How to Talk to Parents About Raising Your Rates
Taking about raising your rates is one of the most difficult conversations family child care providers can have with their day care parents.During economic hard times it becomes more difficult to bring this up.
But even in good times most child care providers don't raise their rates on a regular basis. Many never raise their rates.
As a general rule, I believe your rates should reflect the quality of care you offer. If you are among the top 20% of quality caregivers (homes and centers) in your area, your rates should be in the top 20% as well.
I am not recommending that all child care providers raise their rates. Some prefer to keep their rates stable to serve low-income families. This is admirable.
If you do want to raise your rates, here are some suggestions for how to talk to parents about it:
* Notify parents at least one-two months in advance. It shouldn't be a surprise.
* Don't raise your rates in April (when tax bills are due) or December (when holiday expenses can be a burden).
* September is generally a good time to raise rates, because this is often when children begin school and you may need to fill an opening.
* You can raise your rates for new families only and keep rates steady for current families. This is not illegal discrimination.
* You may not want to raise everyone's rates at the same time. If you do, you run the risk of losing more than one parent at the same time. Stagger rate increases so only one family at a time is affected. You can pick the parents' anniversary date. Other child care providers regularly rates for everyone in January or September. There is no right or wrong about this issue.
* Don't try to overjustify your rate increase. No matter what you say, some parent may not agree with your reasoning. Just announce your new rates in writing. If parents ask for an explanation, consider telling them:
"My costs have gone up (such as utilties, property tax, food)."
"It is a cost-of-living raise."
"I have another year of experience in providing care, and I've applied this knowledge to help your child learn more."
"I have introduced a new benefit into my program (such as a computer, extra field trips, new curriculum)."
"I will be providing better care for your child this coming year because ____________ (fill in your explanation)."
* Don't argue with parents who say your rates are too high. They may be too high for the particular parent you are talking to.
* Your best way of communicating about your rates is to talk about the value of your service rather than the price. The cost of providing quality child care is expensive. Parents can always find cheaper care somewhere else. Point out how your program benefits their child and mention that your rate takes these benefits into account. Parents will pay more if they can see the value of your benefits and the quality of your service.
* Instead of raising rates, charge annual fees for business liability insurance, attendance at family child care conferences, NAFCC accreditation fees, or other special expenses.
Although you may be reluctant to talk to parents about raising your rates, remember that parents stay enrolled in your program because they believe you are doing a good job helping their children. Also, parents are not going to say to you, "Isn't it about time you raised your rates?"
How have you handled it when you did raise your rates?
Portions of this article were taken from the new, second edition of my book Family Child Care Marketing Guide. Publised with the permision of Tom Copeland.
