Is There a Time When You Should Lower Your Rates?
By Tom Copeland. Posted with permission.
You've tried a variety of things to fill these openings, but without success.
You conclude that perhaps the reason you aren't having success is because your rates are too high, and so you are considering lowering your rates to attract parents.
Is lowering your rates a good idea?
The short answer: probably not.
Parents looking for child care have a lot of programs to choose from: licensed/regulated family child care, illegal child care, kith and kin, child care centers, Head Start, school age care, etc.
There is an extremely wide range in the cost of care among these programs. This is also true among licensed family child care.
It's a bad idea to compete based on the cost of your care because there is always going to be someone charging less than you. You don't want to promote yourself as "the cheapest care in town."
Compete on Quality, Not Price
Instead of lowering your rates, you might consider offering a short-term discount to attract new families:
"$30 off the first week of care if you enroll by the end of this month."
"No registration fee for new families this month."
"Free night of evening care for a parents' night out for all new enrollees."
In the long run, however, you should be competing based on the quality of care your program offers parents.
Parents will pay more for child care if they can see the quality/value of your services. You need to be communicating the benefits of your program, so parents can see what they are paying for.
In my opinion, the problem with rates in family child care is that too many providers aren't clearly communicating their benefits to parents.
Here are some examples of what to say to parents:
"I am an experienced preschool teacher who offers a child-center curriculum with planned learning activities and weekly themes."
"I offer informal care that allows your child to explore and be creative. My loving approach will help your child learn and be ready for school."
"I provide an enrichment program that will expose your child to other cultures."
In the end, the price of your services should be directly related to the quality of your care. If you offer average quality care, your fee should be an average fee.
But, if you offer high quality care, your rates should reflect this!
Under what circumstances should you even consider lowering your rates?
Maybe if you are cutting your hours. Or maybe if your rates are currently in the top 10% of rates in your area and you have had a number of families turn you down or leave your program because of your rates.
But, I believe your rates are about right if occasionally a parent leaves your program because of your rates.
Note: If your mission is to service low-income families then it is logical to keep your rates low.
Image credit: bestsalestalent.com
See my book Family Child Care Marketing Guide.
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