I noticed yet another argument about lesson prices on a forum. What always amuses me is how whenever one starts – and it is no exaggeration to say that you get at least one a fortnight, and they’re always frequented by the same people – they all behave like they’ve 
never talked or even thought about the subject before.
Let’s get a few things straight.
If you make introductory offers – offers which are totally unconnected to your normal price – that’s your business, and good luck to you. Just because you’re offering something as “buy one, get one free” doesn’t mean you’re giving that offer away all the time to existing customers. You’re dangling a baited hook in order to grab new people and show them how good your product is.
However, if you word your offer in such a way that it makes it look like you are also lower priced overall than everyone else, then you need to start thinking a little harder about how you’re going to avoid crashing and burning. Your “special offers” might snag a few people, but if the reality is that your price jumps dramatically at the end of a long block of cheap ones, you’re gong to lose a hell of a lot of them unless you also charge stupid normal hourly rates. Furthermore, by cheapening the entire industry with your ridiculous advertising, you’re also causing untold damage to it.
There is one cowboy-looking outfit (which appears to have originated somewhere in the North) advertising copiously on Google at the moment with a “10 lessons for £99” offer. Their website is purpose-built to hide the normal lesson price. However, they offer a 6-hour retest package at £150 (or £25 per hour). They also offer the same package but with a test thrown in for £225 (that means they’re charging you £75 for the test – the DSA only charges £62). You have to assume from this that their norma
l hourly lesson rate really is around the £20-£25 mark.
You see, there’s a world of difference between “first lesson free if you book 10” and “10 lessons for £99”. One of them you can offer to existing customers time and time again, it’s attractive to them, and it will keep you in business. The other is a guarantee that you are going to crash and burn at some point. You cannot expect people to accept a doubling in price after they’ve had 10 hours to accustom to the introductory price!
Offers which last over long periods are not deemed as “offers” by the people who take advantage of them. They come to accept the price as the norm, and that is detrimental to the comedian making the offer and everyone around him. HE won’t be able to climb out of the pit he’d dug for himself, and OTHERS will get pulled in.
Even if you use weasel-words to hide the price hike – perhaps by spacing the “cheap” lessons out over an entire course to try and force people to stay with you – there is the quality of the service you offer.
You can pretend you’re a great instructor until the cows come home, but if you’re trying to be one earning half as much as you could be doing, then the reality is that you’ll be a lot less “great” than you’d like to think.
It’s worth pointing out to the general public here that driving instructors DO NOT earn £25 an hour, even if that’s what they are charging for lessons. To start with, “£25 an hour” would only apply as a comparison with other salaries if the instructor was teaching for 40 hours a week. Most haven’t a cat in hell’s chance of doing that amount of work (it’s why they make stupid offers and drop prices), and are only working maybe 20 hours. Immediately, they are only making £12.50 an hour.
Even if we have an instructor who does work 30-40 hours most weeks, there is the travelling time to factor in. Add half an hour for every hour of lessons and you have the total amount of time the instructor is “at work”, if not actually “working”. Someone teaching for 40 hours could be out of the house for 60 hours or more. If you want to put a price on that dead time, it means our fully-booked instructor is really only making £17 an hour, given that he is out of the house for so long.
But that is nothing compared to business overheads. Any instructor who reckons they are paying less than about £100 a week just to keep a car on the road is a liar (at best, he is just not representative of the majority, who ARE paying at least that to maintain a car). Simply having the car sitting on the driveway costs £2.50 per hour based on a target 40 ho
ur working week, but then you have to put fuel in it if you’re going to use the thing. If you do manage 40 hours of tuition, and if you’re doing a decent job of teaching, most normal cars will take around £200-£250 of fuel – or let’s say £5.50 per hour.
Even if you’re an instructor who reckons you’ve got a Magic Car which runs on Pixie-diesel, you’ll be spending at least £2-£3 per hour equivalent on a 40 hour week. Your £25 per hour turnover – already reduced to £17 per hour by the number of hours you have to stay out – is now down to £9 an hour.
So what you have to ask yourself is how you can finance a “10 lessons for £99” offer. What will you do if you have six pupils – maybe more – all taking the offer at the same time? And don’t forget that the comedians selling these offers WON’T be working 40 hours and WON’T be charging £25 an hour, so their equivalent hourly rate will already be much lower than £25.
Could someone really survive on what could effectively be as little as 90p per hour profit?
I think the answer is fairly obvious. So the next thing that happens is the ADI in question will try to cut his overheads, and the only one of those he can get at immediately is his fuel costs. In other words, lots of talking, little driving, and more lessons required by the pupil. You can see how it spirals downwards, can’t you?
Unfortunately, none of this is obvious to many ADIs out there – and I make no apologies for pointing out yet again that ADIs in general are certainly not renowned for being the brightest group of individuals on the planet.
By all means, make offers to attract business. But for God’s sake try to understand the effect that long-period offers deliberately designed to make you look cheap have both on yourself, and the industry as a whole.
And stop keep trying to justify it.
If you could charge £20-£25 an hour, but don’t, then you are an idiot and you’re deluding yourself if you think you’re doing anyone any favours.