Q: I'd like to incorporate sibling discounts into our pricing structure for the first time. What's worked well for you, and what hasn't?
A: We've been offering sibling discounts for more than 40 years. It's beneficial for several reasons: The more a student's siblings become involved, the more committed families become. The parents often become recital helpers, share referrals and post positively about the studio on social media.
But before you roll out a discount program, review your pricing structure to be sure it can support a percentage of your student body participating at reduced rates. Fees for nontuition services—registration, performances, competition teams—typically aren't included in a sibling discount, so be sure to set them properly to account for your administrative costs.
We recommend you start with a modest discount—$5 to $10 or 5 to 10 percent off—for the second and/or third child's tuition. (While that might not seem significant, a $10 discount over 10 months is the equivalent of getting two months of free tuition for one class.) It's much harder to start with a big discount and then realize a year or two later that you're giving away too much and need to reduce it.
Be sure you set a clear policy—it can be confusing if you give families the option to use multiple discounts, for example. If the older child is already getting a multi-class tuition discount, explain that you're willing to give the younger child an additional discount as a sibling.
Your studio software management program can help you calculate, track and post proper fees with calculated discounts. Confirm with your provider how to best manage discounts so you can run your payments correctly.
Kathy Blake is the owner of Kathy Blake Dance Studios in Amherst, New Hampshire. She and Suzanne Blake Gerety are the co-founders of DanceStudioOwner.com.