Sibling discounts and whether they pay for themselves

Aug 29
3 min read

Updated: 3 days ago

Introduction

Nearly every setting offers something to families with more than one child. It is expected, it feels right, and it was introduced years ago by somebody who is no longer there. Nobody has calculated what it costs or what it produces.

The reasoning is sound in principle: a second child is easier to recruit and cheaper to induct, and families with two children are more loyal. The difficulty is that a standing discount is also given to every family who would have brought their second child regardless, which for most settings is almost all of them.

1. Sibling discounts and whether they pay depends on who would have come anyway

The question that decides the answer.

A discount changes behaviour only for families who were genuinely choosing between settings. If most of your second children arrive because the first child is settled and the parents are happy, the discount is a gift rather than an incentive.

2. Calculate what it currently costs you

Almost nobody has this number.

Multiply the discounted amount by the number of families receiving it, across a year. Settings are routinely surprised by the total, and it is frequently larger than the entire marketing budget it is implicitly competing with.

3. Set it against the real saving

There is a genuine one.

A sibling costs nothing to acquire, settles faster because the family already knows the setting, and adds administrative efficiency. Estimating that saving gives you a defensible ceiling for what the discount should be, rather than a figure inherited from a decade ago.

4. Consider discounting the second child's least profitable days

More targeted than a blanket reduction.

Applying it only to underused sessions costs less and fills the gaps you actually have. It also gives the discount a reason a parent can understand, which makes it easier to structure and easier to change later.

5. Beware the two-child cliff

Where the arithmetic goes wrong.

A generous percentage on the second child can mean that a family with two children pays little more than one, in a setting where two children genuinely consume two places. Check that the discounted rate still covers the cost of the place before defending it on loyalty grounds.

6. Decide what happens when the first child leaves

The detail that causes disputes.

When the older child starts school, does the younger one move to full rate. Families assume the discount continues, settings assume it does not, and the conversation happens at the worst moment unless it was written down at the start.

7. Compare it against alternatives

The discount is one option among several.

A priority place on the waiting list, guaranteed matching days, or a free settling period may be worth more to a family with two children than money off, and cost the setting considerably less. These are worth testing before assuming price is the lever.

8. Look at what withdrawing it would actually do

Model before deciding.

For existing families, honour what was agreed and change it only for new registrations, which removes the risk of losing people you already have. That approach lets you test the effect over a year without any disruption at all.

9. Whatever you decide, state it clearly

Ambiguity costs more than the discount.

The percentage, which child it applies to, which sessions, how long it lasts, and what happens when circumstances change. Most of the friction around sibling discounts is not about the money but about an expectation nobody wrote down.

If you keep it, keep it because you have decided it is worth the money rather than because it has always been there. The decision is defensible either way; what is not defensible is a standing cost nobody has ever measured against what it produces.

Conclusion

Establish whether the discount is changing behaviour or rewarding families who would have come anyway.

Calculate the annual cost, set it against the genuine saving a sibling represents, consider applying it only to underused sessions, check that the discounted rate still covers the cost of a place, decide in advance what happens when the older child leaves, test non-financial alternatives that families may value more, change it for new registrations rather than existing ones if you withdraw it, and write the terms down clearly whatever you decide.