April 6, 2016, Jerusalem, Israel
Coffee in Caxias du sol, Brazil
Sitting with a friend at Greg's Coffee in Jerusalem and discussing business. He wanted to know how I ran IKI. He assumed that each franchise, each IKI school paid me a substantial income each month. When I told him what I actually charge (see Membership), he nearly choked. Poor thing, I should have warned him about my funny prices.
He himself is in the financial field, fund raising for university programs. He deals in millions of dollars. When rich donors, very rich donors, donate money they say it is because of the prestige of the program/university.
One donor said the three main criteria are Prestige, Prestige and Prestige.
That got me thinking.
For years many people have told me that IKI is way under priced, undervalued. Sadly some people see that as a sign of less quality. I explained to my friend that each member can contact me as often as they want, request any clip, a solution to any situation, any help in programming, any advice, at any time, all for a pittance of a few hundred dollars a year. Yes, a year, not a month. In fact the price drops dramatically after the first year, and again after the second.
After he recovered from the initial shock he pondered the issue and offered the following thought.
He told me about a new Israeli coffee company run by a very religious man. By chance the fellows' name is Katz, like mine.
This fellow Katz, was on the road, in Israel and stopped off at a gas station to buy some coffee for himself and his associate. A cup of coffee was 18 Shekel, an ice coffee 22 shekel, cake and a cookie or something another 18 shekel. He had only grabbed a 50 Shekel note. He realized he had to run back to the car to get more money. And then he realized this is ridiculous.
He thought, I am on the road a lot, as are many Israelis, at this rate I cannot afford more than one cup of coffee a day, but I want a few cups a day.
So what did he do?
As I was told as a child, if you do not like something as it is, do not complain, just do it better yourself.
And so he did. After all, how difficult is it to make a cup of coffee?
Coffee in Morelia, Mexico
So this Katz fellow started a coffee chain that sells the same cup of coffee for 5 Shekels instead of 18. And he still makes a nice profit.
Today there are more than 300 branches all over Israel. Their slogan is:
Also a great experience.
I can relate, understand and agree.
So what my friend was saying to me was, you are not necessarily doing a bad thing, business-wise, IF you make your point clear, as they do at this new coffee chain. I.e. We could charge $1,000 (and up) like the "other" Krav Maga associations, but we choose not to because, like you, we are fed up with those Corporations. They are more business than real self defense. And we the people are fed up with them.
So we are saying that just like the new coffee chain we at IKI offer you top quality Krav Maga, in fact we believe it to be the very best in the world. We offer you low prices and we offer you a great experience with great service.
So what about those who charge more? What is their logic? What is their angle and why do so many flock to them?
Prestige. The more you charge the better people assume it is. But there is more, there is the snob factor.
Starbucks in Mexico City, does not come cheaply.
I was in Mexico City recently, the Peso is down, people are crying from depression, no one can afford anything, it is dangerous to walk around with cash, but Starbucks is packed and they are all over the place.
I asked my friend, "Well, I assume due to the terrible economic conditions Starbucks must have lowered their prices, as did I, to match the local market?"
No, I was told, and so it was, the prices are the same as Europe and the USA. And Mexicans who cannot even afford a car are lining up to buy the expensive brew.
As my friend explained, Walking around with a Starbucks in your hand puts you in a different class of people, you are seen as intellectual, wealthy, of refined taste.
So there are two ways to go, the snob factor or the people factor. Mr. Katz was fed up with paying 18 Shekels for a cup of coffee that costs 2 shekels to make. So he did better.
When he founded the new company Katz said, "We are counting on the cooperation of the public that was royally screwed."
I feel the same way...with Krav Maga. Why pay so much?
People were fed up with organizations that charge you the equivalent of a monthly mortgage payment to be affiliated to a Krav Maga association, so they came to me and asked me to start a different kind of organization, an honest and fair one.
Yet I know that there will always be those who want the Snob Factor. There will always be those who will pay for than an item is worth just because others will not have it.
Keep the prices up - Keep the poor people out.
I hope people can see the difference. I hope they can tell the difference between a 5 page website that is 90% commercials and a 1,000 page website that is 90% free information.
Why pay 18 Shekels for a cup of coffee (4.72089 USD), when you can have just as good a coffee for 5 Shekels (1.31113 USD)?
As always the choice is yours. You can lead a man to the coffee shop but you cannot force him to make the wise decision.
Quality - Fair pricing - A Great experience
Join us For Tour and Train, the coffee (at the training center) is always on me.
Very well put, and I thank you for not being so expensive as some other for I would not be able to afford to do it. But he was right there have been studies for example with wine. They put an expensive label on a cheap bottle of wine and a cheap label on an expensive bottle without anyone knowing. And the majority said they liked and preferred the more expensive wine which was only the label not the wine. It's strange that is the way people think. I sure as I know that your system is of the highest quality,and that you are a better man for wanting to help people over getting rich from people. Thank you for that.
Gary Bishop, Canada
Great piece of work, reminds me of the story of the Kings invisible clothes, everybody wanted to appear sophisticated and bought in to the illusion so as to not loose face and appear stupid but as we know the king was naked and the fine silk and gold thread was just a lie a confidence trick by the tailor.
There are so many tricky tailor type Krav Maga instructors out there and I suspect they are spinning an illusory system and the people pay 18 shekel for something worth 2 shekel because they know no better.
The truth of the matter is that a business model based on illusion and high margin is ultimately doomed because eventually the people see that the king is in fact naked.
The IKI business model as I see it is the reverse to selling an illusion, IKI builds on
1. providing quality information (Web site) 2.it's evolving nature regarding improvement of the physical movement to achieve the most effective krav maga.
3.affordable membership that promotes a long term view for virtually any student.
4. A non hierarchical system of management which makes for a more fluid and free movement within IKI.
So yes IKI could milk the student for all he/she is worth but this would be a short term strategy, instead as I have experienced myself IKI looks for the quality in the student and tries to develop that through Krav Maga. That's why I have always referred to IKI as the peoples krav maga.
Best Regds T,
Tony Preston, United Kingdom
I couldn't agree more Moshe. Many things in life are subject to such snobbery and sadly we live in a consumer society where perception has become reality. But few things in life are worth paying over the odds for - I buy expensive suits for work from the Taylors in the the UK - why, well because with some things you get what you pay for and as I speak I am wearing a suit that I bought in 2009 which is still as sharp as the day I bought it, a cheap suit would not have lasted not would it still look good even if it had lasted.
However, with that comment we come to realize that we are talking about quality. Now we find the distinction. If I could buy my suit for $500 or an identical one for $1000 which would I choose......... The snobs would run to the expensive one whilst I would be happy getting the right garment at the right price. And to use the same idiom you often see that the more expensive brand, in time, is less well made and is shoddy because people rely on a historical reputation and think that it is automatically better due to the price. That my friend is where as you so eloquently put it have pitched your stall so to speak exactly right and I for one am glad to be getting the right teacher at the right price.
That said - I'd pay what ever you asked for to be your student anyhow. Haha.Chris, Perth, Australia
Good morning Moshe,
As always, it is great hearing from you! Thank you for sending me this article you wrote. Jeannie and I know that your business (IKI) is in your heart and not in your wallet. You want to protect and teach people how to protect one another as well as themselves. That is why we still come to class and support your business. You are right about being affordable. I have two sons that are in different martial arts and they cost more than what my wife and I are being charged at IKI. One of my son's martial art classes cost more than both me and my wife combine. I really hate to see how corporate companies get greedy such as (Starbucks) and want to have a 500% mark up on their products. They expanded here in the U.S. too quickly and realized after 2009 when the economy crashed, they realized they made a mistake and had to close down several hundred coffee shops.
My motto, I believe pay now (cash) or do without when you can afford to pay. Live simply within your means, and treat people with love and respect.
You are the CEO of IKI and when the CEO of a business can come to your school and give personal Krav Maga lessons, that is priceless. Thank you Moshe for not inflating your IKI prices throughout the years, and keeping real with your students.
Your student and friend,
Shawn, United States
recently ran a seminar for young women here. The focus was on
preventing sexual assault. We had three TV stations and two radio
stations covering the event. I was interviewed about 6 times. Often I
was questioned as to why I chose IKI to be affiliated with. I
responded, because Moshe is my friend and he is motivated by love and a
true desire to help. Additionally IKI is a system that seeks to make
things more simple as our goal is truly to equip people with what works
vs trying to looking showy. Thanks you for making me proud to be part
of the IKI family because your heart is to help and protect. Thanks for
making Krav Maga accessible to girls like these who were in this class.
Much of what I do for groups like this is free, they don't have any
extra money, but that doesn't mean there life has no value. This
Saturday we are the keynote presenters to a single moms group. Many are
desperately in need for Krav but again are struggling to make ends meet.
We are taking a team to work with the whole group free of charge. You
are making Krav accessible to groups like this, God Bless you!
Colby Taylor, United States
Hallo Moshe Katz
Sehr guter beitrag und auch
ich frage mich warum muss in der welt vieles teuer sein obwohl man es
anderes anbieten kann für jeden menschen. Es ist schade zu sehen wie
viele menschen andere ausnutzen und damit auch noch durch kommen. Man
müste sowas unter binden. Ich bin ihnen sehr dankbar für ihr vertrauen
und ihrer super unterstüntzung denn das was sie mir geben ist sehr viel.
danke dafür und danke das ich ein teil ihres Teams sein darf.
Moshe, I totally agree. I was was raised in Morrow Co. Ohio, in Farm country, and I knew a few people that still had outhouses around 40 yrs ago. How did we ever survive without granite counter tops in our kitchens and double "vanity" sinks in our en suite bathrooms. Give me a break. Somewhere along the line people started believing that having money, means you're a better human being. How shallow is that? It has turned people self-centered, cruel, cold and uncaring. I see that old caring soul in you. I almost got sucked into the American version of krav, so thankful I didn't. I think that your stance on prices, accessibility to you and how you operate IKI as a whole is a testament as to the type of "human being" that you are sir. Thank you!!
Jerry, United States