Use the 3X Rule to Raise your Rates
What are you willing to do to deserve to charge more?
Read time: 3 minutes
Here’s our TTT for this week on how to grow your online teaching business.
What is TTT? A Tip, Takeaway, and Task. On Thursday.
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Tip: Raising rates isn't arbitrary
We’ve talked to many teachers who said one of the following:
I don’t feel comfortable charging more
I don’t want my students to pay more
I don’t need to make any more money
If those are 100% true of you, you can ignore the rest of this week’s note.
But if you’ve said those things and what you really mean is:
I don’t think people would pay more
I don’t know how to charge more
I don’t think what I do is worth more
Then, this newsletter is for you.
Many teachers secretly want to charge more. And while you shouldn’t be reluctant to raise your rates, just because you want more money doesn’t mean you deserve it.
This is the hard truth: you don’t deserve to charge more just because you exist.
But at the same time, charging more is essential to sustaining a healthy business. Inflation and other factors make this a guarantee.
So, here’s the question for you: what are you willing to do to deserve to charge more?
For starters, we can use data driven decisions to charge more.
Takeaway: Use the 3X rule to raise your rates
As a rule of thumb, if 8 out of 10 students say yes to your rates, you're not charging enough.
We find the 3X rule helpful here:
Every time you get three yes-s in a row, increase your price. Keep doing this until you encounter consistent resistance.
The magic is to combine the 3X rule with your sub-niche. By niching down and charging more, you control the supply and demand equation.
There is limited supply of you (i.e. 1) and increasing demand.
And this helps you and your business take the calculated growth that’s necessary.
If you never raise your rates, your business will die. That’s a fact. On a low level, annual inflation is about 2%. So just to keep up with that, your rates need to increase.
On the other end, the stock market grows by approximately 9% annually. So if your business also grows by 9%, you’ve actually stagnated, not grown.
Your business is actually losing.
Don’t think of your rate as an emotional choice. It’s a data-driven decision.
Task: Apply it to your context
Starting today, have a new rate. And don’t be conservative.
Increase your rate by 30% starting today. Seriously.
The next 3 students who want to work with you, tell them your new rate.
If you get 3 yes-s, raise it again. Keep raising it until people say no.
If you get 8/10 no-s, then it’s too high.
When people start saying “no,” you have two options:
Lower it slightly
Keep the rate but add more value
Use the 3X rule to find the sweet spot.
See you next week.
When you’re ready, here are 3 ways we can help you:
1. Our free Business Foundations Training for Teachers (260 teachers)
2. TBLT Made Easy - use tasks in your class right away (116 teachers)
3. A free consultation with us to talk about taking your business and teaching to the next level (first come first served)
