We cordially invite you to read the second and last part of the interview with Katarzyna Kaczmarek, the founder of WOW Holistic Language Center, about updating the price list and communication with clients. And as a reminder – we encourage you to read 1 part of the interview.

How to communicate price increases to customers? How you should talk to them about prices? I do not know if you are under the same impression, but I think in Poland the subject of money is still taboo. And every communication of a raise or change in the price list is connected with the stress not only of the school owner but also of the secretariat and administration. Mainly because they are on the front line of contact with the customer.

I suggest you start with yourself and realize your financial blockages. If deep inside we believe that earning money will bring envy, hatred of others on us then by making raises we can indeed bring it on ourselves. Make a deal with yourself and agree that making money for something of value you give to people is OK. You make money to grow, support your students, to realize your dreams. Money is just a means to realize a lot of important experiences. If our company frustrates us, doesn’t earn money for us, we work a lot, but the quality of our life does not improve, it’s the quickest way to burn out and we will close the school. If we agree with ourselves that earning is OK, we must work with our administration as well. We need to make sure that the administration understands us, takes our view, and knows where the raises come from. And of course, we have to keep in mind that it cannot be that we make money, but we do not allow other people to make money. So e.g. we pay little, we don’t favor the staff and the teachers, as this affects the energy of the place. If everyone’s okay with a raise, there’s no need to communicate. Just create a nice, up-to-date price list and send the information that here we have the current price list. Let’s not explain ourselves, because we immediately make others feel that the raise is a problem.

And that we feel guilty.

Yes, this guilt will be felt immediately. I start from the premise that I have the right to introduce a raise because the service I offer is of the highest quality.

Recently, language school owners across groups and forums have been asking others if they are increasing the price list this year and, if yes, by how much. Do you have any golden rule on how to raise prices or calculate the value of your courses? Do you think it’s a good idea to consult with other owners?

This is a very difficult question. Each of us operates in a completely different environment, in small towns the situation is different than in big cities. I don’t have the golden advice, but for me, the moment when I boldly raised prices was every change I made. For example, the organization of the group, which was not there yet, namely Saturday and Sunday groups for young children. And these are expensive classes, but from the monthly perspective, this price is not very high. Even though, given the market situation, per unit, these are quite expensive activities. When I moved groups from rented rooms to my beautiful studio, it was also accompanied by a quite significant price raise. And the way I communicate it is that the raise for regular customers is always less than the price for new customers. Such an increase should not be more than 20% at a time, but that is only my opinion. Everything is a matter of what customer you want to reach. And how brave you are to communicate your competitive advantages. If you want to compete on price, which I don’t encourage you to do, don’t raise prices. I prefer to have fewer students who pay more because it is less work, less worry and financial comfort is incomparably higher.

What if this model that worked for you doesn’t work for others and customers start to leave. How do you deal with departing customers?

I do well with outgoing customers because I have a business model where customers don’t stay long. It’s a year, and then they become independent and recommend us to others. I had this situation when the increase meant that the customers were resigning. Sometimes it was whole schools because one mom told the other that this Kaczmarek was falling over and raised prices by 20 zlotys and we will not go there anymore.

Please tell me, are you able to determine what percentage that was?

Yeah, about 10%-15%.

So relatively little.

Yes, I stick to the 20% ceiling. If it causes customers to go away then it’s high time for us to be honest with ourselves. I also had a situation of price harmonization between two studios and I informed the students by phone about a significant increase. The group formed after all, but what happened after that? Two months after the start of the course and the signing of the contracts, the whole group agreed to write to me that they were demanding a price cut from me because the increase was unfair. Even though everyone was informed well in advance. Unfortunately, I met them halfway, but it turned out that these customers are completely disloyal. At the end of the year, they terminated their contracts and contacted a teacher from my school and offered her to work together outside WOW. What I learned is that those customers who are restitutionary, even if you’re crystal-clear to them, will go anyway. It’s because they have different values than we do.

So you’ll never really please everyone, and the customers you’ll fight for on price will cost you more time, nerves, and stress than it’s worth.

Yeah, and they’re disloyal because they’ll always go where it’s cheaper.

Kate, last question. It is said that the pandemic is not over. How do you deal with something that is hitting the language school industry so hard?

I would advise you to think honestly: is there anything I can offer to customers that nobody else is? Dare to accentuate your uniqueness and show what things look like in your school. I would familiarize customers with this eventuality and show what your online classes look like. Building brand experience is possible both in the stationary model and online. Such a process of educating customers about what they can do for themselves at this difficult time and how they can grow with your help. It all gives a sense that you are taking care of a person; and it is not just a course, but also an experience and a language process that people consciously choose. If we choose the road of uniqueness and I communicate it skillfully, we will win not only the credit cards of our customers but also their gratitude. I would have gone that way. We want to appeal to people’s emotions, not their rational calculations. Let’s show our customers that we understand them.

Thank you so much for agreeing to be my guest today and to pass on your know-how.

It’s my pleasure. Thank you very much, and all the best.

If you need further suggestions or have any questions after reading the text, I encourage you to post in the comments under the interview.
Fingers crossed for your language school development!