The Cousin Pays Less

A new student enrolls at your current rate. Their cousin trains in the same 5:30 class, and came in a while back at a lower rate. The two parents are siblings. Guess what gets discussed.

The Cousin Is Not a Family Membership

I'm pretty easy on this one. I wouldn’t offer a family membership (pay for two while the whole household trains) to a cousin (unless they lived in the same household).

The family membership is for one household. A cousin across town is a second household, so they get their own agreement, and so does a friend, a neighbor or a co-worker who sends you a student. Every one of them earns the same courtesy anybody else gets.

Go pull both agreements and look at the DATE on the older one before you look at anything else, because that's really the only thing deciding this. If they joined a few months ago you're in one situation and if it was years ago you're in a completely different one.

Check the Enrollment Date First

If the cousin referred them and the student just joined, they get the same rate the cousin has. That's it. No form, no policy binder, and no conversation about who is related to whom.

Now the difference is if I am at 497/month and 4 months ago I was at 447/month it's no big effect on our income or anything to just charge them the same or not, and no-one cares… anywhere in the 447–497 range works.

Now change one number. If I am now at 497 and 4 months ago I joined Martial Arts Wealth and was at 100/month before then, it's a little different (and by a little I mean the parent is going to do some math you won't enjoy). Now what?

A family looking at 100 and 497 isn't really doing math anymore, they're doing “it’s not fair!”, and may feel taken advantage of. Give the new family a rate in the middle and move on, and it costs you once rather than every month for the life of the account and it wont be a problem once your new pricing is “normal”. Another owner on that forum thread said the same thing and he's right, at least when the gap came from you changing your own pricing.

Anything beyond a brand new enrollment… you just don't discount. The cousin has been training long enough that their rate belongs to them, the new family pays your current tuition, and you answer the question in one sentence without ever defending it.

And if the cousin was a 3rd Degree Black Belt and started 15 years ago? I would just charge the same as you'd do anyone else. 15 years of tuition history isn't a comparison anybody can make with a straight face and that family already knows it (they're the Ed Baldwin of your school, and if you haven't watched For All Mankind he's the astronaut who is still flying missions four decades into the show while everybody who was going to quit already quit). Tell them that at their next testing!

Never Justify the Number

I don't explain or justify anything about my prices. Ever. You can always say "well, rent went up and blah blah blah" but they don't want to hear about your problems! It also invites them to tell you their reasons for not wanting to pay that much, and now it's a competition over who can be the most compelling.

Owners reach for the same six lines, every one of them can be true, and every one of them hands a parent a rebuttal option or they just don’t care. You could be negotiating about landlords, insurance carriers and what your instructors deserve.

Every up-sell in America runs the same move, where the reason shows up before the number and the reason is all about the seller. Why do we keep reaching for it? Because saying a number and stopping feels rude, and it is not. They buy or don’t buy because of VALUE, certainly not because of your P&L (as if every customer of every business for every product had an accounting of the businesses expenses and then accepted a price based on that…. Only in government contracts!)

Psychological reactance says that when people feel their freedom of choice is being pushed on, they push back, and the strongest pushback comes from controlling language (Steindl et al., 2015). Should, must and need to all read as pressure. Consider and could don't.

I need you to agree that my price is fair.  →  “Tuition is 497.”

There's a second problem and it's worse. Kahneman, Knetsch and Thaler found that customers judge a price increase as acceptable when it protects a business against rising costs, and unfair when it just captures demand (Kahneman et al., 1986). That sounds like an argument FOR justifying, right?

The moment you tell a family that tuition went up because costs went up, you've made cost the rule. Now every future increase needs a receipt, and the year you raise tuition because the program is worth more, you're the bad guy.

Customers also treat the most recent price they saw as the reference transaction, meaning the deal they believe they're entitled to. Kahneman's team wasn't studying cousins, but it works the same way here, and the cousin's 100/month IS that reference now in both households until somebody replaces it.

There's also a study I love where researchers walked up to people already waiting at a library copier and asked to cut in line, three different ways: with no reason at all, with a real reason ("because I'm in a rush"), and with a reason that says nothing ("because I have to make copies," which is true of every single person standing in that line).

On a small favor, five pages, the empty reason worked as well as the real one (Langer et al., 1978). 93% said yes to "because I have to make copies," against 60% for no reason at all. The word because did the work. What came after it didn't matter.

Then they raised the ask to 20 pages and the empty reason collapsed to 24%, which is the identical number you get from offering no reason at all. Once the favor cost something real people actually started listening to the reason, and tuition is very much the 20-page request.

To be fair a genuine reason did move the 20-page ask up to 42%. It also put the asker's problems into the conversation, and once your rent is in the conversation you own it forever!

Comparing to Hockey Is Justification, Not Analysis

Every owner has done this. "Well, travel hockey is $8,000 a year and dance is $200/month, so we're reasonable." It feels like analysis while you're doing it, and it isn't analysis at all.

I wrote a whole book about this and the distinction that matters is justification versus gathering data (Moody, 2025), where gathering data discovers what's actually true and justification just validates a belief you already hold.

Run the test on yourself. Did you price at 497 and then go look at hockey? Would the hockey number have moved your price if it came back the other way? If Hockey costs tanked would you lower price (or would your program be more valuable?) If not, you weren't gathering anything, you were shopping for personal emotional comfort (which is OK but let’s call it what it is).

If you do a little price comparison so you feel better, fine, but realize that's all it is, "so you feel better"… just keep it out of the conversation with the parent.

Once you say hockey out loud, you've agreed to be judged on hockey's terms, and a parent who accepts that frame keeps going.

Thaler's work on transaction utility explains what you just did to yourself (Thaler, 1985). A buyer's sense of whether a price is good comes from the distance between that price and a reference price they're already carrying, more than from the value of the thing itself.

His example is a beer, and it's the same beer and the same person and the same thirst. Bought at a resort hotel it's an expected annoyance, bought at a grocery store for the identical money it's an outrage, and NOTHING changed except what they expected to pay.

Starbucks built an entire vocabulary out of this, where tall means small and nobody argues about it, because tall is the reference now and small was never on the board (they didn't explain that either, and it's been going fine for 30 years).

When you say hockey you've handed the parent a fresh reference price and it isn't one you picked. What belongs in your office is your P&L, your retention numbers and your instructor payroll, for your administration of the company not for price justification.

Raise the Price!

The cousin conversation is a symptom of one thing, which is a school that sat at the same price for years and then jumped. I've been increasing my price over time consistently and that is the whole answer, it is just BORING… and it works for me because I am already priced where I should be.

Most of the owners I talk to are not. They're sitting at 147 and they need to be at 397 or so, and higher than that for the leadership programs, and there is no version of $50 a year that gets them there before the lease runs out. That one is a jump, you take it, and then you go back to boring.

Here's where being cheap actually costs you, and it is not the basic tuition. Your basic price sets what you can charge for the upgrade. If you charge 397 for basic you can charge 797 for leadership, but if you charge 100 for basic then the leadership price may need to be 197 or so… and you just capped your best program with a number you picked years ago.

That is where the money is, and it is why the first number matters more than the one conversation about the cousin. Nobody walks in knowing your price or anybody else's (well, except the cousin, right?). What they DO carry 2–6 weeks later is whatever you charged them the first time, which is what the renewal and the leadership upgrade get measured against (see the Past, Present, Future renewal conversation for how to run that one).

An older family sitting at 100 while the school sells at 497 didn't happen because of one bad decision, it happened because nobody moved the number for years and then moved it all at once.

Set your increase schedule once, run it EVERY year on the same cycle, and your staff will stop improvising in front of parents, which is where most discounts come from.

What You Say…

Enrollments don't happen in the lobby. They happen sitting down with the family, and the number should already be settled in your head before you walk in there.

It also has a name. It is a referral scholarship, and a scholarship is something you GIVE, on purpose, for a reason that flatters them. A discount is something they pried out of you. Same 197, completely different conversation.

Never say “I can do.” It sounds salesy and it sounds like you are negotiating with them, and you are not negotiating, you are telling them what the scholarship is.

Notice what's missing from all five. No rent. No insurance. No "we haven't raised prices in a while." No hockey! And not one of them says “I can do” or asks their permission to charge what you charge.

Every one of them ends by handing the family the next thing to do, because the next step is what actually ends the conversation (this is the same move that carries the price question on the phone, where quoting a number without a next step loses the appointment).

When you find yourself wanting to poll three other owners about what to charge, read the eight biases piece first. Owners at your level will usually agree with whatever you're already doing, because they're doing it too.

Polling the room is WebMD for your P&L. You go in with one simple question and come out convinced you should lower your price and lie down because you have Lyme disease. Ask somebody who has already run the increase you're afraid of.

What Your Instructors Say When It Comes Up

This doesn't come up often, maybe 2–3 times a year and usually when two families compare notes at a birthday party or in the parking lot. When was the last time your staff actually practiced answering it?

I don't much care what the students talk about among themselves. I care that my instructors answer the occasional question RIGHT the one time it gets asked.

That makes this a training item and not a pricing item, so your roster is probably fine… it's your staff that needs practice.

When you do enrollment conference training at your staff meeting, include these outlying scenarios occasionally (see my staff training articles for more). Follow the role playing rules (loud, not on a handout, and have each instructor say them until they can get all the way through one without justifying.

These conversations are also easier than they feel in your head. The parent standing in front of you isn't trying to win. They just want to know they're being treated like everybody else, and a number plus a next step tells them that faster than any explanation could.

That covers these cases but if a version of this comes up that none of the five cover, reach out and we'll figure it out together.

Greg Moody, Ph.D.
Chief Master Instructor