Effectively communicating price increases to parents
Carole's Top Tips...
It’s that time of year again… Nurseries are finding out their new funding rates and it comes as no surprise that yet again many are left out of pocket.
The significant shortfall between the funding rates and the rising costs of quality childcare provision is making it particularly difficult for Nurseries and Childcare Providers to remain sustainable. With wage bills set to rise again in April, there is little choice but to increase fees for parents.
Increasing fees puts nurseries in a difficult position, but one that they can’t easily avoid. The process can be painful for both parties, particularly as parents have a lack of understanding around the issues faced by the sector.
Carole Feehan, our Customer Relationship Manager, has worked in the Early Years Sector for 26 years. She has been employed by a number of large group providers and owned her own nursery for over 12 years.
Drawing on her extensive experience, Carole has pulled together her tips to help you effectively communicate fee increased to your parents.
Make sure you’re sending clear information to parents. You’ll always receive questions from parents, but the clearer the information they receive is, the less likely they are to be confused.
Don’t hide price changes, you should send formal letters to inform your parents of the fee increase.
Tell them in advance so that they have enough time to get their head around their new prices, this way they will be less likely to make emotional decisions. You should give your parents at least a month’s notice. A month should give them time to update their payment methods (for anybody who pays by standing order) and should give you the chance to address any issues or concerns.
Writing the letter...
It’s never easy to approach these things, and if you’re struggling, think about using the ‘compliment sandwich’ technique for your letter.
- Focus on the Positive. Show what you’re giving in return for their money.
- Hit them with the fee increase.
- Thank your parents for choosing you to care for their child and offer them the opportunity to discuss.
Focus on the Positive. Show what you’re giving in return.
Focus the parents’ attention on the increased value of your childcare. Remind them of the importance of your cooperation; show the benefits of your company, tasks you’ve already accomplished and plans for any relevant upcoming investment that the parents will feel is a benefit for them and their child (and the staff team that look after them).
Some things you could mention are things like:
- Current Ofsted Rating
- Awards you have won (Nursery World, NMT, NDNA etc)
- Increase in staff resource
- It’s important to mention the 6.5% Minimum & Living Wage increases. Sharing figures like this helps parents to quantify the value of care at your setting.
- Staff Knowledge/CPD – raising the quality of the care offered
- More equipment or resources
- Improved technology to make staff more efficient so that they can spend more time in their care
- SEND equipment
- Quality of meals and Kitchen Hygiene Ratings
Hit them with the fees
- Mention when fees were last increased (if deemed appropriate).
- Calculate each individual’s fees for them so they know exactly what to expect, including grants and extra charges and show how you worked it out.
- Give them the exact date that the fees will be increasing.
- Tell them how you are charging against the local competition (if it’s beneficial) take into consideration add-ons, like paying for nappies and food
- Include evidence of the current funding crisis, you could even link this to a piece from the media about rising costs in childcare and the increase of settings closing.
- Share any special offers that you might have, like sibling discounts, or reduced rates for undersubscribed sessions.
Thank your parents for choosing you to care for their child
Parents are just as much a part of your business as your staff and children. Thanking them will give them a positive impression of your communication style, making them less likely to kick up a fuss.
Give your parents the opportunity to discuss
For many parents, it’s important to communicate personally with your company staff. So, now that you’ve clearly explained the price increase to your parents (and well in advance) you should offer your parents the chance to discuss this with you if they wish.
Clarify exactly which staff members can be contacted to discuss pricing and how they should be contacted.
Transparency shows your loyalty to your parents. You have nothing to hide!
Sending letters can be time-consuming
Did you know that you can send emails on bulk to all of your parents using Connect Childcare?
One thing I found really useful in my settings was the introduction of a parent community or committee. I would create a parent community in each setting, where 1 parent from each age group attended a short meeting after hours every quarter. We arranged for 2 staff members to look after their children in the nursery to make it easy for the parent to attend, and we’d get their opinions on different topics and agree on our actions.
We had a parent committee notice board in reception where our outcomes would be summarised for all parents to see and were able to write suggestions. Often they would communicate with other parents regarding issues and theses would be addressed at the meeting or earlier if urgent.
This gave the shy parent a chance to raise a matter anonymously if they need.
Once the fee increase was agreed, I would let the Community parents know first and they often smoothed the way for us when the letters went out, explaining the things we were improving on – often at their request.
Be Confident in your Decisions
It’s important to remember that although some decisions can be difficult – they are important to the health of your business.