| T O P I C R E V I E W |
| elitecagefighting |
Posted - 01/18/2006 : 10:17:58 AM
Why should you use a billing company?
Joe Galea
About half of all martial arts schools in the United States use billing companies. With this fact in mind, the question, “Should you use a billing company ?” may cause a heated debate among school owners. It’s a question with which many undecided martial arts business owners grapple, especially when their students pay late or not at all. In a perfect world students would attend all classes and pay on time. But tuition billing is as far from perfect as your white belt’s first side kick. A good billing company can give you a significant edge in revenue, organization, and retention which can increase your longevity and prosperity in an increasingly competitive industry. So my answer is simply, “Yes. school owners should definitely utilize a billing service for their school.” And here’s why…
You’re a Teacher, Not a Bill Collector
Martial artists become school owners to teach martial arts, not to become experts in tuition management. “I want to be an instructor and a mentor to my students, not a bill collector,” says Mike Pace of the Pace Institute of Karate. He continues, “it takes more time, effort, expense and mental attention than most realize to do an effective job at tuition billing.” Smart owners understand the need to delegate their weaknesses to accentuate their strengths. Julie Noyas of Self-Defense America concurs. “School owners are not professionals [at] tuition collections...while I am quite adept at licking a stamp, affixing it to an envelope, and addressing it to a past due client—I need more weapons in my arsenal which a billing company provides.” Most school owners don’t have the time or experience to provide expert billing to their students. Many schools lose students because of breakdowns in their own billing systems.
Student Retention
For every student you lose you need two new students to grow. Therefore it’s essential to develop retention strategies within your school. Next to quality instruction, a solid billing management system is vital to strong retention and long-term success.
Most self billing systems are “pay as you go” which requires no student commitment, negatively impacting retention. Billing companies provide membership strategies (not necessarily long term “contracts”) that increase retention. Billing companies enforce policies that school owners want but feel awkward voicing because of developed teacher-student relationships. Billing companies “put a buffer between you and the money when dealing with the students,” says Chris Dewey of Starkville Martial Arts.
When students of self-billing schools miss class they can fall behind in their tuition, leading to more absences and eventually attrition. This domino effect is more prevalent in these schools because attendance is directly associated with how tuition is paid. With a billing company, tuition is handled separately from attendance. Students who miss class have the same responsibility as those who attend to pay a “scheduled payment.” Billing companies create motivation for students to quickly return to class.
Be a Martial Arts Professional
“How impressed are students when they see classes are starting late because you are collecting money from parents?” asks Raffi Derderian, Jr. of Modern Fighting Systems. Even when there are staff members to collect tuition, people dumping cash and checks on your desk detract from your professional appearance. You’ve heard that if “you’re a jack of all trades you’re a master of none.” It’s hard to be a Martial Arts Professional when you’re wearing a dozen hats. A billing company “makes us look better” says Pete Hatcher of American Karate. Billing companies provide flexible payment options such as EFT, credit card, coupon books and statements, which students prefer and give your tuition the same priority as other scheduled monthly expenses. A billing company not only collects and processes payments but also provides comprehensive reporting that eliminates piles of paperwork and hours of additional labor. Billing companies “help you stay focused and on task,” according to Mark McCumber of White Dragon Karate.
The Bottom Line...Cost
Nothing is more expensive than replacing lost students. A good billing company will increase student retention, saving you money. “Having a billing company increases your staff without additional cost to the school,” says James Parker of Parker’s Self Defense Studio. Calculate the “true cost” of doing it yourself, and you’ll see that billing companies provide cost effective tuition management. As Mike Pace states, “I believe in following successful business models. All of the most successful schools in the country and internationally use a tuition billing company. There must be a good reason.”
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| 14 L A T E S T R E P L I E S (Newest First) |
| elitecagefighting |
Posted - 02/01/2007 : 12:11:19 AM
I gave them a notice that it would be changing over in 90 days. We did not lose one student over this. I think it was because many of them have seen how hard we worked to make things happen and they knew they would also benefit from the added cash flow to the school. This was the single change that enabled us to get our own gym.
I also explain that when you go play football, basketball, hockey or any other sport, you sign up for the entire season, not by the month.
I hope it helps. I know Marco Hernandez went to this a while back. You might ask him if it helped or hurt.
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| watchdog |
Posted - 02/01/2007 : 12:01:05 AM
quote:
Originally posted by elitecagefighting
I used to think the same thing, and the same way WD,,,, and for years never got over 10 at a time. I was up to 30 in less than 8 months after starting 1 year commitments though.
Gary,
Did you begin by converting all your existing students to the yearly contract or did you start with just the new students? If the former, how did you convince them that going to the one year contract was better? |
| elitecagefighting |
Posted - 01/31/2007 : 02:15:13 AM
I used to think the same thing, and the same way WD,,,, and for years never got over 10 at a time. I was up to 30 in less than 8 months after starting 1 year commitments though. |
| watchdog |
Posted - 01/31/2007 : 01:26:45 AM
I currently have one student who pays for an entire year in advance. Everyone else is on month-to-month billing. I find that, in my area (Southern California), it's difficult to get people to commit to anything long-term. It's hard enough to persuade people to sign up even for a month-to-month situation. I think much of it has to do with the more transient nature of people in this area, as well as the many choices of activities, including other martial art schools, that people have. |
| Widow Maker |
Posted - 01/24/2007 : 08:30:57 AM
I think yearly contracts would be a must. It weeds out the people that dont really want to be serious about it. And its the only way to go from a business perspective. |
| elitecagefighting |
Posted - 01/24/2007 : 12:37:21 AM
quote:
Originally posted by watchdog
Did you run into any objections from prospective students when you told them they had to sign up for a one year contract? If so, how did you address these objections?
No, but if you do, they probably weren't that serious in the first place. Not to mention, if you do occasionaly get these people, it is better to lose them now and retain everyone else for a year, rather than lose both so easily.
I tell people it is no different than hockey, football, or baseball. You don't just sign up for a half season in anything.
I stand by the yearly contracts. It has done nothing but help our gym. |
| watchdog |
Posted - 01/23/2007 : 11:59:46 PM
quote:
Originally posted by elitecagefighting
One year contracts were the way to go. This has helped out the gym more than anything else we've ever done.
Did you run into any objections from prospective students when you told them they had to sign up for a one year contract? If so, how did you address these objections? |
| elitecagefighting |
Posted - 12/13/2006 : 1:54:52 PM
One year contracts were the way to go. This has helped out the gym more than anything else we've ever done. |
| elitecagefighting |
Posted - 01/24/2006 : 07:08:12 AM
I generally use a 90 day notice, but I am adding 1 year contracts now. |
| Matt W |
Posted - 01/24/2006 : 12:41:39 AM
Do you use contracts or are your terms flexible? I see the PPS has a multitude of options. |
| elitecagefighting |
Posted - 01/23/2006 : 07:53:44 AM
Our enrollment has went up and our retention is like never before.
One of the best decisions I've made. It works well even if you have as little as 3 students.
I use www.PPSBilling.com |
| Matt W |
Posted - 01/23/2006 : 03:34:13 AM
How's that work for you? What sort of enrollment qty do you have? I'm curious how that would work with smaller groups/schools.... |
| elitecagefighting |
Posted - 01/22/2006 : 10:44:51 PM
Yes. I have for a couple years now. |
| JamesD |
Posted - 01/21/2006 : 7:35:52 PM
do you use a billing company? |
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