Charge the Extra $5/$10/$100

We are less than 3 months out from the start of a new year, a nice logical time to change our prices. Best practice is to notify existing customers at least 60 days in advance of a price change, so this is the perfect time to start getting your ducks in a row.

Determining Your Rates

While it’s tempting to look at the rates of other instructors or trainers in your area (of expertise or geographic location) when considering your prices, and I do believe this is a solid guideline to start from, I highly recommend considering the 1/3 rule as a place to start when setting or adjusting your prices. As costs change for you, things like managing your cost of living or the services and supplies you use to keep your horses in top shape, it’s important that these costs are reflected in your prices. If you’re not sure about the rule of thirds, this post is a great introduction to the concept. 

Increased Skill

Every year that you teach or train you’re gaining valuable skills and experience in your chosen niche (if you haven’t chosen a niche, take a look at this blog post on how). This is what your students/clients are paying for. It posits that, like with other jobs, as your skill increases, so should your pay. Welcome opportunities to continue to learn and grow and let that reflect in your prices.

Consider Inflation

None of us are immune to the increases in inflation in recent years. We’re seeing it in the price of hay, gas, our vet bills and more. At the very least, I recommend an annual price increase in line with inflation so that you maintain your profit margins. I know it’s tough and you will likely hear some grumbling from some clients as they will also be feeling the squeeze of inflation, but it is necessary to ensure you’re not taking the hit by cutting your own profit. This is a quick way to put yourself out of business and no one wins when riding and training programs aren’t available to new, developing, and growth-minded equestrians - they are literally the backbone of our industry. 

The Impact

So what does this price increase potentially mean for you?

A little story based on my own experience. I taught riding lessons to 42 students a week via private and semi-private lessons (which I charged the same price for). Working 50 weeks a year, increasing my lesson prices $5 each, means I bring in an extra $210 a week, or $10,500 a year. That is a huge bump in our industry. That allows me to bring a new solid lesson horse into my program so I can take on even more students. It covers an unexpected emergency vet bill or rehab (like when one of my lesson horses tore his suspensory). It can help us all build an emergency savings for our businesses so we are better equipped to manage the unexpected (which we all know is inevitable in this industry). 

Even as a part time instructor with 15 students a week, a $5 increase in prices will bring in an extra $3,750 a year for you. What could you do with that? In my case, frankly, it would have made the difference in my being able to keep my full program running (this is why pricing for profit is so important) as it would have given me the financial bandwidth to find or lease another lesson horse, something I wasn’t yet equipped to do when I suddenly and unexpectedly lost the use of several lesson horses in a short period resulting in my having to shrink my program (not a fun message to send to students and parents, I assure you).

Are you a trainer? Would charging an extra $50 to $100 per month per horse give you the space to get yourself out there more and continue to develop your reputation within your niche?

Think from the Customer’s Perspective 

What’s $5 to you? The price of a decent cup of coffee … I would venture a bet that for the experience of riding regularly, the majority of people wouldn’t bat an eyelash at paying the extra $5. In fact, in my experience, when I have raised my own prices incrementally I have never had a student or client leave my program. Similarly, most horse people would readily fork over an additional $100 a month for a good trainer. We all know what an impact solid training makes someone's long term partnership with our horses. 

Most customers will buy a feeling and skill you provide, especially when they are looking to dedicate themselves or their children to the sport, not the lowest price (and if they do, perhaps it’s time to consider if you're pulling in the target clientele you want and what the ramifications are for your reputation; often clients who go with the lowest priced offer aren’t as highly committed, tend to be a bit more difficult because the price difference means so much to them, and have high expectations for results - which we all know can be highly dependent on the individual horse and/or rider. If you don’t mind managing these clients, by all means a low price will get people in the door who are dabbling in the equestrian world. Just consider the impact on your business, what you need and what you are looking for in your ideal client.)

Ways to go about Increasing Your Prices

I understand that asking clients to pay more for our services can be very uncomfortable. Unfortunately, if we want to stay relevant as professionals in the industry at some point doing so becomes unavoidable. If you have an established program, I recommend reviewing your prices at least annually to determine if an increase is needed. When letting your community know about an impending price change, update them via several means of communication so that the messaging is not missed. When I changed my pricing I included it in my email newsletter, posted it on my facebook page (this is a great way to encourage sign-ups too - you can run a deal for people who sign up for training or buy a package before your price increase date), and let people know when I saw them at their next lesson.

Sample language when raising your prices:

Hello [Your Program Name] Community. [Include reason why you are increasing - Examples: With the ever increasing costs to care for and maintain horses in our program, / With significant investment in our professional skills and expertise,] our program prices will be increasing by $[Amount of increase] to $[New standard price] starting [Date of increase]. This increase will enable [Your Program Name] to continue to provide you (and your horse) with with the level of service, expertise, and care that you have come to expect as a valuable client. Should you have any questions, please don’t hesitate to reach out. 

New to the Industry or Recently Did a Price Increase But It Wasn't Enough?

Don't Fret! You Can Raise Your Prices, too!

Consider keeping current pricing for existing clients for a period, like 3-6 months, while increasing your rates for new clients. Your current clients will appreciate it as a sign of loyalty and when you do raise the prices for them it will not be a shock to them either. They have had months of awareness that the adjustment would be coming. Your new clients won’t know any different, as the price will be the same for them until your next bump down the road. If you are doing this, I highly recommend bumping your price a bit more than necessary so that you can space out the time in between this bump and your next increase. This enables you to get everyone on the same adjustment period looking forward, which is easier to keep track of. For example, your current clients will be much happier with a bump in 3-6 months and another a year later, as opposed to 6-9 months later via an annual increase, so look forward to managing inflation through a longer period, like 18 months. By then enough time will have passed and you will be able to increase prices across the board for all of your new and existing clients without it feeling like you just did a bump.

If you are doing an incremental bump, adjust your communications as so:

Hello [Your Program Name] Community. [Include reason why you are increasing - Examples: With the ever increasing costs to care for and maintain horses in our program, / With significant investment in our professional skills and expertise,] our program prices for NEW clients/students will be increasing to $[New standard price] starting [Date of Increase]. As a valuable EXISTING client/student, [Your Program Name] will be honoring our current service rates until [Date of price bump for existing clients], at which point costs will be increase to match that of new clients/students. This increase will enable [Your Program Name] to continue to provide you (and your horse) with with the level of service, expertise, and care that you have come to expect as a valuable client. Should you have any questions, please don’t hesitate to reach out. 

Need help figuring out what rate you should be charging, with your wording and communication, or working through your why, reach out to me today for a 30 minute consultation.

Hugs and Happy Riding!

Kristin

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If you have questions, want help with your business operations, or want to learn more about the Equestripreneur Community, don’t hesitate to reach out. 

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Blog posts from Equestripreneur are not meant to replace individual professional advice, which will best inform personal circumstances.