Would you ever lower your rates to accomodate a child and family you really liked?

[Dayhome Mamma]

So I had two interviews this weekend for a space, One was for part time, one was for full time, and of course I fell in love with one of the little boys. I wasn't planning on necessarily taking on another full time, but me and the mom talked for about half an hour on the phone and I really liked her so i had her come in.
they came, she loved us and the space, but she was a bit hesitant about the pricing because she has a second son who she'll be paying for as well in daycare. She didn't make me feel like it was too much at all, she said it totally made sense but it was more about how she could fit both into her budget. (she would be responsible for paying $2400 per month if you consider both childcare fees combined, her other son is going to daycare)
And I am expensive. I just raised my prices from $960 to $1200 last month because I wanted to see if I could. So I know that not everybody is going to be able to be my client. The way I've positioned myself, and the way I thought about it is is that I'm cheaper than a nanny, whose basic fees starts at $9.66/hr here, (we are $6.32), and a bit more expensive than a daycare because we are limited to the amount of spaces we can provide (about $50-$70 more per week). So I feel like I am still being fair, as I have two assistants, we work really hard, and I put a lot of money out to make it as good as I can.
Having said that, I have previous families who are still paying $960, because that's what we had agreed on before they started this year (some I had contracts with since september and november, but they didn't actually start child care till jan. and march of this year) So I can't raise their prices right away. And when I will, it will probably have to be a small amount at a time cause I don't want to scare everyone away, like $40 starting this september or January? (feel free to give feedback on this as well as I'm not sure how to go about that either, and I'm curious how often you raise your prices as well, by how much, and how you go about doing it).

So with this lady, I've considered offering her the space at a lower rate, like $1100, or even $1000, because I really think that it'd be great to have her son here and its way more important to me to have a great fit than the $200 extra dollars. yet a part of me thinks it might not be a good idea as well. It might devalue the service of care? What are you thoughts? What would you do?

[dodge__driver11]

Dayhome Mamma,


I may be a bit Jaded in this area, but let me tell you that lowering your fees for a family you love never works..... I fell in love with "Saturday Mom's" daughter and look where I am ....

If you do do it consessions are a def no no and do not change your rules for her in any way. For example she may feel that because she is paying less she doesn't need to pay for stats/civic holidays or whatever....

But in my exp lowered fees tend to lead to resentment, because you are providing the same quality of care for everyone because your reputation matters, and you love the kids all the same.

[playfelt]

The fact that you are just considering raising your fees might be reason to reconsider the timing. IF the mom needs care starting now what you could say is that you were initially thinking of a family starting this summer and the new rate. The fact she wants to start now you will consider meeting half way - between your old rate and your new rate. I would have figured out what you plan to do about increasing fees before you talk to her though. I have a policy of not raising rates for families currently in care but raise them for new families starting care. So the rate you start at is the rate you stay at provided you stay with me full time. Any changes or leave and come back and you are subject to rates in effect at that time.

I understand how you arrived at your rate but is it in keeping with other daycare homes in your area. That would be my concern in that if the rate is too high then you may have trouble attracting clients. Then if down the road you realized and reduced the rate a bit it would be a shame to have lost out on a family now willing to pay the slightly lower rate now.

[Momof4]

Wow, that's a lot of money to pay for daycare! $2,400 a month is almost my whole income! But I charge $150/week so $600 per month usually when there are 4 weeks for one child. I know Calgary is a more expensive city to live though and I understand. I would not reduce my rates for siblings but then I am at the low end of the scale.

You do what is right for your peace of mind and business sense and knowing what people pay in your city and don't feel guilty for running your business. The two previous posters made great points about not letting any other parts of the contract slide if you do allow a break in the price for this one family and making sure you don't have rates too high that you don't lose clients.

[Sarah]

I had a visit from a family that I felt in love with. The parents were great, the kids were great, and I wanted them. I gave them a rebate. They are, so far, the best clients ever! They are respectfull, always paying on time, telling me how they like me, etc..... They are never trying to take advantage of me just because I was nice anough to give them a rebate!

But are they all like that? Probably not! But I would give her a rebate and you can make things really clear that it is a rebate but the rest of the contract stays the same (sick days, etc...)

[playfelt]

Is she looking to be a long term family or is she waiting to get her youngest into the same daycare centre her older child is in?

The answer gives you two options. If she is going to be more short term then giving her your old rate now means it will only be a few months before you would be replacing her and could give your higher rate to the new client at that time.

The second option is to insist on the higher amount because she is going to be short term and it helps bank extra money since you will need to interview sooner than expected.

Either way I would be careful about the longevity of the family. You mentioned you interviewed two families. You didn't say if the other family was willing to pay your new rate or not. But before making any decision I would be asking both families more questions about their plans for the future and their expectations of you.

[Dayhome Mamma]

I have my prices listed in the ads right from the start, so families are usually aware of what I am charging before they contact me. I haven't had a problem filling the spots yet though it does take people longer to respond because not everyone can afford it. This would actually be my absolute last spot and I had 3 people interested in it. The part time family is a mom who works shift work though so she wants all different days each week which I'm not too crazy about, but they are willing to pay the price. I did notice that it takes more viewers to go through the ads, but there is always someone wanting and willing to pay for the best for their child.
And the $2400 wouldn't be all for me with the lady that I liked. She has two kids so she would be paying $1200 for one at another daycare, for about a year cause he is 4. Then he would be off to kindergarden I would think. She is looking for long term as she had mentioned that she would like to keep her child attending until they outgrew the dayhome like her older son. (His dayhome lady is the one opening up the new daycare that he would be going to but she is not taking anyone under 2 yrs old and our prices are the same so she would probably keep him here with us to prevent the hassle and stress on her child of going to a new place)

[Dayhome Mamma]

The fact that you are just considering raising your fees might be reason to reconsider the timing. IF the mom needs care starting now what you could say is that you were initially thinking of a family starting this summer and the new rate. The fact she wants to start now you will consider meeting half way - between your old rate and your new rate. I would have figured out what you plan to do about increasing fees before you talk to her though. I have a policy of not raising rates for families currently in care but raise them for new families starting care. So the rate you start at is the rate you stay at provided you stay with me full time. Any changes or leave and come back and you are subject to rates in effect at that time.

I understand how you arrived at your rate but is it in keeping with other daycare homes in your area. That would be my concern in that if the rate is too high then you may have trouble attracting clients. Then if down the road you realized and reduced the rate a bit it would be a shame to have lost out on a family now willing to pay the slightly lower rate now.

Thanks playfelt, you raise some good points. I'm not sure what the other rates are in our neighbourhood but they are probably lower for sure. They're probably more in the $800 range.
Up to this point I have always charged families the rate that we had agreed upon from the start and only raise for when I take on/start new clients. The increase to $1200 came about after I had talked to a couple of friends who let me know what they were paying for their nannies, and who suggested that my prices were too low for what I had going (they actually said $1260) So it started out as a test to see what kind of response I was going to get, cause I wasn't desperate to fill any more spots but did have one available, and based on that response I saw that there were quite a bit of people still interested. I have already signed up one client for May, and the 2nd ones are both wanting to start in June. I think it does depend on your city and location within it for sure. As well as your house, how much space you have, what the play and sleep areas look like, how organized and professional you appear, how much experience you've had, your references, the toys/activities you make available, and whether or not you have extra people working with you. We are definitely catering to the more upscale group of families now. Most of my clients seem to be engineers or managers or successful sales individuals just wanting the best. And we really try to have and do the best for the kids. A portion of the money each month always goes back into the daycare for new toys, supplies, improvements to their spaces, etc. And people really see that.

[Inspired by Reggio]

Yup - I agree with Playfelt - I reevaluated and lowered my rates when I first started based on what the market could bare considering that in my area there are a large % of $20 a day providers who work under the table while getting spousal support or social assistance and do not want to claim their income and affect that.

So for me there was a gap between what I felt I was WORTH based on years of experience, training and program and what clients were willing to pay for care in comparison in my area of town .... I had my ad up for two months at the same fee that AGENCIES charges because I felt that I was offering the BETTER service than that so was worth it ... however I lowered them to the 'middle' range for my city which is the high end for my area within that - and than have spent the last several years adding indirect financial perks to my contract instead.

That said if there was demand and my market could bare my rates and it was just 'one client' who was concerned about the fee - NO I would not lower my fees for an individual client ... because that leads to issues down the road when you are foregoing income for someone and than you see them spending $ they claimed they did not have on things YOU feel should not be a priority over childcare ... so for example if she says she cannot afford your fee and does not know how she is going to 'balance' her budget and you lower it and than later they book a $$$$ family vacation somewhere, upgrade their car, do a renovation on their house and so forth or even those LITTLE things like going for a mani pedi or having a latte in hand every morning and so forth .... which are all 'family expenses' for sure when we budget however when they have a higher priority over CHILDCARE and you opted to go without income so now YOU cannot afford those little 'extras' .... resentment cannot help but sneak in even in the most giving person!

[michellesmunchkins]

Yup - I agree with Playfelt - I reevaluated and lowered my rates when I first started based on what the market could bare considering that in my area there are a large % of $20 a day providers who work under the table while getting spousal support or social assistance and do not want to claim their income and affect that.

So for me there was a gap between what I felt I was WORTH based on years of experience, training and program and what clients were willing to pay for care in comparison in my area of town .... I had my ad up for two months at the same fee that AGENCIES charges because I felt that I was offering the BETTER service than that so was worth it ... however I lowered them to the 'middle' range for my city which is the high end for my area within that - and than have spent the last several years adding indirect financial perks to my contract instead.

That said if there was demand and my market could bare my rates and it was just 'one client' who was concerned about the fee - NO I would not lower my fees for an individual client ... because that leads to issues down the road when you are foregoing income for someone and than you see them spending $ they claimed they did not have on things YOU feel should not be a priority over childcare ... so for example if she says she cannot afford your fee and does not know how she is going to 'balance' her budget and you lower it and than later they book a $$$$ family vacation somewhere, upgrade their car, do a renovation on their house and so forth or even those LITTLE things like going for a mani pedi or having a latte in hand every morning and so forth .... which are all 'family expenses' for sure when we budget however when they have a higher priority over CHILDCARE and you opted to go without income so now YOU cannot afford those little 'extras' .... resentment cannot help but sneak in even in the most giving person!

Agree with everything Reggio said. I too, am in an area where there are quite a few $20/day providers. Not saying they aren't just as good as I am, but not sure how they make ends meet charging that. I spend half that in food a day just for each child!

I will NEVER lower my rates as I feel that I set them for what I needed to be financially ok. I have had families ask me to accept $____ amount instead and told them no. This same family was sitting in my house all dressed out in LULU Lemon clothes, texting on their iphones with her nails and toes all done up perfectly! So, nope not a chance I'd lower since really they are just bartering. If you can afford those clothes to wear just to a daycare interview you can afford my full fees (which are pretty much standard)

I did offer a family rate ONCE. A single mom with twins. It was a huge loss of income for me and when she kept talking about her brand new house, her new furniture, her new appliances and the $70 dress she bought her daughter just for a photoshoot I knew I had been played but it was too late to increase fees at that time.

I think you should set your fees for what you need, what the market is like in your area and the clients you want to attract. If you agree to lower your fees, you set the bar to keep giving in to their other demands and things they want changed.