The Litchfield Park Lesson: Raising Prices 40% in a Foreclosure Market

One member put his numbers on the table on this week’s coaching call. From 2021 to early 2025, his school enrolled 93 percent of the families who came in for an intro. Over the following year that fell to 80 percent. Since February it has been running around 60 percent. Other owners on the call — in tech-heavy markets on the West Coast, in an area where teachers are being laid off — said they were feeling the same thing: more hesitation, more “I don’t know if I’m going to keep my job,” more families hanging on to their money.

I want to take that seriously, because sometimes it is real. And I want to show you what one of our coaches did the last time his market went through something much worse.

The Center of the Foreclosure Map

Greg Moody had a school in Litchfield Park, Arizona, in the years before the 2008 housing crash. It was a booming area — new families everywhere. He remembers his first belt testing there as 108 white belts. Enrolling was easy.

Then the housing market collapsed, and as Greg remembers it, Litchfield Park and Henderson, Nevada, were at the top of the national foreclosure lists. Families who still had jobs were watching their neighbors lose their houses. The news was bad every day.

What Greg did next is the part worth studying.

1. He increased his marketing. Fewer people were enrolling from the same effort, so he needed more effort.
2. He raised his prices — by about 40 percent. He admits he was scared to. His reasoning: if he was going to enroll fewer students, each one needed to be worth more, and his prices needed to go up anyway.
3. He inspected every lost sale. Every intro that didn’t enroll, he wanted to know why. Every phone call that didn’t turn into an appointment, he wanted to know why. Nothing was allowed to slip through unexamined.

The result: his closing rate did not change after the price increase. He had to do more marketing to get the same number of enrollments, but each enrollment was worth considerably more. And because he tightened the systems across the whole company — seven schools at the time — every location got better.

When the market recovered, his business was more efficient and more effective than it had ever been in the easy years. That is not much comfort while you are in the middle of it. But it is true.

A 93% Close Rate Is Not the Goal

Here is a point Greg made that most owners will not want to hear. If your intro-to-enrollment rate is 95 percent or higher, something is probably wrong — not with your enrollment process, but with your marketing. It usually means you are only reaching the families who were already sold before they walked in. You are not marketing widely enough to reach the ones who need convincing.

In a boom, that works fine. When the easy families dry up, the school that never learned to enroll the harder ones feels it first. So a falling close rate is sometimes a sign the easy years hid a weakness. That is fixable.

Tighten From Both Ends

Jeff Smith’s framing is the right one. A drop from 93 to 63 percent feels terrible. But if you are running 30 to 40 first intros a month, 63 percent is still 19 to 25 enrollments — enough to grow substantially, as long as you control dropouts.

So you work both ends at once:

• Leads. Get your first intros into the range where the math works. In our coaching, 50 first intros a month is an A, 40 is a B and 30 is a C. Below a C, no closing rate saves you.
• Conversion. Hold your intro-to-enrollment rate at 50 percent or better. Some families will say they can’t afford it. If half do, you are still fine.
• The pond. Ask whether your leads have shifted. Did a live event, a mailing area or an ad audience start pulling a weaker demographic? One owner on the call noticed new transit service was bringing in families from well outside her usual area. Are you fishing in the right pond?
• Retention. If you enroll 15 and lose 15, you are flat no matter how well you sell.

The Whole Menu

When a market softens, there is no magic trick. Greg said it directly: the menu is short, and you do all of it.

• More marketing. More leads means a few cautious families hurt less.
• Tighter systems. Don’t assume your phone calls are right. Don’t assume your intros are right. Listen to them. Inspect every lost sale.
• Raise prices, if you can hold your close rate. Counterintuitive, but if your closing rate holds, the same number of enrollments produces more revenue. See the Premium Price Ladder for how to do it without losing students.
• Retention. Every student you keep is one you don’t have to replace in a hard market.

If your school has already shrunk, the Five-Gate Regrowth Sequence walks through the order to fix things in.

Nobody can tell you when a local slowdown ends. What you can control is how good your school is when it does. Move from 63 percent to 80 percent in a hard market, and imagine what that school looks like when things get easier again.

Quick Answers

How do martial arts schools survive a recession or local downturn?

By increasing marketing, tightening the phone and intro process so fewer prospects are lost, considering a price increase if the closing rate holds, and protecting retention. Schools that improve their systems during a downturn usually come out of it stronger.

Should a martial arts school raise prices in a downturn?

It can make sense. In one school’s experience during the 2008 housing crash, prices went up about 40 percent and the closing rate did not change — more marketing was needed, but each enrollment was worth more. Test it against your own closing rate.

What is a good intro-to-enrollment rate for a martial arts school?

In our coaching we treat 50 percent of first intros enrolling as the floor. A rate at or above 95 percent often means the school is only reaching families who were already sold, and should be marketing more widely.

If you want the whole system rather than one fix at a time, grab the free book at FillYourSchool.com, or call or text 1-720-256-0208 and ask Bob Dunne about a free evaluation of your school.