“If you can’t explain it to a six year old, you don’t understand it yourself.” ~Albert Einstein
Be Careful Who You Listen To
As a new company, you will do anything to get even a single sale. Don’t let that temptation degrade your company.
I started Abamath with the idea that people wanted something better from tutoring. I believed there was more value in tutoring as a gym-style membership. One price, unlimited tutoring. Students can come in whenever they want help, not pre-scheduled times whether they need help or not. What’s not to love?
People had never seen gym-style membership tutoring before. They kept insisting that they wanted an hourly rate like other centers. So finally, I caved. I offered hourly options. How many new customers did that net me? Zero.
Nobody actually wanted that option, they felt entitled to it. The people who suggested it weren’t potential customers, just people who thought that is how a tutoring business should be run.
We offered private tutoring for $49/hour and membership for $199/month. Just having these two products caused a lot of confusion. Did that mean $199/month and then $49/hour on top of that?
Help Customers See Your Value
If you’re still experimenting with price (and who isn’t), here is a fun experiment to run.
When someone tells you to offer something you don’t, ask them, “If we did offer that, would you buy it today?” It’s a simple test to tell the difference between serious customers and those with no intention of buying.
Unless they’re using that option with a competitor or would consider buying it today, they probably aren’t going to pay you for it. Cluttering your communication with confusing pricing destroys the clarity of your key message: your value.
After 3 months of messing with it, I was done. We took the hourly tutoring option off the brochure. When potential customers are considering our service, we offer our one-week free trial membership to see if an Abamath membership is what they want. It always is.
Keep it simple. It’s not easy when you feel potential customers are slipping through your fingers, but you need to trust your value proposition.
Simple and easy aren’t synonyms in business, but complex and difficult definitely are.
Luke Schlangen is the founder and president of Abamath: A Better Approach to Math