15 May 2006

Institutional Competition

At the end of the academic year insecurity begins to gather about the September to come. Each school owner is thinking about promotional campaigns, numbers of new students, books and educational materials to be adopted, but also about their direct competition; other schools in the neighbourhood, chain branches, private lessons providers and even, sometimes, their own teachers.

I thought it would be useful to analyse here the kind of competition that threatens the average school owner the most. More specifically, school owners often report unfair competition through direct inaccurate information against their school, either through copying of their ideas, inaccurate exam results on competitors’ windows, and most importantly through competitors offering low tuition fees or even free courses. The truth is that none of the above behaviour can be directly dealt with, as either they cannot be proven, or, in the case of low tuition fees or free courses, it’s impossible to change the mind of a school owner, who, without a business plan and a specific strategy, has chosen a suicidal attitude towards the market, thus strangling the other schools nearby.

Why, though, do school owners, suicidal or not, choose such unfair approaches or low tuition fees / free courses to compete with the other schools in their area? As I’ve mentioned a number of times before in this column, effective marketing really means the development of, and communication of, competitive advantages. Aren’t there specific competitive advantages that any school could work on? Aren’t there solutions to make every school more attractive to parents, through developing a better educational system that parents would appreciate? At the end of the day, however, would parents actually appreciate any such possible competitive advantages?

This problem, which didn’t exist more than 15 years ago, has never been related to the ability of a school owner (or lack of it) to achieve a better, more effective marketing strategy or better service promotion and sales. I believe the problem has always been that school owners deal with the wrong kind of competition, i.e. professionals in their own field, instead of facing the real competition that has limited their growth potential to an all-time low; their own market, parents and students, their own representatives in the field, and primarily themselves, who neglect the most useful target of their profession: educating their own market about their role as foreign language schools.

This I call “institutional competition”. Eight out of ten schools we serviced in 2005 named as their number one competitor private lessons and low fees. These two factors are very significant in how the market perceives the ELT field. Our 2005 market research showed that the vast majority of parents with children in the ELT field believe that all private language schools do roughly the same job, probably using the same level and quality of materials and sharing a common exam success rate. It is not my purpose to analyse how true this is or not, but rather point out how it explains the market’s attitude.

If parents indeed believe that wherever their child goes he/she will pass the necessary exam and get the desired certificate, then how irrational is it for a parent to choose the school that is closest to home and furthermore, the school that is closest to home and cheapest? And how irrational is it for a parent to hire a private teacher who will come to the house and get paid much less than a school would?

Who has ever talked substantially to the parents about the pedagogical implications of the classroom environment, methodological issues, the running costs of a school, the reasons why some of them change teachers every academic year? Who has trained the parents to check the qualifications of a private teacher who gets paid only 4 euros an hour?

Is it maybe that all parents, excusably so, consider the private ELT field a necessary evil; an expensive substitute for the public sector that should really provide this service? Do they indeed feel it’s unfair for them to have to complement their children’s education with private tuition, due to the state’s inadequacy to provide good foreign language education? Does this resentment breed anger, leading to raw blackmail against the school owner, together with indifference about their child’s progress?

The truth is that no other public sector in Europe is doing any better a job than the Greek educational system, at least as far as EFL is concerned. Swedish public school teachers have never heard of the CEFR, which reaches them only as experimental workshops funded by European programmes through the local municipality. French students hardly reach a B1 level by the time they finish school. Italian students already define the biggest PET but not FCE market in Europe. The only difference lies with employment requirements. And the determiner in our case is the “recognition” of certain specific certificates in the public employment sector and thus in major parts of the private sector.

Parents are certainly not aware of these facts. They would also never admit that all they really care about is the certificate. They would never admit that a certificate defines the end of what I would call “constructive learning phase” and the time when usage training should start. Besides, that is why 77% of adult certificate holders cannot actually ‘use’ the foreign language.

Moreover, who can tell parents that things should be different, if things are really not that different? Could it be that school owners have identified themselves too much with the role that both the state and the parents / students market have given us, calling ourselves educators, but actually doing nothing more than following set publishers’ syllabi towards a specific certificate? Is it by chance that our national success rate at Proficiency is 29% when small, nearly unknown Latin American countries reach 100%? How can we fight institutional competition without redefining the actual phases of education through differentiating our role, something that we have the flexibility to achieve as private businesses? How can we develop our own competitive advantages if we do not, in practice, connect the foreign language as a skill with professional orientation?
When school owners choose my services for a better marketing strategy, I tell them, in honesty, that however much money a school spends on communication and advertising, it is more down to good luck, incidents (like a school closing in the area) or something temporary that will pay off any advertising investment. Learning targets differentiation will revalue the role of the trained educator, redefine tuition fees and payment terms, re-educate parents and clean up the market map, as at the moment, as we are all well aware, just about anyone can open a private language school. However, a massive nationwide campaign against institutional competition is not something that can be initiated by one individual or by schools in one area. This is truly a field