Test Prep Professionals

Diversifying SAT/ACT Offerings in a cost effective way

If one visits a major test prep company’s website, one is likely to see a number of offerings beyond the standard tutoring packages or classroom course.  Lets look at the SAT since it is timely.  If we visit either of the two largest companies, we are likely to see: 
 1) The standard classroom course 
 2) some sort of intensive short course 
 3) standard tutoring package offerings 
 4) small group tutoring.  
Moreover, we are likely to see each of the categories above segmented  even further into online and in – person options.

I chose the word “segmented” by design because this sort of brand diversification is essentially known as a segmentation strategy.  Without going into too much detail, the general premise of segmentation strategy is that consumers span a continuum. What I mean by this is that some consumers want the standard classroom offering while others want face to face attention, and still others prize convenience over all else.  To expand even further, price sensitivity exists along the continuum as well.    Given these variables, there is a strategic benefit to crafting courses or offerings that match the varying needs along the consumer continuum.  Said differently, having more than one offering  is important in order to span the continuum.   The result is a series of different value propositions designed to meet varying consumer needs.   Large test prep and tutoring companies have the advantage of resources and are therefore well suited to employ this strategy in order to capture as much market share as possible.

So, what can smaller concerns do to join in the fun?  Interestingly, small companies can be effective following an approach similar to that of the big guys.  Here are some general recommendations.

1)  For classes:  Take a good look at your curriculum and determine if you can reduce the content to some core offerings that could fit into an “intensive” format.  This may mean reducing 18 contact hours and 3 proctored tests to 8 contact hours and 2 tests.   Something like this could theoretically fit into aweekend only offering or a one week intensive class.  The price point could be reduced because the overhead expenses (room rental, instructor time etc.) are reduced.

2) For tutoring:  Consider small group offerings that target key parts of the curriculum.  Again, the overhead is reduced and the profitability enhanced because one tutor will have more than one student, therefore the margin of profit is essentially increased by a factor equal to the  number of students.  I would be remiss if I did not point out that it is good form to compensate your instructors  at an elevated level since they are on the hook for more work.  Also worth noting, small group tutoring is most effective when the group of students being  instructed has a similar set of  competencies.

3) For either:   Timing is important.  As the exam date draws nearer, the subset of students who have not adequately prepared grows larger.   This is an opportunity so be ready for it.  Marketing messages should focus on this subset of learners.  Don’t forget to name your new offering;   names like“intensive,”  or “boot-camp,”  or “short course”  resonate well.

4) Expertise worth something:   Proctored exams with item-analysis feedback and teach-back sessions for a nominal fee have merit.  The expenses are typically reasonable (a room, a proctor, and maybe 2 hours of instruction 1 week later).   Most big companies will use this as a loss-leader (i.e. FREE)  to increase awareness and enter practice-test takers into their lead queue.  Still, the big companies cannot be everywhere.

5) Lastly, at some point having the ability to offer online products will reach a tipping point in our industry.  After a good deal of research, I have only been able to find one company that offers (SAT) white label supplemental programs for a reasonable price to test prep providers.  By reasonable I mean $80 – $100 per student for two to three online diagnostic tests, about 500 quiz questions, and complete video explanations.  You can access their site here  SAT Supplemental Online Offerings.  Scroll down the landing page to find out more.

These are just some general ideas to consider.  The key take-away is that an existing product or curriculum can be segmented into a series of additional offerings or value propositions without adding a great deal of expense.