Sliding Scale Pricing, by the Numbers

The following post was originally published on the Valkyrie Western Martial Arts Assembly blog on July 30, 2019.

When we tell other martial arts instructors and school owners that we offer sliding scale pricing for events at Valkyrie, one of the most common responses that we get is: “But don’t you lose a lot of money on that?”

On the one hand, making money isn’t really the primary goal of offering these kinds of discounts. Rather, we’re concerned with making training accessible to as many students as possible, and especially with opening up our workshops to members of marginalized communities that don’t have many options for high-quality martial arts training, and who are a lot more likely to struggle to pay event fees. On the other hand, most martial arts schools aren’t huge money-making entities, but small businesses that can struggle to get by in expensive cities like Vancouver, and the fear of losing money can stop initiatives like this from ever getting off the ground. If having a frank conversation about the numbers can help dissipate some of that fear and encourage more folks to offer financially accessible options, it’s worth doing.

We’ve long had the intuition that we weren’t actually losing any money on our sliding scale fees. Now that we’ve applied this model to over a dozen workshops, we’ve also got enough data to start drawing preliminary conclusions. In brief, the numbers back up that gut feeling: sliding scale fees have not reduced our workshop income, and have actually increased it overall. Here’s the more detailed breakdown:

We have offered sliding scale rates on every workshop at Valkyrie WMAA since the start of November 2018. We’ve run a total of 14 paid events in that interval, ranging from 2 hours to 8 hours in length, with anywhere from 3 to 18 attendees. Attendees were able to choose from 3 different fee tiers:

  • an accessible rate that is 50% – 66% of the standard rate ($15-$50, depending on the length of the event)
  • a standard rate ($30-$80)
  • a generous rate that is 133% to 150% of the standard rate ($45-$110)

When we’re pricing a workshop, we base our break-even point and cost estimates on the standard rate. The standard rate is also equivalent to what we previously charged for workshops of the same length. The accessible rate and generous rate are designed to balance each other out (e.g. if one student pays the accessible rate, and another pays the generous rate, then the average income will work out to the equivalent of them both paying the standard rate).

The 14 workshops surveyed had a total of 116 attendees, of which 29 paid the accessible rate (25%), 46 paid the standard rate (40%), and 41 paid the generous rate (35%). The following table shows the breakdown per event:

In the majority of cases (10 of 14), the number of attendees paying the generous rate matched or exceeded the number of attendees paying the accessible rate. Across those 10 events, our average rate paid was equal to 110.57% of the standard rate. Yay!

In the 4 cases where the number of attendees paying the accessible rate was high enough that it wasn’t completely balanced out by attendees paying the generous rate, we still had an average rate of 88.75% of standard. It’s worth looking a little closer at those 4 events to see if they have any shared characteristics that might shed light on these numbers.

One event (“Coached Sparring”) is a pretty clear outlier. It had a total attendance of 2 students, and we need a minimum of 3 for the sliding rates to be able to balance out. These things happen.

Of the others, 2 directly and explicitly targeted attendees from a marginalized group (“Big Gay Sword Day” and “Queer Knife Fighting 2”). Having more students than usual choose the accessible rate is expected for events like that, and fits with our goal of using sliding scale pricing to make training available to students from the LGBTQ community who otherwise wouldn’t be able to attend. The potential loss of income to students choosing the lowest fee is balanced by the fact that attendance is higher than it otherwise would be.

The final event we’re considering here (“Tomahawk”) also included a large proportion of low-income and marginalized attendees (of the 5 students who paid the accessible rate, 4 had previously approached us for financial assistance or discussed financial limitations with us, and those 4 were also members of the LGBTQ community). Even though it wasn’t explicitly aimed at queer and trans students, it ended up attracting a comparable audience to our LGBTQ-centric events, and having a similar fee profile.

Looking closely at these workshops shows us that the sliding scale system is working as intended in terms of providing access to training for low-income students, and that the costs of doing so are mitigated by an increase in participation rates. A workshop with 13 attendees paying an average of 88.5% of the standard rate is still going to bring in substantially more income than a workshop with 9 attendees who pay 100% of the standard rate (if we take the actual average rate paid for the “Tomahawk” workshop, and then assume that the 4 low-income students discussed above would not have attended if only the standard rate had been available).

Even if we just look at fees paid and don’t make any assumptions about what attendance rates would or wouldn’t be without the sliding scale option (which isn’t something that we can really A/B test because of all of the other factors that affect attendance, including timing, relative size/public profile of the school, event topic/instructor, etc), we’re still coming out ahead. The average rate paid across all workshops was 103.85% of the standard rate.

The biggest factor in allowing us to maintain our income while offering a substantial discount via the accessible rate is the large number of students who are willing to pay the generous rate. So what do we know about them?

First of all, we know that they’re usually already a part of Valkyrie WMAA’s community. The majority of students paying the generous rate are returning students (16 of 24, or 67%), with more than half of those (9 of 16, or 56%) being regular Valkyrie students who attend classes at least once per week. We also know that a decent number of those regulars attend multiple workshops a year, and habitually pay the generous rate. Four Valkyrie regulars are responsible for 40% of all generous rate payments during the period studied.

The 8 attendees paying the generous rate who weren’t already Valkyrie students fit into one of two groups: people who had previously trained with the featured guest instructor, or had been wanting to train with them for some time; and people who were friends of other attendees paying the accessible rate. In other words, they were people who had emotional ties to other workshop participants, and an interest in supporting them.

All of this strongly suggests that the biggest factor in getting students to pay the generous rate is emotional investment in the community. Whether they care most about the organization hosting the event, the instructor teaching at it, or one or more of their fellow attendees, they want to support others. It’s worth noting that we put a ton of work into community-building prior to launching the sliding scale model. By the time we introduced the new fee structure, we had a strong in-person and online base of students and supporters who believe in Valkyrie’s mission, share its ethics, and are already in the habit of supporting each other. Our events that extended past our existing circle of support, such as Big Gay Sword Day and Queer Knife Fighting, have tapped into existing communities with a similar ethos.

Introducing sliding scale rates has paid off substantially for our school. It’s allowed us to expand our reach to attract students who otherwise wouldn’t be able to participate in our programming; has helped us meet our internal mandate of making martial arts more accessible to women, queer, and trans people; and it’s increased our income from workshops. We had to do the work of building a close-knit, engaged community first, but that too has enormous benefits.

If you’ve been on the fence about offering sliding scale fees in your own organization, hopefully the data we’ve shared here will help you make the decision to offer more financially accessible options. We certainly won’t be going back to our old way of doing things.

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