Breaking Down Price Transparency: Its Effect on your Admissions Strategy

In a time of global competition and rising economic sensitivity, parents are continually asking, “Is it worth sending my child abroad? And what are the best alternatives?” Often, the alternatives are a bunch of competitors of comparable value and experience at similar costs without distinction, which results in growing uncertainty amongst parents due to a lack of information. Price is never a perfect reflection of the value of your school or brand; that is why there is such a significant need for price transparency. With leaps of tuition inflation in recent years – especially at private institutions in the United States, in particular – students and families worldwide realize they have thousands of choices from the US to Canada and the United Kingdom to Australia. Each country has its pros and cons.

Let’s first focus on the US and its current international education landscape. Although for the last few years, the US has received over a million students studying in the country, the market has been trending downwards since 2015. According to SEVIS and the Department of Homeland Security, while the overall number of students has been steady or even increasing, new student enrollment decreased by 6.6% in 2018 (https://studyinthestates.dhs.gov). Even more alarming is the declining number of students coming from major markets in East Asia – between 2018 and 2019, Chinese student enrollment at the secondary level dropped by 15.4% with similar decreases in students coming from Vietnam and South Korea.

As the global competition for the best students heats up and markets continue to be driven by price, families may be tempted to make misinformed decisions due to the lack of knowledge and misinformation of services. To better inspire confidence in your prospective families, we need to shift their motivations away from price alone and towards an understanding of the full value of your product (your school in this case). Here is where price transparency comes in.

When information becomes more apparent to everyone in a market, the value of each competitor also comes into sharper focus. You define the value you add to your customers and quantify it in terms of prices more precisely because you know where you stand price-wise versus your competitors.

This requires a considerable shift of paradigms and mindsets within schools worldwide, and should widely prompt administrations to analyze the following carefully:

1. What is your school’s competitive edge compared to others nearby?
2. Who does your school partner with, and how are they providing services to you?
3. What is the value of each of the services, and what else do you want from a provider?

In short, you should stop devoting resources to guessing what others were charging and more time to quantifying your relative value and assess how these prices are set accordingly. If you treat price transparency as a model and resource, you can get a jump start on opportunities to strengthen your value proposition. The reward is greater confidence in both the accuracy and the effectiveness of the prices you set. Ask a Cambridge Network Program Manager on how we have implemented a price transparency model into our business practices.

Below is a general breakdown of a high-level, macroeconomic perspective of host nations for international students:

• The United States
  • Average total cost (homestay plus tuition): ~$55,000
  • #1 destination for international students
  • Complicated visa/green card process
  • Global preception of concerns over student safety
• The United Kingdom
  • Average total cost (homestay plus tuition): ~$40,000
  • #2 Host nation for international students, 3.6% increase in 2018 
  • Low international student population compared to the British student population at the schools
  • According to the Independent Schools Council (ISC), in 2015, over 17,000 international students were studying at schools in the UK at school level
• Canada
  • Average total cost (homestay plus tuition): ~$40,000
  • #4 Host nation for international students, 16% increase over the previous year
  • Simplified visa/green card process
  • International reputation of tolerance and safety
• Australia
  • Average total cost (homestay plus tuition): ~$35,000
  • #4 Host nation for international students, 10.1% increase in 2018
  • Simplified student visa process, single study visa category and evidence level framework for all students
  • Warm climate and close to East Asia