This is the third in a series of posts about the various types of tutoring and test preparation business models. I’ve already looked at the Marketplace and Broker models. The two remaining models are Hybrid and Full Service. Let’s first take a look at Full Service as Hybrid is a combination of Broker and Full Service models.
Full Service Model
Full Service tutoring and test preparation companies are the least vulnerable to competition from Marketplace companies. Full Service companies have a number of advantages over other models: greater customer loyalty, stronger referrals, and the ability to provide solutions that other models can’t. Like Marketplace and Broker models, Full Service companies match students with instructors. However, Full Service companies add significant value in a number of key ways.
At the heart of every Full Service model is one or more educational experts. These experts have keen insight into the types of instructors that will work best with students given the company’s educational philosophy. These companies often have much better training and development programs as well. Starting with higher quality instructors who receive better training presents a significant competitive advantage.
The educational expert will also oversee client intakes, leading to better assessment and prescribed corrective plans. By meeting directly with the parents and students and helping them to understand the student’s unique challenges, customers develop a greater sense of confidence in the company’s ability to solve their problems. Full Service administrators also have better oversight of ongoing work. This allows them to provide corrective actions that lead to better educational outcomes.
Clearly the Full Service model enjoys a competitive advantage in quality of service. They also enjoy greater per-session profit margins. By leveraging the educational expert’s ability to hire and develop instructors, Full Service centers can both pay their instructors less and charge their customers more. In contrast, Marketplace and Broker models, without the added value of an educational expert, have to charge the customer less and pay their instructors more.
Greater per-session profit does come with a cost, however. To provide this level of service, most Full Service companies have to maintain a physical location. This adds considerably to monthly overhead that must be made up with volume.
This brings us to the Hybrid model. The Hybrid model strives to replicate the level of service that Full Service companies provide, but without a physical location. We’ll take a look at this model in our next blog.