How much is an average guitar student worth?
Many guitar teachers are surprised when I ask this question replying with comments like “I never really thought about it” or the classic answer “It depends on the student”. This is perhaps the most important question a teacher should ask for two very good reasons.
Reason 1. The numbers don’t lie. A student who stays 3 months may be worth around $300. Compare that to a student who sticks around for 5 years who is worth $6000+. Students who leave early are usually sending you a message that they don’t value your lessons enough to justify the expense. Tracking the numbers will allow you to spot problems and patterns so you can make necessary changes. I should point out that this is not the only measure of a successful teacher and you should be careful not to jump to conclusions based purely on the value of your students especially in the early stages. For example 1 in 5 of your students might stay 5 years but the other 4 drop out after the intro. Another teacher might keep 4 out of 5 students for one year. Your 1 in 5 is actually more valuable.
Reason 2. You will know how much to spend on marketing. Calculating the dollar value of each student and then working out the average is known as the customer lifetime value or CLV. The longer you are in business the more accurate this number will be provided you are tracking the actual spend of each student. For example if you tracked 100 students and the total revenue collected was $200,000 you would know your average student CLV is worth $2000. You then have an idea what to spend on marketing.
The reality is most guitar teachers spend very little on marketing in both time and money yet if you are a good teacher you are missing out on getting a huge return. Knowing that your average student could be worth thousands of dollars should motivate you to invest more into your marketing budget. It will come back to you usually many times over.
The business of teaching guitar
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