national schools charge £25 an hour!
It’s worth just emphasising this point, because ADIs are more than happy to make up any weird and wonderful story to explain why they don’t have any work, and yet conveniently miss the truth. So…
An independent school operating in an area which can easily command £25 an hour, and which is in the most populous part of the country, is offering the first lesson for £1 and hourly rates of between £18-20 thereafter.
I won’t suggest that all the reasons ADIs cut their prices are like this one, but a lot of them are: they are cutting prices unnecessarily, then trying to blame it on certain national training establishments (one of them in particular tends to be their preferred flavour), the DSA (for not capping the register), other ADIs (who have cut prices more than they did), and so on.
It’s the same round this way. You can easily charge £24 or £25 an hour, and yet people are charging under £20 in the mistaken and desperate belief they will steal all the business from the big schools and become millionaires!
Not long after I posted this, I saw another Google Ad advertising “5 for £55, and £15 an hour after that”. When I looked at the website, it said that £15 is a “limited time offer” – it didn’t say how long the offer is limited to, but what it did do was say:
Compare our standard hourly rate with other driving schools in your area.
- Us – £18.95
- AA – £26.00
- BSM – £25.25
- Acclaim – £22.00
- Red – £21.00
- ?????? – £20
- Bill Plant – £20.95
I couldn’t see who that second to last one was – some of the graphics are very messy – but the point is that in an area where the going rate is £25-26 an hour, this outfit is charging £18.95 as standard (and £15 for a “limited time”). Even normally, with block bookings they are charging £17 an hour.
This is suicidal. These people can’t possibly have considered how much it costs to run the car, and what hourly wage it puts the ADI on. They’d be better off serving orders at McDonalds.
It all comes down to desperation due to not understanding business.