June 9, 2017
If you want your driving school to be really successful, I recommend that you fine-tune these business basics: Limit your services, simplify your pricing, and effectively manage your payments. These simple driving school tips really do work. I know firsthand because after years of trial and error with my own driving schools, I did this and watched the revenue roll in. You can too!
Driving School tips: Limit Your Services
When I opened my first driving school, I had a completely different mindset than I did after a few years of operating the business. My line of thinking was that the more services I offered, the higher my profits would be. That’s why when I opened my doors for the first time, I offered a total of 7 different services: Drivers education classes, driving lessons, a road test service, DUI classes, defensive driving classes, a learner’s permit course, and a PRIDE course for parents and their kids. That’s a lot!
Fast forward to 2015. My driving schools changed focus to what we did best: Drivers ed, driving lessons and an on-site road test. That’s it! So, how did I drive revenue and increase profits with fewer services?
Think about it. When I offered a full menu of 7 services, I also had to train my staff how to effectively sell them. Plus, all were not profitable. DUI, defensive driving, learner’s permit and Pride courses only brought in about 5% of my total annual revenue. So, why would I continue to offer them?
I didn’t. After sharpening my pencil and crunching the numbers carefully, I came to the realization that my driving schools would be MORE profitable with FEWER services. I learned that offering every service under the sun only distracted my core buyer and complicated my business. So we changed our focus to our cash cows and what we did best.
In-N-Out Burger does this too. This fantastic chain has grown to 300 locations, but it has remained true to its mission of offering a great product to its cult-like following. It sells burgers, fries and shakes – and that’s it. The simplicity of its branding is brilliant.
Driving schools should do this too. Why offer a full menu of services when the majority of your business comes from only 3-4? Focus on your bread and butter and drop the non-revenue producing ones. Then, watch your bottom line grow like crazy!
Driving School tips: Simplify Your Prices
After you limit your services to only those that produce revenue, it’s time to think about your pricing structure. New driving schools tend to offer lower prices than their competition to capture a portion of market share. Others offer a wide variety of a la carte prices that can be confusing to the customer.
Let’s use a restaurant analogy again. Have you ever looked at a menu so expansive that you couldn’t decide what to order? Just like having too many services, too many pricing options can also confuse your customer and complicate your business.
My driving schools offered just three pricing options. A Road Wise $499 package includes the 30-hour class and 6 hours of in-car driving lessons. The $549 Drive Smart package adds an on-site road test. The $699 Road Scholar includes the class, the on-site road test, plus 10 hours of in-car driving lessons. That’s it. Customers were able to quickly decide which package worked best for their needs and budget.
Another big advantage of simplifying your pricing structure is that it also simplifies your website. Statistics show that you have about 0-8 seconds to capture website visitors before they bounce off. Too many price options may become obstacles because customers can’t decide which one is best for them.
Put yourself in your customer’s shoes for a quick moment. If you wanted to purchase Driver’s Ed for your child, would it be easier to choose from options A, B or C or A-Z options? Picking from A, B, or C is much easier, quicker and more likely to lead to a sale. Keep your pricing structure simple and the sales will follow. For even more benefits of online payments, check out this article from Invoicera.
Driving School tips: Manage Your Payments
How do you actually charge your customers for your services?
It’s absolutely crazy to me how many driving schools do not take payments on their websites.
An online payment gateway makes the selling/purchase process faster and hassle-free. If your driving school isn’t taking payments on your website, you’re leaving money on the table. Period.
In general, the online world is all about providing convenience and usefulness to consumers. The process is smooth and transparent and gives customers confidence in your business. It also gives driving schools flexibility to offer last minute deals if classes aren’t full. It’s a win-win for you and your customers.
If your website offers an online payment system, your customers will appreciate the convenience. If you don’t, they will bounce to your competitor’s website that does. It just doesn’t make sense at all not to offer online payments, but I see it time and time again. It’s mind boggling!
Online purchases accounted for about 60% of our driving school’s total sales. It’s even been 80% at times. Not only are you capturing these online sales, but your staff isn’t having to sell your school. Your website is doing all the work! Again, why would you opt to miss out on these easy sales?
A lot of driving schools also do not charge for their services up front. Some collect when the instructor has the first lesson. That’s a dicey way to operate. Originally, our driving school offered payment plans until we recognized the downfall of doing so. If a customer isn’t willing to pay up front, that’s not a customer we wanted to work with. It complicated our business.
One size doesn’t fit all. So, if you do offer payment plans, try to make them as uncomplicated as possible. Set up a system to collect payments so they don’t fall through the cracks. Make sure to collect payment before the first lesson. It’s all too easy for a customer to cancel without a financial stake in the game.
In a perfect world – collect the entire purchase amount up front. When a customer pays up front, they’re serious. If they don’t have to put any money on the table, it’s too easy to back out or go to a competitor.
Driving School tips: In Review
So, that’s it. The road to success is simple. Limit your services to only those that are most profitable and get rid of the rest. Keep your pricing structure lean and mean so it’s easy for your customers to make a purchase. Accept online payments and try to collect the entire amount up front. These driving school tips will improve your bottom line.
Then, watch the profits roll in!
Click here for even more ways to increase profit at your driving school.