Thanks everyone! I'm really glad I posted this thread. I definitely feel a renewed sense of hope that I can do something about this. All your ideas have given me good things to think about and I'm feeling like I can start working harder on getting out there instead of just waiting like I have been. Thanks!

The schools in my area are always hosting silent raffles etc. for fundraisers. Maybe donate a set of 8- to 10-introductory lessons to one of the fundraisers. It's good publicity, a tax write-off, and I bet there's a good chance that the family who wins it will continue.

I would also contact the school administration and see if there are any possibilities for sending home flyers with the students. It probably varies by school or school district, but my kids' schools were always sending home flyers from karate studios and the like.

I agree with the others that you should not lower your rates. The amounts you are talking about would not be a deal-breaker for most families, and the risk of alienating your current families is way too high, imo.

On the idea of offering current students an incentive for referrals, I'm thinking of something different than the standard free lesson, etc. What if I offer my current students this?...

"For every student you refer to sign up for lessons you'll receive $10 off your monthly tuition for as long as each new referred student stays enrolled, up to 1 year."

I would lose $120 in a year from the student making the referral, but from a new student paying $90 per month I would make $1080, still netting $960. I figure even if a student referred 9 students and I had to give them free lessons, I'd still have 9 new students. Can anyone think of a reason why this might be a bad idea?

Thanks Monica, I'll see about the flyers. And I like the fundraiser idea. Wouldn't have ever thought of that one!

This could get messy because it's something you'd have to keep track of over time. Plus a one-time free lesson is far easier to manage than financially taking a hit each month. What happens when a student is sick? Do you make it up as if they paid for it in advance? What if they decide to go shopping last-minute rather than come to lessons? I think you'll find lessons are much more likely to be missed, not prepared for, and rescheduled in the above scenario. Granted, it is an extreme case. But consider that the message to the parent does eventually become "cheaper lessons" or "free lessons", which devalues lessons subconsciously for most people. This is why setting a good lesson rate is so important - too low and you're not appreciated.

I can't take credit for it... I saw it mentioned here in some previous thread a while back, but I can't remember who suggested it.

I don't like the idea of find-me-a-student-I'll-lower-your-tuition-a-little. Nor do I like the idea of giving a free lesson in return for a referral. It sounds mercantile, and as Morodiene observed, maybe complicated. Besides, kids don't pay for their lessons anyway, so it's not an incentive to them. Thirdly, $10 a month is trifling.

But you could certainly remind each family in your studio that you welcome referrals. That's more dignified. If you actually get a new student, then you can always improvise a thank-you for the referral if you wish.

As a young teacher I did give a free lesson for new students who enrolled in lessons via referral from a current student. This was relatively painless and it got my students talking about me. The kids did it more because they were then aware that I had openings and they wanted to help me out. The parents did it because they wanted the free lesson.

At some point, however, I no longer offered that as a "perk" just because I didn't need it. I think one could probably get the same effect to just make students and parents aware that you have openings and ask if they know of anyone who might be interested in lessons. I do that now and this helps a great deal.

Thanks again everyone. Thinking about all this some more, I've concluded that anything that involves lowering my rates should be avoided. There are plenty of other things I can focus on to help get more visibility. I appreciate everyone's input!

I've done the school fundraiser thing before. The school does their fundraiser in the spring, so I donate 5 lessons to be given the following summer. I've always retained these students!

Provide very good referral fees for parents who refer you.
My program is....
Receive $150 credit towards piano lessons after new family complete 20 paid piano lessons. This is more than a month of piano lesson!!
It is easy to keep track, when you receive the new student, just keep track in their notebook and count the date up to 20. When they come to your piano lesson for 20 times, you will give $150 credit towards your old student who refer you.
Very easy!