About this guide
The price you set for your lessons and for any extra products or services you offer students is more important than most people think. Even a slight raise or decrease can have a significant impact on your income over time.
While there are three guides dedicated to helping you set your lesson rates (check out BPL-08, BPL-09 & BPL-10), there's an important pricing stategy worth looking at. In this guide you will find out what price anchoring is, why it's so important and examples on how to use it properly.
You can use price anchoring when setting your lesson rates as well as anything else you sell on the side such as online courses or guitar repair service.
Why you need to understand price anchoring
Potential students don't look at your lesson rates in isolation. They don't check out your website, see your lesson rate is X, then decide whether they're happy with that rate or not. Instead, they compare that rate to other options. They jump on your competitors' websites and compare your rate to their rates and they look at online courses and lesson-based websites to compare your rate to those prices.
While you might think your rate is perfect, in reality it depends on what the potential student is comparing your rate to. If you think you have a good rate but the student can see four or five different options that offer a 'better' rate, you will lose that student. Even if your rate is better because you offer better service and benefits than the other teachers, you lose out because of price anchoring.
Price anchoring gives you a way of controlling the comparisons a potential student make with your rate. Instead of seeing your rate in isolation or comparing it to your competitors' rates, price anchoring allows you to keep the potential student on your website and persuade them into thinking your rate is perfect.
After reading this guide you will start to notice price anchoring used all the time outside of the guitar teaching world. It's an incredibly common strategy because it works so well. Let's look at how to use it in your guitar lessons.