Positive Peer Pressure is a wonderful way to motivate kids to practice. They see other's doing something, and they want to do it themselves. That's why joining a group or ensemble is a great way to motivate students to practice.
In private lessons students are learning the important fundamentals of music. How to read the notes, keeping a steady beat, they are building flexibility and dexterity-- all very important skills to build to be able to make great music! (Not to mention to make connections in the brain that aid in development and success in other areas of life).
BUT if students are in a rock band or choir with friends their private lessons now suddenly have an immediate purpose (versus the longterm). When part of a band they now practice because they don't want to be the ones to mess up the group, or because they are excited about what they are playing together. The motivation of playing or singing as a group is huge in getting kids to practice. There are also the additional benefits of learning to listen to others and to work as a team to make music, and just having fun!