By Peter Driessel, PADI Regional Manager

A concern that is often expressed by dive centres and independent instructors is that of low course prices.

Many centres say that they have to set their price at a sum because their opposition have set a different total which is often lower. If potential customers are shopping around, they will go for the cheaper option, which is a statement that I agree with. However; do you know why your course needs to be more expensive, and what differentiates your offering from your competitor’s? In the eyes of your customers they are getting the same certification.

Maybe your gear is state of the art, new and regularly maintained. Perhaps you pay your staff to go for their annual medical examinations? Your dive centre may be warm and inviting with a good selection of diving equipment, books and accessories. Your classroom may have comfortable seating with tables and all of the appropriate training aids and videos with state of the art presentation equipment. You would therefore need a higher return than your competitor who just does not care about their image.

By letting your competitor set your course price, you may be losing money without realising it. I would recommend that you do a full pricing workshop before you decide how much you want to charge for a course. Simply ask your Regional Manager or local PADI office as the tools are available to help.

Now, many will argue that if you charge a higher price, your competition will gain all of your business; people like to shop around before committing to parting with their hard earned money. You have probably called around yourself for the best price when purchasing new items. To make your clients’ experience memorable and enjoyable, you need to charge the appropriate fee, and this could mean a course price that is higher than your competitor is charging.

You are probably asking yourself, ‘Am I going to lose business if I do this?’ My answer is that you are going to lose money if you don’t! How can you possibly make a profit if you are undercharging for the services you provide? I am usually amazed to hear dive centres say they have to charge what their competitors are selling courses for, as there are many centres that charge more money for greater returns. Here is a rough guide only; at the time of writing, in the South of England the course price averaged between 30 dive centres is £256.00. InSouth Africathe average course price inJohannesburgis around R1,500.00. (Incidentally, inCape Townthe average is now R2,500.00. In the past,Cape Townused to have the cheapest courses inSouth Africa).

Several dive centres that I have interviewed in preparation for this article, told me that since increasing their course prices or by always having higher course prices, they tend to sell more soft gear (masks, fins, snorkels, wetsuits and weight belts) on their entry level courses and hard gear (BCD, regulator, alternate air source, gauges, tanks and dive computers) on their continued education courses. Not to mention most of their patrons signing up for continued education and dive travel! Our top ten centres have an average conversion rate of 99.98% continued education (Our top centre having 411%!). Bear in mind that some divers do more than one course.

A great example illustrating the benefit of increasing course price is from a dive centre located in theUK. They used to charge £199.00 for the PADI Open Water Diver course and now charge £325.00 and report far higher returns on profit, equipment sales and continued education per client.

The top ten dive centres in all countries I service have several things in common; they charge the most for the courses in their area, they have a professional looking shop (probably because they are making a profit) and they are friendly and professional in their manner and image, as well as having decent stock levels in their facilities. Our bottom ten dive centres have the cheapest course prices in town. Many centres need to carry more stock and also improve the visual image of their facility. So in my opinion, the argument about having to charge less for your courses must be inaccurate. If this were not the case, why do our entire top ten dive centres continue to stay at the pinnacle?

Let’s compare scuba diving with other activities: (For my example, I am going to use the United Kingdom (UK) and South Africa (SA) for my pricing comparison. I have randomly called three operators of other activities around the country to get an average price).

Let’s make the table more interesting by dividing the total number of hours taken to provide the activity, assuming that each working day is 8 hours, into the course price. I will then rank the activities according to price in sterling.

Example: Activity; scuba diving, 4 days x 8 hours = 32 hours. £256 ÷ 32 hours = £8.00 per hour. (Sky Diving is calculated as three hours total experience flight and instruction)

Please note that the figures listed below do not take into effect any expenses whatsoever, so the figure listed below will not be net profit!

This proves that when comparing average course price of a variety of activities, scuba diving is by far the cheapest to learn!

Another argument that I have heard is that independent instructors are killing the market by offering cheaper course prices than dive centres. Yet again, in many instances I disagree, as our top certifying independent instructors also charge more than their competitors, in fact in many cases more than the average dive centre! Independent diving instructors also have overheads to meet and in some cases their costs for putting a course together are higher than that of a dive centre. Ultimately, make sure you do the maths by working out exactly how much it costs to run a course.

I would really recommend that you re-assess your pricing policy, and in some cases mend it! Yes, it is broken if you are charging less than your costs. How can you afford to pay your instructors affordable wages if you do not charge the appropriate pricing for your course, let alone stay in business? Well, you may say that you use the courses as a loss leader in order to sell your potential customer diving equipment. In reality, if customers are shopping around for the cheapest course price, they will do the same for equipment, which they could potentially purchase from your competitor!

To come back to a previous statement, what do you do with the customer that is calling around for the best price? To answer this question would take a series of articles as there are many books written on that particular subject. My advice would be to educate yourself on your current outlook. One way you could do this is by ordering our business and marketing guides Advanced Strategies for Recruiting Divers, which has a dedicated section to a customer calling around for the best price and how to handle this situation. Positive Approach Selling could possibly teach you how to close the sale when your potential customer has come to visit you, or indeed even called you. You can also call on advice from your Regional Manager and also take advantage of PADI’s business seminars and webinars. Many of our successful dive centres are already using ideas from these resources. How do we know they are working? They have fixed their prices and business ideas and they are the top ten dive centres in your country!

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