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TINA: There INAlternative

* Wirtschafts woche Edition 18 dated 2.5.2011 Editor’s letter: TINA geht fremd; author: Roland Tichy

Hans Magnus Einzensberger (author) states European political stances practically forbids its citizens to think. He is quoted as saying: “There Is No Alternative” which quickly became an acronym: TINA*

What Einzensberger was talking about was the EU financial rescue pact and support for Greece and Portugal. European politics could not imagine a European state becoming insolvent and yet what should the normal European citizen believe when a European state debt is 140 per cent the gross inland product?

Exactly! TINA and TINA has another lover… (TINA geht fremd)

Should you give students and customers lower rates?

TINA happens when the trust given by the people of Europe and by investors is lost by governing politics. But what does this have to do with Freelance Teachers, you may ask. TINA is about the political situation governing your prices and whether you should lower your prices or give discounts knowing your gross inland product – the value of your teaching services.

How far must you go to support or pay for a student and customer’s wish for survival? What must you give up to accommodate your student’s demand? Let’s think about this…

What are you prepared to give up (either for yourself or for your family) to accommodate a student’s wish for a discount on your course prices or hourly rates? What must you forego because you are not able to give it or them to yourself or your family? The cinema or theatre ticket? The new pair of shoes? Or have the college or university fees paid?

In a world of “me, me, me” you might criticise this mentality. Yet, there is more behind the question of giving discounts than immediately apparent. It is for these underlying reasons that I want to put forward when you debate whether you should lower your prices or give discounts. So, should you, as a freelance teacher, reduce your course prices or hourly rates? In my opinion, I think not.

Why freelance teachers should not give discounts

In my opinion, the onus is not on the freelance teacher to give discounts. Here are at least three reasons why you should not give discounts because I believe it devalues your overall teaching service:

1.    Educational Investment to increase your level of expertise:
Often freelance teachers spend years working hard to gain experience in their teaching fields, and spend even more time and money in obtaining qualifications – all with the interests of student requirements and special needs at its heart. In other words, you are making an educational investment to become a better teacher for the student.

If you value the time and money you have invested in your own education, what unwritten law says students should reap the benefits of your educational investment and your expertise without even charging a fee for a better and more qualified teaching service?

My question to you:
Why have you invested in becoming qualified, or have spent long practice hours to attain a high proficiency level in your work, or spend long hours on research to increase your knowledge in your teaching niche? Does it sound right to you to devalue the worth of the work you’ve undertaken and the investment you’ve paid for by offering your increased lesson quality and expertise without being remunerated for your efforts?

2.    Free or Cheap as a method to attract new students and customers:
Will free or cheap lessons really attract new students and customers? What usually happens to the student’s learning motivation when the lessons are free or cheap? And will you find more paying students and customers in the long run? I question this assumption because I believe: No, you won’t.

I believe you won’t because a paradox develops.

Theoretically, cheap or free should lead to more students. Yet it doesn’t. What happens is your student developing a “take it or leave it” mentality.

What is this “take it or leave it” attitude?

It’s a mental state where the student considers only two choices. He either goes to the lesson (take it) or he doesn’t go to the lesson (leave it). There is little to no incentive to learn because free or cheap doesn’t have a monetary value or at best, very little value to his learning. In contrast, if the student paid a lot of money (value) for his lesson, he’ll place a higher value on his learning and be more consequent in attending his lessons.

Human nature traits show that people usually choose the easy way to do something rather than take a path that means work. Learning is hard work. So where is the impetus to turn up for free (no value) or cheap (little value) lesson if there is competition from meeting up with friends in the bar or a barbecue, or watching a favourite TV soap opera compared to a long trip to get to a lesson?

It’s a devoted student who keeps turning up for free or cheap lessons.

And where are you, the freelance teacher, in all this? You are always waiting for your student; your lesson is prepared and ready – for a student who more often than not doesn’t turn up, or cancels at the last moment.

How does an absent student recommend your teaching services to others when he hasn’t attended many — or any? But wasn’t that the reason why you were offering free or cheap lessons in the first place? To attract new students and customers?

Not only have you invested your time and your money in this student, but you’re losing out on future potential earnings and word of mouth recommendations, too.

My question to you:
Was this your intention?

3.    Free or Cheap as a banner to proclaim your qualified expertise:
Most likely the opposite is going to happen. It’s a question of perception…

In the eyes of the beholder – this can be anybody, but here we are talking about your student and customer. Expensive means high quality. And high quality has an unspoken guarantee of satisfaction attached to it. When your students pay well for their lessons, they believe they have purchased the best teaching service available and it’s tantamount to the student’s guaranteed success (satisfaction).

What perceived value do free or cheap prices mean? The teaching service is not going to be as good, but the price is within the student’s price range; it’s acceptable. Success (satisfaction) guarantee? Perhaps. But then again, perhaps not. The price of the lesson has no guarantee attached…

If your prices dictates a perception of quality and expertise, how does free or cheap freelance teaching services rank in a student’s eyes?

And here’s yet another disadvantage to consider…

There is always another freelance teacher who is more needy of a new student than you and is going to undercut your lowest price.

My question to you:
Are you prepared to compete for students and customers on pricing alone? Is it your aim to become the cheapest freelance teacher available in your district?

Summary

Giving discounts on your prices or hourly rates is tantamount to reducing the perceived value of your teaching services. You are devaluing your teaching service. Instead of finding new students, the opposite is more likely to happen. Instead of proving you’ve qualified expertise, reducing your price or giving discounts is going to prove the opposite. Then again, why bother to invest in your education and teaching qualifications – unless your aim is to increase your earnings? In order words, is it TINA… or will TINA find a new lover?

Giving discounts give the wrong impression and is not going to achieve the results you hope for. How you set your prices is going to determine how you find new students and customers and determine the kind of students and customers you will attract.

The e-book on Pricing for Freelance Teachers is almost ready. Pre-order your copy to learn how to set your prices for your freelance teaching services and attract the kind of students and customers you want to teach and at a fair earning price. Think TINA.


Can You Do Me A Favour?

I’d love to hear about whether (or if) you give discounts. Why? And for what reason? Did you regret it? Leave a comment in the Add Your Comment box below.

Be as specific as possible. The collective insight of the Entrepreneurial Freelance Teachers community will help us all realize what dangers (or exceptions) we can have when a student or customer asks us for a discount… 🙂


4 Comments (Add Yours)

  1. Re selling your services cheap, discounted or free:

    Look at the successful department stores – eg John Lewis in the UK. Their prices are generally higher than the typical cut-priced sloganed ones. You sense “quality” when you walk in their stores, you sense “knowledgeable” staff, you sense a “caring” attitude, I could go on. This year, John Lewis UK has paid bonuses of 3 months’ salary to its staff because they had another successful year – how? Because they maintain their prices and sell quality. The people who shop there know and want this, And there are lots of those people around. Quality sells itself!
    So the motto is, those looking for teaching on the cheap are not worth bothering about, those who want training from well-educated trainers will happily pay for it.

    QED.

  2. The only time I give a small discount is to university students who are producing their final papers. I see this as a possible investment in future business. When they get a job, they might remember me as the one who helped them to graduate in their chosen discipline.
    Hope lingers on!

    • Indeed! Hope lingers on. 🙂

      I can understand your thinking and still find I disagree with you on this point. Yes, I do believe your university students won’t develop the ‘take it or leave it’ attitude because they’ve an exam facing them that will ensure they ‘take it’. You will have happy students when they pass their exam — and they may well come back. However, what about those who fail their exams? What lasting impression will that leave on them?

      In the end, I know university students aren’t rich — having been a parent of three university students myself. 😉 I know the dilemma, and yet on the other hand the first question has real consequences: What are you prepared to give up (either for yourself or for your family) to accommodate a student’s wish for a discount on your course prices or hourly rates?

      Hope lingers on, but just how real are the chances for new work from these students? That is a question only you can answer, I’m afraid.

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