Daycare.com Forum - View Single Post - Why Do Daycares Use Waitlists Instead of Raising Prices to Meet The Demand?

Originally Posted by Myst_Seattle:
Thank you for the response, now we're finally getting to a real answer So you're saying people won't drop off the waitlist but would refuse the spot eventually and leave you with no clients in the end?
Or in other words daycare providers don't have a stable supply of customers and prefer a long waitlist to maintain job security? No, I'm saying with your approach, there is no money. While yes, job security is important to absolutely everyone who HAS a job, maintaining profit along with longevity is the goal.

However your example is flawed as it represents a bad business practice. The example I gave is what would happen with YOUR approach. YOUR approach is what's bad business practice because it leads the provider down a path of more work, less profit.
Real life businesses do this differently:

1. You start with a price of $100/week and a waitlist of two years
2. You keep the same price for existing customers but raise the price for anyone joining next year to $120
3. As you go through the waitlist it shortens and now your waitlist is 1.5 years long
4. Next year you raise your price for new customers by another 20% to $150
5. After going through the waitlist you've now shortened it to 1 year only and stop raising your fees

Most daycares already raise their prices for new clients, so your point is moot.
As long as there is a shortage of providers, nothing changes the wait for a daycare. Price gouging only shifts the wait to other daycares. But hey, it's not illegal in your state (although it is in others).

That's how my local barbershop which suddenly became very popular did this. I still pay the same fee as I did a few years back, but new customers have to pay 50% more. They are now considering increasing the price even more, as they still have more customers than they can handle.

An alternative option is to have a fee to skip the waiting list. So for say $5000 you'd get to be the first family to get offered a spot. That's how Disneyland works - if you stay at their very expensive hotels you get to skip some of the lines. This is also how airports work - if you buy a business class ticket you can skip the regular line to the security check.

^ THAT is actually not a bad idea, although considered unethical in our line of work. However, in my experience, the clients who have the most money, aren't always the best ones. But for $5000, I'd consider it.

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