Simpedia

Laurie R. Nebraska

Anneka,

Thanks for introducing this topic. I have taught traditionally for a few years and am just now beginning to get started with my Simply Music studio, and I had not been familiar with referral fees for teachers. I will admit that when I first read your original e-mail, my first reaction was a bit negative. But after reading and thinking about your philosophy behind the fees, I can understand the logic behind it. It benefits all parties involved – the referring teacher (monetary “reward”), the accepting teacher (new student!) and, of course, the student reaping the many benefits of SM.

I think it also speaks to a higher calling than growing our own individual studios; namely growing the Simply Music program as a whole and the wonderful vision that drives it.

Cathy H. California

I completely agree with Anneka about the benefits of paying referral fees. I am currently in negotiations to take over a non-SM teacher’s studio and in recent discussions with her I was surprised to discover that it is very common here among teachers of other methods to pay $100/student referral fee (not a buy-out fee). Like Anneka, I have also been teaching for less than three years, have a very large studio and spend a lot of money on advertising each year. I also look at the fee as compensation for my advertising costs and time spent recruiting students. If, according to Neil, his average cost of recruiting a student through advertising was approx. $100 anyway, why spend the time finding the student yourself when you are being handed a student for the same price, that has the potential of bringing you thousands of dollars in income, without the work to recruit them? To me that’s much more time and cost efficient–no question the better deal!

As far as groups go, if you’re new and afraid to try a group, put together a small group first – four students. It’s a good way to break yourself in. You can change the size later. My home cannot accommodate more than six students at a time so I consider my groups small. The educational benefits far outweigh private and are so much more fun. Once you’re teaching the foundation program, accompaniment, rhythm, notes, arrangements and reviewing the Playlist each week, time gets really really tight! In a group that’s about eight minutes per program, and the students work together expediting the learning process, twice the time of a private lesson.

Samali D. AU

I think that the issues around the use of referral fees are highly complex and involved. In November 2002 a number of teachers came together after a joint advertising venture to discuss the use of the referral fee and difficulties that had arisen as a direct consequence of its use here in Perth over the seven month period after it had first been introduced. Rhea P. did a great job of summarizing our thoughts back then, which were subsequently discussed at a Perth teachers association meeting. Some of you may not have had the opportunity to read this document so here it is.

Rhea P. AU

Our recent joint advertising effort at the Royal Show provided an opportunity for some of us to catch up with other teachers. One of the issues that seemed to often come up in conversation was the operation of referral fees. A number of teachers were concerned that operation of referral fees sometimes does not seem to serve the interests of Simply Music as an organization or the interests of some students, or in fact sometimes not even the teachers.

Consequently, a number of teachers who were concerned about the operation of referral fees decided to meet to further discuss issues relating to the referral fee and consider some possible solutions to problems that had arisen to date. Our main concern was that in many cases the current system was not serving all points of the triangle that Neil speaks about: Simply Music, the student and the teacher.

I offered to document the content of the discussion but I suspect I’ll be trying to summarize all of the conversations I’ve had with everyone about this issue. Before I start I’ll declare my standpoint: I am neither unequivocally ‘for’ or ‘against’ the referral fee system and therefore I’m not lobbying for any particular outcome. I believe there are sound reasons why a referral fee system should be in place and equally, there are sound reasons why it should not. My over-riding concern is that we work out an understanding that preserves the wonderful community of teachers that currently exists in Perth and I’m trying to help clarify the issues so that understanding may be reached.

The format of this document is to give a brief history of the referral fee and the issues about it’s operation then puts discussion points for two cases:

1. The History of the Referral Fee
2. Problematic Scenarios Experienced to Date
3. Issues with the Current Operation of Referral Fees
4. The case for referral fees
5. The case for no referral fees.

1. The History of the Referral Fee (as I understand it):

The concept of the referral fee was introduced into the community by Neil during a conference call during a meeting at the home of Joanne J.  He then spoke about it again at a training session in April. He explained that, when he was a teacher, if someone could give him a student for $100 he would be very grateful as is would be a bargain. That is, the acquisition of this student at $100 would be cheaper than he would ordinarily pay (through advertising and associated costs) and he would likely have a highly motivated student all charged up with high expectations of his quality as a teacher.

Also, the student represents, in terms of future fees potentially thousands of dollars and so, the fee of $100 is really very small in comparison.

While Neil emphasized the referral fee is and should remain negotiable, the reality is that the $100 fee has been accepted as standard with apparently not much negotiation going on (correct me if I’m wrong).

Neil also emphasized that the operation of the referral fee has nothing to do with Simply Music, is not a Simply Music policy or protocol, and that we as a group of teachers need to work out its appropriate operation.

2. Problematic Scenarios Experienced to Date:

To date we are aware of a number of problematic scenarios that have arisen on at least one or more occasions:

A student without a teacher because the referring teacher and the referee teacher were not able to come to an agreement about the amount of referral fee.
A teacher being asked to pay a referral fee for a student that came to Simply Music through joint advertising, to which she had contributed.
Students being referred to a teacher in a location inconvenient to them because the closest teacher was not the highest bidder.
Students that have come to know of the referral fee system have in several cases felt: angry at being traded as a commodity? And upset that a materialistic
gain (referral fee) was prioritized over their musical education.
In one case a student was not referred to the nearest teacher (7 minutes away and the lower bidder) but was referred to another teacher (45 minutes away) because of a referral fee. The student, who was not aware of the referral fee system, mistakenly assumed that she had not been referred to the closest teacher because that teacher was not sufficiently competent.

3. Issues with the Current Operation of Referral Fees:

The dollar value of the referral fee does not represent our true acquisition cost : While Neil, as a teacher was happy to pay $100 a student because it was inexpensive to him because he was running a large studio. For many (if not most) of the teachers in Perth, our acquisition cost is nowhere near $100 per student.

The acquisition cost of a student is exponential (if it follows standard advertising economics). This means that your first 10 students cost you very little; your next 10 are a little bit more expensive, your next 10 a little bit more. At some point however, the cost to get your next student (for example, let’s say your 60th student) will rise quite sharply and continue to rise with every new student. That means that your 100th student will cost you a lot more than your 60th (for example).This is because the amount of advertising you have to do to get that many students is very significant.

Because most of us choose to run small practices, we largely acquire students through word of mouth, or small or moderate amounts of advertising. That keeps our acquisition cost low.

Also, it seems that some of us are not keen to grow our practices very quickly (many of us are still learning and are not yet in an urgent growth phase) so we don’t necessarily view a blank timeslot as a loss of income. For instance, if you eventually want to be teaching three days a week but are currently only doing one day, you may feel quite comfortable about how long it takes to grow to three days. Therefore, for some of us, paying $100 for a student to fill a timeslot when you’re comfortable that one will come along for free when you’re ready for it doesn’t make economic sense.

Both our low average acquisition cost and the fact that we are not all in growth phases causes situations where the payment of a $100 referral fee doesn’t make economic sense. If you can place an ad in the local paper for $100 and get two or three students out of it, why would you want to pay $100 for one referred student?

There are situations however, where the payment of $100 for a referred student makes economic sense even if your average acquisition cost is less. It could make sense if the student was a proven, committed student (as opposed to simply a name and phone number) AND you were in a growth phase. It could make sense if you were starting a group and desperately needed a couple of other students to make the group viable. It could make sense if you didn’t want to do your own advertising or information sessions but wanted another teacher(s) to do the marketing for you.

The point is that it sometimes makes sense to pay a $100 referral fee but it often doesn’t.

Complexities in the operation of the referral fee:

When should a referral fee be paid?
Should a referral fee be paid if the student moves and is no longer in the first teacher’s area? Or is that just what happens sometimes?
Should a referral fee be paid if the student needs a more advanced teacher?
Should a referral fee be paid if the student wants a different teacher (for whatever reason)?

Do all types of students have the same value? Do you pay for a name and phone number from another teacher in all situations? What if the student came from shared advertising (for example, white or yellow pages)? Do you still pay then? Is there a difference if the student is an unknown quantity (name and phone number only) versus a student that is already known to a teacher (has already completed some of the program)?

Should there be a standard referral fee? If so, how much should it be? Should it always be negotiated? Should there be a different standard fee paid by large practices (say over 50) as opposed small practices (under 20)?

Does the amount of referral fee depend on the type of advertising that attracted the student? For example, should you pay more for a student who wanted to sign up after someone’s information session (lots of work went into it) than for one who signed up having picked up a business card from somewhere?

In addition, the operation of the referral fee may become more complex as the name of ‘Simply Music’ becomes better known in the community. If Simply Music is more widely advertised, how can it be determined which ad was most instrumental in getting a student to make the first phone call? For example, a student may have read an advertising article in the newspaper about Simply Music place by one teacher and not called that teacher. Subsequently this student may then have found a flyer at the local deli and called a different teacher. Which advert actually caused the student to call? The chances are that the first ad had a big impact on the student but that teacher did not end up gaining from the advert.

4. The Case For Referral Fees

The Student as Income potential: A student represents thousands of dollars in potential future revenue and the current referral fee of $100 is a small amount in comparison.

Rewarding Teachers for Prior Work: If there is no referral fee in place, it’s possible that some teachers could acquire most their students via the work and advertising investment of other teachers. This doesn’t seem fair.

Also, unless there is an incentive for advertising teachers to pass on students that they can’t ‘service’ to other teachers, it’s possible that they won’t bother (not out of spite but just because we’re all busy!). This would be detrimental to both other teachers and Simply Music as an organization.

It also doesn’t seem fair or make sense that if you’re closing down part or all of your practice that you wouldn’t stand to gain financially from passing on a group of committed students.

5. The Case Against Referral Fees

Other Professional Practices do not have Referral Fees: Many other professions do not pay referral fees, especially those dealing in a personal way with people. For instance, Physiotherapists, Doctors, Psychologists Legal practitioners, and, in fact, other music teachers do not pay referral fees and yet all of the arguments in support of referral fees also apply to these professions. These professions seem to operate on a reciprocity basis. That is: what goes around comes around. It seems that these professions take a long term view of their practice and of their relationship with others in their profession. Professions that do have a referral fee/commission arrangement tend to trade in commodities (e.g. houses) rather than personal services.

A Referred Student has no Economic Value: It can also be argued that if a teacher is referring a student on to another teacher, it means that the referring teacher cannot/ doesn’t want to teach that student. That means that the student does not represent any ‘future potential revenue’ to the referring teacher. Why should a teacher be paid for the student’s ‘future potential revenue’ value when that value is no longer present for them?

Duty of Care to the Student: In many of the situations discussed above, the student appears to be the loser where they are not referred to the teacher most conveniently located to them. The referral fee can imply that students are commodities that can be ‘bought and sold’ which can have the effect of reducing our duty of care to students. It can be argued that what should be paramount to us as teachers is that the students are given the teacher who best suits them and not the teacher who is the quickest or highest bidder.

The Interests of Simply Music as an organization are not served by the current system:

In the current situation some teachers participate in the referral fee system whilst others don’t, or do so to a limited extent. Consequently, in many cases students are not being efficiently referred to the teacher most convenient to them due to the confusion caused by referral fee negotiations and the lack of protocol. Where individual students are frustrated the organization can only suffer as a whole. Moreover, a further cost of the current system is the dissension and conflict which appear to be a byproduct of it. This would be notably absent from a ‘courtesy’ based system which would promote reciprocity and goodwill amongst teachers.

Vonnie L. Oregon

Thank you so much, Rhea, for this well-written summary of the pros and cons of referral fees. It is a much more complex issue than I had imagined. The subject probably won’t come up for me for a while, but I have been trying to figure out where I stand. I can understand the arguments on both sides. I think I would tend to go for simplicity, putting the student’s needs above ours and avoiding any hint of commodity trading – which means not using referral fees. But I still think I would be very willing to pay a fee to a teacher referring a committed student.

Here is a rather idealistic proposal: Since we assume that all SM teachers are honest and principled – a referring teacher could choose who, in their opinion, would be the best teacher for a transferring student, keeping in mind distances, experience, personalities, schedules, etc.; then suggest a referral fee based on their average cost of generating students. The referred teacher could then pay the full amount or a lesser amount, depending on their situation. The referring teacher would then accept that amount without a grudge. If the new teacher didn’t pay at all or very little, they might not get many more referrals from that teacher, but at least one student would be well served.

If we can continue to discuss the issue in a calm, detached and respectful way, I think that eventually a satisfactory solution will emerge.

Rhea P. AU

Yes, the referral fee issue is a difficult one. I haven’t been able to sort things out in my head about what is right. All I can say is that I’ve been happy to pay referral fees when I’ve been able to take the student on. I guess in my heart I feel I’m honoring the referring teacher’s work in acquiring that student, and if the student is a long-standing one, the work the teacher has done to keep the student keen and interested.

I suspect that the referral fee would work better for everyone if we could get the right kind of guidelines for its operation down. I say that because it’s become obvious that some teachers do not advertise and yet acquire students quite easily, their student acquisition effectively being funded through the joint and individual advertising of other teachers. And this is also not fair.

I have found it very easy to fill my studio through my own advertising, through joint advertising and through word of mouth. But I am under no illusions … the only reason my studio filled up so quickly was because Simply Music is developing a name and is effectively differentiating itself from traditional methods. Speak to traditional teachers and you’ll find out how difficult it is to get new students. Most traditional teachers I know do not have full studios and are envious of our easy acquisition rate.

I have a full studio and I don’t need to advertise at all. I also have a waiting list of people who don’t want to be referred on to other teachers. But I still participate in joint advertising.

I feel strongly that because we are marketing and delivering a brand name product it is our responsibility to ensure that that brand is well represented out there. The Yellow Pages ad is the shop front for the brand name. Remember the great benefit of the Yellow Pages is that we can do general advertising and direct people to that ad. If you’re not in it you’re invisible – and even though I don’t want more students I don’t want to be invisible.

If we don’t advertise together, the pool of students we’re trying to generate will shrink and the costs of student acquisition will rise sharply. So I urge everyone to think through the issue. I consider Yellow Pages advertising to be a fixed cost of being in business. We have the choice of fragmenting as a group or binding tighter – I’m pleading for the latter.

Hilary C. AU

Thanks Samali and Rhea,

I have – reluctantly – paid referral fees for students on the grounds that they would have no teacher if I did not – and on one occasion I sought a fee and that potential student stayed just that – a potential student. I have decided I am against the ‘trafficking’ of students especially in the light of the anomalies that I know of in the Perth scene.

I have the SM website on the back of my car – does this mean that I should receive some fee from every teacher who enrolls in the areas through which I travel? And I do move around Perth metropolitan area quite a lot.

Maybe I’m too idealistic, but I think that advertising, collective and personal, is about raising the profile of SM, not just building our own studios, but building the community of SM, being revolutionaries. And I also know that I have not spent $100 on advertising for each student I now have.

At one stage here it seemed to me as though it would be more lucrative to do introduction sessions and pass the potential students on to teachers for the $100 fee – which is why a group of us got together to discuss the issues you have read courtesy of Rhea – (and by the way we learned subsequent to our meeting that the idea had come from one of our teachers, not Neil)

Yes I have known the frustration of ‘putting out’ and getting no response or no response in my area but that is the nature of business or life generally and have referred to other teachers – general reciprocity seems to me to be the key words here.

I also am getting more convinced that the response we get is partly at least of our own making – when I have needed students I have got them. Call it the universe, God, whatever, but there does seem to be some (no)thing that gives what you need when you need it and are aligned to receive – ‘boldness has power’ quote from Neil – was it early last year?

Well I guess I got off the point somewhat but to those who are worrying about building up your studio – and it is a scary – take heart – it will happen and in the best way.

Joanne J. AU

Hi everyone,

The question of referral fees has been a vexing one for us here in Perth for more than 2 years now, and during that time I have thought long and hard about it and had many discussions with other teachers. I find I am absolutely unable to endorse making a referral fee ‘standard practice’ and agree with much in the e-mails in this vein so far. I would like to add the following:

Most teachers over the course of their association with this program automatically make substantial contributions to the whole picture in a myriad of ways and are very likely responsible for the enrolling of students they have no idea about in other areas just by the network of contacts in our society.

One teacher taking responsibility for finding another teacher for a student, removes the freedom of choice of the student. Learning music touches our very core, and freedom to choose who will be honored with our trust as a student needs to be a given.

If, as has been suggested, there is very little monetary gain via referral fees in comparison to the outlay of advertising and time it is therefore not cost effective anyway to become involved in relocating new students – furnishing them with the web site address is very simple and all that is required for them to access all teachers in their area if we don’t wish to actually give the relevant numbers. For the teacher who has advertised, this is an opportunity to serve the Student and Simply Music in the triangle of ‘Teacher, Student, Simply Music’ that Neil has respectfully asked us to honor. We are each well rewarded for our advertising efforts by the students we do enroll – otherwise it wouldn’t make economic sense to continue to advertise.

The only way a referral fee system would work fairly, is if every teacher participated and, as each teacher is an independent business, there is no way to make this compulsory. It has already been demonstrated that, for various valid reasons, there are teachers who choose not to participate and therefore it is simply unworkable on this basis alone.

Success in any field of endeavor is dependent upon being focused on the main goal. If we are committed to the wider Simply Music vision then it is automatic that we will happily support new teachers as we ourselves were supported in the beginning – the circle of life is so much richer and more rewarding when we allow a natural flow of giving and receiving. My personal experience over the years is that financial success has always followed when this philosophy is practiced and that paid referrals are definitely not necessarily an integral part of good business practice nor are they essential in the building of a successful business.

Finally, I believe from what I have observed that referral fees have the potential to jeopardize the freedom of choice for all teachers and students alike which in turn has the potential to be extremely damaging. I for one am not prepared to take this step.

Apart from all of that I am totally ambivalent!

Laurie R. Nebraska

Hello to everyone –

Joanne J. commented: “… The only way a referral fee system would work fairly is if every teacher participated and, as each teacher is an independent business, there is no way to make this compulsory…”

It’s a good point, but couldn’t it work for a group of teachers, not necessarily ALL the teachers in your area, who agree to adopt a referral fee system together? It’s basically another form of advertising, and we don’t all have to advertise in the same way to be fair. A potential problem might be a teacher feeling s/he were not receiving a fair share of referrals from the group compared to the others in the group.

I think that students/parents appreciate referrals rather than being on their own to pick and choose from teachers they do not know. Their freedom of choice becomes important once they get to know a teacher’s style, personality, abilities, etc. – if it does not mesh with their own expectations, they have the freedom to make a different choice.

After reading the responses thus far, it seems there is not one right answer; it depends on the dynamics of our respective areas, especially how many teachers are in the area. For example, I think there are merits to a referral fee system, but I wouldn’t use it right now in my city because there is only one other SM teacher right now, and we are advertising together and helping each other to build up our studios. However, to a group of teachers who agree to the system and agree upon a rate, it could be beneficial.

Joanne J. AU

I feel that we are dealing with a much deeper issue here.

In Perth we had a tightly knit, cohesive group of very supportive teachers who did not need monetary reward for everything they contributed to feel their efforts were honored. This was a trait often noted by others from elsewhere and I believe the reason we grew more quickly than in any other location and had ‘that special feeling’. Perth people are open, friendly, generous and fair minded, and in my opinion this dilemma has nothing to do with being willing (or not) to pay (or receive) for a service given, but rather the result of alarm bells ringing about being sucked into ‘money making is the only valid activity in running a business’. Of course it is important, it is the reason for being in business and, after all, the currency our society is based on, but it is not the ‘be all and end all’, and taken too far, becomes destructive. I must stress that not only have I no problem with making money or enjoying the ‘fruits’ that it buys but that I have always found that monetary gain and prosperity has naturally flowed from generosity of time and expertise when given in the normal of course of making ones living. Being an all-round winner, which I unequivocally consider myself to be, overcomes any sense of lack of fair play if others do not appear to be ‘pulling their weight’. (The ‘widow’s mite’ may have some relevance here)

We in Perth are in the unique position of having tried to bring in the referral fee system with a reasonable sized group and over a reasonable period of time, and quite simply it has been an awful experience. Since the referral fee raised its controversial head about 2 years ago, it has been a divisive thorn in our side. Nothing will be gained by spelling out details but I (and others) have spent many hours listening to painful experiences on all sides of this issue, and it just is not worthy of our precious time and energy. I would like to reiterate part of a paragraph from my previous e-mail: Most teachers over the course of their association with this program automatically make substantial contributions to the whole picture in a myriad of ways…therefore they are contributing to every other teacher’s success anyway. After all, the smallest parts of a machine are just as vital as the on/off switch.

Laurie wrote “….I wouldn’t use it right now in my city because there is only one other SM teacher right now, and we are advertising together and helping each other to build up…..”

And isn’t that a great feeling that gives energy to earn more – everyone is a winner!!! Why should we lose this opportunity just because the teacher numbers increase?

On a broader scale, every Simply Music teacher to date is in the unique position of being part of the foundation of a ‘world changing’ program, thanks to Neil’s vision and willingness to give of his all to bring it into being. How amazing and rare to be part of what will be recognized in years to come as a remarkable moment in the history of music education. All communities are made up of vastly different people with different talents and levels of capacity, the acknowledgement of each one’s contribution as being valid and equal in the overall picture is what creates a healthy, happy, developing one. Let’s not jeopardize our experience of this or limit its positive power by introducing a practice formally that we have found in reality to definitely not be a simple business decision.

Kate H. AU

Dear All,

The variety of opinions regarding a referral fee may be a cultural issue. I lived and worked in Asia for some years, and there the notion of a cut or commission or referral fee was taken for granted. I found it unusual at first, but it certainly promoted a good feeling between people doing business together and somehow was tacitly understood by everyone involved so no awkwardness was experienced. There was a willingness to pass on and receive clients or business in a spirit of mutual benefit. The student will never be the loser if we know the excellent standards and results of SM are universal.

As a teacher starting up in SM, I am hugely impressed by the forum itself. What an opportunity to build a community and to discuss such issues.

Colleen H. AU

Well done Joanne and others. When this discussion was first introduced, many Perth teachers gave it a go. My biggest concern was my students. I followed the referral fee system, but as our Perth base of teachers built up, many teachers did not want new students. Being asked to pay a fee gave teachers an easy way for them to say no.

Where does this leave the student? I am happy to say I have just passed on 7 students with a 100% success rate. If a teacher had space, they were happy to accommodate a new student. Some I have been teaching for 2 years and they have embraced the program. The students still keep in touch with me, and are happy with their new teacher. I feel I have integrity to the program, and I have not lost in any way by not charging a referral fee. I have still paid the Yellow Pages 2003/2004 ad, and all phone calls I receive, I direct to another teacher (as I am happy with my number of students at present). What comes around goes around, and if ever I want more students, I know I will be supported by my colleagues.

Anneka S. AU

Dear teachers in Perth and everywhere else,

I was touched to see the response in regard to my call for supporting the referral fee as a standard practice. I could read from the Perth e-mails that this issue is close to people’s hearts, and that many people experience a sense of unhappiness around it. I thank you all very much for sharing your feelings and opinions, and I would like to emphasize that I don’t mean to throw the cat among the pigeons with my e-mails. I know and deeply respect that people who wish not to establish the practice of a referral fee come from a place of wanting to be generous, and helping others out.

I also really appreciate the respect respondents have shown me in pointing out that they don’t judge teachers who do charge a referral fee, even if they are against it. I am fond of the Simply Music teachers I know, and I feel a warm bond with those I don’t because I know we share our love for teaching this great program. Like Joanne, I believe strongly in generosity, and I have been abundantly blessed in my life thanks to that natural flow of generosity.

Yet I still believe that having a referral fee as a standard practice to support people who need more students and people who are good at generating them, is a good thing for all of us. Could it be that the reason that it hasn’t been supported well in Perth reflects emotional issues around feeling OK to charge for something that offers a value? This corresponds with the fact that the overwhelming majority of Simply Music teachers in Perth do not need to earn their living from Simply Music.

I understand that many teachers do not need to take on students, and that it is their prerogative not to do so. However, if they are taking on students, then I would suggest it is good to have it as an accepted practice that there is a fee that compensates the teachers who have generated them. Generating students is a function of time, resources and expertise invested and therefore has a cost. It also creates wealth and stimulates the growth of Simply Music and our studios and therefore it has a value. I believe that giving the act of generating students a currency creates clear boundaries that recognizes that there is a cost and value. I have no issue with people having an alternative opinion, but I invite you to be open-minded when you read this e-mail, to see if you might find some truth in there that you might not have appreciated before.

As an example, I would like to compare people saying “Let’s not charge a referral fee” to the fictional idea that I and some other teachers might start saying that we only charge $15 per private lesson (I know most teachers in Perth charge $25 – $30 per lesson, so this is considerably less.) Let’s say we do this under the motto: What goes around comes around. We find teaching comes easy, so we don’t mind giving it away for a low price. We can afford to do so because our income is not the primary income for the family, and giving the lessons so inexpensively makes us feel good.

If we are outspoken about this, and publicize that this is a good thing to do, it might work for us, i.e. we might feel good about our generosity. However, I believe it doesn’t serve the marketplace, where other teachers are charging $25 – $30 and need to do so, considering the time they spend, and the income they need to earn. I think it could intimidate people to feel that if they charge $25 – $30 they are overcharging, reduce our rates, deflate our confidence in the value we’re offering, and make Simply Music a less attractive career to pursue.

Using this example, I also wonder whether people consider that if we choose to give that $10 – $15 to our students, that in fact we are taking that money from ourselves/our family. Could it be that if the referral fee was an accepted practice, teachers would be happy to charge it and pay it and they would feel that the value and the cost their referred students represented was fair?  I wonder if it is perhaps a bit of a chicken/egg thing, because of issues around charging a referral fee and because it isn’t supported well, it is a hassle to pursue it and people feel bad about charging when others don’t. Do people then justify not charging it by enjoying how nice it is to do something for nothing?

I think in a situation like Laurie described, where two teachers advertise together and help each other out equally it is wonderful to circumvent the logistics of having a referral fee, and I think a tally system is great, with a referral fee system in place once the line of ticks becomes one-sided or a third teacher starts up who is not part of the advertising. But I think once the tally isn’t equal like here in Perth, where there are many different teachers in different situations it is good that a referral fee is instituted as an objective currency, (just like has recently been implemented in Perth with teachers who receive students from the Yellow Pages when they don’t share in the advertising cost).

This would allow new teachers to know they can easily obtain students and help more potential teachers create the Simply Music teaching lifestyle which we all love so much. It would help more enterprising or experienced teachers to create and maintain groups, and it would encourage existing teachers to keep growing Simply Music and to be rewarded for the time and effort they spend.

Joanne, I don’t know the fine details of the painful stories you mentioned on all sides of the referral fee issue, but I did hear that there were occasions were students didn’t end up with the closest or most appropriate teacher, because they went to someone else who paid the referral fee. I feel this is exactly why the referral fee should be a standard practice so that if a closer teacher can and wants to take on another student there is no issue around paying a fee.

For the teachers who reckon they can easily generate new students if they want to: please do so, and reap the rewards for your efforts. And you don’t need to shy away from paying the referral fee if you take on anyone else’s students, knowing that you’ll receive a referral fee in return when you generate more students than you can take.

I would welcome a world where Simply Music is a household name and where the Simply Music vision that people commonly feel that they can express themselves musically becomes a reality. I believe the growth of Simply Music and a world where this is the case needs to be underpinned by a sound business system, that rewards being a teacher and rewards spreading the word. I would love to see vibrant growth of Simply Music, where we commonly see people advertise on the forum, that they are looking for Simply Music students, or Simply Music teachers in certain areas and where those requests are easily fulfilled. I believe all this is much more likely to happen if people accept the referral fee and it is instituted as a standard policy.

If teachers in Perth decided to accept the referral fee as a standard practice I have some ideas on how to address the issues that have arisen in the past to make the referral fee work for all of us, and I would be happy to share them.

In the meantime, I don’t mean to put people offside and I respect that there are differing opinions on this issue. I hope the above offers some more food for thought and I look forward to everybody’s response to it.

Ginny W. AU

Hi all,

I have deliberately not added to this discussion, because it has seemed that most of the broader issues have already been discussed (and then some!). I agree that it’s an imperfect but possibly needed system, as is the collective yellow Pages ad.

What I would like to add here is a question. Are you all aware that a referral fee effectively involves a cost in time rather than an out-of-pocket expense?

A referral fee is not owed until a student ACTUALLY signs an agreement and has paid in full. Effectively, if I (for argument sake) charge $25/lesson, in cycles of 5 lessons, I would receive $125. I would give $100 of this to the referring teacher and keep $25. In other words, I would be giving 4 free lessons initially after which time all fees would be mine. I even think this example is modest – that $25 is too low and that we should be charging more than that for lessons, taking into account the Association fees and so on (ie $27.50 or $30 per lesson- I’m talking AUS$ here).

Perhaps this helps in reframing the value of a referral fee?