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Personal Finance

Price product on service delivery

Price product on service delivery
Price product on service delivery. FILE PHOTO | NMG 

What a deadlock! On one hand, as one newspaper put it, “Parents are in revolt over the unrealistic costs associated with virtual education for children out of school.”

On the other hand, according to Kenya Private Schools Association CEO Peter Ndoro, “Unlike public schools we are not funded by the government. Online learning was not factored in the normal fees. Schools have expenses relating to electricity, digital devices and Internet. All these have to be costed and someone has to pay for it.”

There’s a huge lesson in selling here.

Schools want their customers (parents) to buy based on the need for the business (school) to meet its operational costs. Is this how customers buy, really? Do customers reason, “Hmm! Let me agree to the price because of the costs of the business? I think not. Buyers buy based on perceived value of service they consume.

Parents perceive a significant reduction in value in virtual teaching (the service). It is difficult to try and convince the customer that the value delivered online is the same as offline (in the classroom).

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As a retired teacher from an international school admitted, “Online learning cannot replace classroom learning entirely.” The dynamics are fundamentally different. For instance, class control is absent. Further, parental involvement heightens as that of the teacher diminishes. Students with different learning styles can be accommodated offline and not so, online. And these are a few of the soft issues that make parents question the value. Throw in hard issues as parents having to acquire internet-enabled devices (laptops being the most popular), continuous internet itself, the attendant costs of housing a child and the all this at a time when incomes are threatened, and value in the parents’ eyes further diminishes. When the business (seller) insists on fees remaining constant, it is in essence saying the value is the same. Is it really?

Any seller will admit that selling a product based on what it is, is an exercise in futility. Customers buy based on what the product does for them. The stylish lady buys the skirt because it is hip or accentuates her hip movement; not because it is black and short. The inability to sell “hip movement” as opposed to “black skirt” is the bane of many lost sales. The stance taken by the private schools is one of “buy for what the product is”. It Is a hard sell.

In my view, thinking as the business they are, private schools should do two things. From the back end engage their banks and staff to help them navigate this difficult situation with no end in sight. Or, review their offering. Some have adapted by opening up their services to any interested customer and not only bona fide students. From the front end, for those insisting on insignificant fees reduction, they can first demonstrate the value of the service to justify price instead of the other way around.

What do you think?

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