Why Move to the Percentage of Performance Revenue Model? (FAQ and Teacher Explanation)

As a business owner, it’s crucial to explain why you’re moving to this payroll model, especially when most competitors might still be using the traditional flat-rate or per-head model. Here’s how you can present the change:

Aligning Pay with Performance:

The new model ensures that teachers are rewarded based on the actual success of their classes. The more popular and well-attended their classes are, the higher their pay will be. This directly aligns their efforts with their compensation.

Increased Earning Potential:

Teachers who drive more attendance and build a strong student following can potentially earn more than they would under a flat-rate model. The flexibility of earning based on performance offers the potential for higher overall income, especially during peak times or popular classes.

Fairness and Transparency:

The % of Performance Revenue model is transparent and fair. Teachers can clearly see how their pay is calculated, and it’s directly tied to the revenue they help generate. This transparency can foster trust and a stronger sense of partnership between the studio and its teachers.

Supporting Studio Sustainability:

By aligning payroll with revenue, this model helps ensure that the studio remains financially healthy. A financially stable studio is better positioned to offer more classes, create new opportunities, and provide long-term job security for teachers.

Addressing the Concern: "Will I Earn Less with Unlimited Members?"

It’s important to address concerns that teachers may have about earning less when unlimited members attend their classes. Here’s how you can explain it:

Higher Total Revenue:

While the per-registration revenue from unlimited members might be lower, the total revenue generated by these members can still be significant due to the volume of classes they attend. For example, if multiple unlimited members consistently attend a teacher’s classes, the cumulative revenue from these registrations can contribute significantly to the teacher’s overall earnings.

Example:

If 5 unlimited members attend 30 classes each in a month and each class generates $3.33 in revenue per registration, that’s $500 in total revenue. If these members regularly attend a particular teacher’s classes, the teacher benefits from this steady stream of income, even if individual registrations are lower in value.

Building a Loyal Student Base:

Encouraging unlimited members to attend classes helps build a strong, loyal student base. Over time, this can lead to additional opportunities, such as private sessions, workshops, and increased replay views which can be more lucrative. A larger, more engaged audience also enhances the overall teaching experience and contributes to the teacher’s professional growth.

How to Communicate the Change to Your Teachers

When communicating this change, emphasize the long-term benefits and how this model supports both the teacher’s financial well-being and the studio’s sustainability:

1. Be Transparent: Clearly explain how the new payroll model works and provide examples so teachers can see how their pay is calculated.
2. Highlight the Benefits: Focus on how the model aligns with their performance and provides opportunities for increased earnings.
3. Provide Reassurance: Assure them that the studio is committed to their success and that this change is designed to support both them and the business in the long run.
4. Offer Support: Make sure teachers know they can reach out with any questions or concerns. Providing a detailed support document or holding a meeting to discuss the changes can be very helpful.