Group, Small Group or Private: Three Tutoring Tiers That Do Not Cannibalise Each Other

Why does the middle tier pull families away from the other two?

Put three options side by side and the one in the middle starts with an advantage. A review in the journal Judgment and Decision Making sums up research going back to Itamar Simonson's work in the Journal of Consumer Research: people tend to avoid the extreme options, and an option tends to gain share simply by becoming the middle one in the set.

For a tutoring centre, that means the small group will draw families from both sides once you offer all three. Some parents who would have been content with a group class will move up, and some who were ready to pay for private lessons will settle for the small group because it feels like the sensible choice.

That pull is not a problem if the small group earns you at least as much per teaching hour as the formats it takes families from. It becomes a problem when the small group is priced as a slightly dearer group class, because then every family that moves up costs you a seat you were paid more for, or a tutor hour you now need twice.

How should you set group vs private tutoring pricing?

Start from the hour, not from the child. One tutor teaching for one hour is the unit you actually sell, and each format is just a different way of filling that hour. A group of eight, a small group of four and a single private student all use the same tutor for the same hour, plus a room and some materials.

So work out what the hour earns in each format when it is full. For the group, that is the group fee per session multiplied by the number of children in the class. For the small group, it is the small group fee multiplied by its cap, and for private lessons it is the private fee on its own.

Then compare the three figures with what the hour costs you, which our guide to pricing a first term builds up from tutor pay, rent and materials. Every tier has to clear that cost when it runs at its usual size, not only when it is full.

How big should the gap between tiers be?

Small group class pricing is where centres usually go wrong, and the test is simple. If the small group has half as many children as the group, its fee per child needs to be about double the group fee for the hour to earn the same. Price it lower and you are selling more of the tutor's attention for less money per hour.

That gap also has to look right from the parent's side. If the small group is only a little dearer than the group, it looks like the obvious upgrade and your groups thin out. If it is close to the private fee, a parent will ask why they should share the tutor at all, and the small group loses its own families to private lessons.

Private lessons sit at the top and should earn the most per hour, because the tutor cannot spread the hour across anyone else and private bookings tend to move around more. Its price also gives the small group its reference point, so keep a clear step between the two even if only a handful of families ever book private.

Each tier has to buy more than fewer children

A tutoring tier structure works only if each step buys something a parent can name. If the only difference between the tiers is the number of children in the room, families compare the price per child and nothing else, and the middle tier wins every comparison.

Write the difference into the class description. A group follows a set syllabus at the pace of the class on fixed days. A small group is grouped by level, school or exam, and the tutor has time to go through each child's homework and questions.

A private student gets their own plan, worked on their own school material, at a time agreed with the family. Spell out the rescheduling rule for private lessons too, because flexibility is part of what the family is paying for, and an unwritten rule gets stretched.

What happens when a small group does not fill?

A small group with two children in it is a semi-private lesson sold at a small group price. It is the quietest way the middle tier eats the top one, because the families get close to private attention for less, and they will expect it again next term.

Publish a cap and a minimum for every small group before enrollment opens. If a group has not reached its minimum a week before the start date, offer the families a choice, such as joining a group class at the group fee, moving to private lessons at the private fee, or waiting for the next start date.

Do the same in the other direction. Never let a small group creep above its cap because one more family asked, since a full small group run over its cap is a group class charged at a higher fee, and parents notice.

Moving families between tiers without losing them

Families will want to move, and each move is a chance to keep them rather than a loss. A child who has caught up in private lessons can step down to a small group, and a child struggling in a group can step up before the family gives up on the centre.

Allow moves at set points, such as the start of a term or the end of a package, and write the rule into the enrollment form. A move mid-term creates refunds and part-sessions, which is how a pricing ladder turns into a set of private deals.

Do not discount a tier to stop a family moving down. If private lessons are no longer worth the price to them, a cheaper private rate teaches every other family that the private fee can be negotiated, and it shrinks the gap that keeps the small group in its place.

Reviewing your tiers each term

Look at each tier once a term and ask three questions. How full did it run against its cap, what did one teaching hour actually earn, and in which direction did families move between tiers?

In Happy Kamper, staff record attendance with timestamps for every class, and billing and payments issues each family's invoices in rupiah, so the class lists and invoices you need for those questions sit in one place. The price of each tier and the gaps between them stay your decision.

If you run a tutoring centre that sells private lessons in packages, our guide to session packages at a bimbel covers keeping each family's balance straight. When a tier keeps running below its minimum, change the gap before you change the price.