My recent interview (in English) on El Punt Avui TV. Talking about how I started out in the language teaching business, some of what’s happened over the past 40 years and what may happen in the future.
How much should a language course cost? Needless to say the answer will depend on all sorts of variables: how long the course lasts; whether it is face-to-face, online, or a mixture of the two; where it takes place (country, region, town/city, location); whether the teacher is professionally qualified; how many students are in the class; whether the course is a standard ‘general’ language course or something more specialised; whether materials are included in the course fee; and so on.
For the sake of argument, let’s assume we’re talking about a general, ten-week semi-intensive course which consists of 100 hours’ face-to-face tuition, given by a professional language teacher in a private language school located in the centre of a mid-size town in the south of Europe, with a maximum of 10 students in the class. How much might a course of this description cost?
An easy response would be to say: ‘as much as a typical student is prepared to pay’. But what’s a typical student? Someone who is paying for her own course or having it paid for her by her company or parents? Someone who desperately needs to take a course to pass an exam? Or someone who is studying for no obvious reason?
Again for the sake of argument, let’s assume our typical student is a young adult who wants to improve her career prospects and her ability to communicate on her travels, but doesn’t have any urgent need to demonstrate her skills and is paying for her own course. How much could she be asked to pay for the course outlined above?
Is there any way of calculating a ‘Goldilocks price’ that is not too cheap (so the school ends up losing income unnecessarily) or too expensive (so that the student is frightened away)? This ‘just right’ price should help the school generate the sort of margin it needs to provide its services now and in the future, while giving the student the sensation that she’s getting good value for money. So what? More than 500 but less than 1,500 euros? That still leaves quite a wide range of possibilities to choose from.
There are dozens of pricing strategies designed to help companies determine the price of their goods or services (see for example http://bit.ly/2owp5Wz). A couple of the most familiar are cost-plus pricing and value-based pricing.
Cost-plus pricing is relatively straightforward: first work out your direct costs (the cost of the teacher, primarily, but also such items such as photocopies for students, course-specific advertising campaigns, etc.) and divide this by the average number of students per group. Let’s assume these direct costs come to 25 euros per hour and the average number of students per group is 5. Direct costs per student hour are therefore 5 euros. Next calculate your overheads or indirect costs (which means everything that isn’t a direct cost, such as your rent, lighting, administrative staff costs, etc.) and divide this by the total number of student hours you have over a given period (could be a month, a term, or a year). Let’s assume this adds another 3 euros to the cost per student hour, making 8 euros in total. Adding a gross margin of 25% will put 2 euros onto the total cost, giving a selling price of 10 euros per hour, or 1,000 euros for the 100-hour course. Sound reasonable?
The answer to this question will most probably be: that depends how much other schools in the same location are charging for a similar course. If a local competitor has lower salary costs and/or lower overheads and/or is happy to work with a lower margin, they could be offering a very similar service for as little as 600 euros. That’s a whopping 40% less.
So should we base our prices on what our competitors are charging? Well, we should certainly know what the going market rate is. But the danger of basing our pricing on what the guys down the road are doing is that it can easily lead to a price war, or a race to the bottom, leaving margins wafer thin or non-existent, and staff feeling underpaid, unappreciated and unhappy.
An alternative to a cost-plus pricing strategy is value-based pricing. This is based on the idea that the client (student) will pay in relation to the value she obtains from the service (course) she is receiving. In the case of a 100-hour language course, the primary value will most commonly be defined in terms of how much progress she has made developing her language learning skills. That can be measured in broad terms by progress tests and/or continuous assessment, but it will probably also involve ensuring our student feels that she’s made significant progress.
Other factors that contribute value will be less obvious but may be just as important: Is she enjoying the course and enjoying interacting with her teacher and the other students? Is the learning environment clean and comfortable? Does the timetable fit easily into her other commitments? Are the reception staff efficient and welcoming? Is the school easy to get to, and/or easy to park near? Does the school offer extra-curricular services and activities such as social events or access to digital study materials outside classroom times?
The value of all these additional factors can also be measured to an extent, but in many instances it could boil down to individual attitudes or preferences. So objectifying all these values can be tricky, never mind attaching a price to them.
As we all know, perceived value can also be heavily influenced by brand recognition and advertising. Car A may be objectively better (more fuel-efficient, more reliable, more spacious, faster …) than car B, but if car B is branded Mercedes or Range Rover (for example) it is likely to command a premium price.
Building brand value is easier said than done. It requires both delivering services that are perceived to be better than average (in some significant way) and communicating these differentiating values clearly and effectively. What’s more both delivery and communication usually need to happen over a prolonged period of time. But if we’re successful at enhancing the perceived value of our brand, the price of our sample course could be closer to 1,500 than to 500 euros. And no-one will complain.
Back in 2007, on my way home from the ICEF workshop in Berlin, I was trying to think of new ways that we could make IH Barcelona stand out from the ever-increasing crowd of private language schools offering Intensive Spanish courses in our fair city. Having spent the previous few days in environmentally conscious Berlin, an idea occurred to me: we could perhaps become the world’s first accredited environmentally friendly language school. This could have three real benefits:
- It could become a useful marketing tool, helping us attract environmentally conscious students from other parts of the world.
- It might help us lower some costs, by cutting back on the amount of paper, water and energy we use.
- It would lessen the impact our activities have on the environment and, as the slogan says, every little helps.
Having spent some time researching options, we eventually decided to go for EMAS which is the European Union’s Eco Management and Audit Scheme. To summarise what this involves:
- We have to publish an Environment Policy which specifies our aims and approach
- We have to set ourselves targets to reduce the consumption of energy, water, paper and so on.
- We have to recycle everything that can be recycled
- We have to ensure that we avoid purchasing products that can be damaging to the environment (e.g. cleaning materials) and replace them with products that are as benign as possible
- We have to keep detailed records of all of the above and undergo two external audits each year.
We almost certainly were the first language school in Spain (if not the world) to achieve EMAS accreditation and we have now been on the register for 8 years.
So have the benefits we anticipated from adopting this policy materialised? Yes and no.
- Our Eco-friendly policy probably hasn’t as much impact as a marketing tool as we originally hoped, although these things are notoriously difficult to gauge. One corporate client once told us that they had chosen us to be their provider as they were also on the EMAS register. But that’s just one case of our environmental policy having tipped the buyer’s decision in our favour. Has this policy influenced other clients in some shape or form? Our surveys suggest it might have, but not to any great extent.
- While we’ve clearly lowered the amount of money we spend on utilities and consumables, we’ve had to spend rather more money than we’ve saved. Primarily because we’ve had to employ a part-time (but extremely enthusiastic) Environment Officer to oversee and manage the whole process. Secondly because the cost of the external audits isn’t exactly cheap.
- The area where the policy has probably been most successful has been on lessening our impact on the environment. We have reduced the amount of energy we use in relation to student numbers consistently, year on year. The same with water and paper. We still have room for improvement – we still can’t persuade all our staff and students to always switch the lights off when they leave a room; and the amount of paper we use still seems excessive to me. But there is definitely a greater awareness of these issues in the school and while there will always be a number of cynics, peer pressure to consider how our behaviour impacts the environment increases each and every year.
So has it all been worth it? On balance I believe it has. We’re not about to stop global warming on our own, but at the very least we’re able to help raise awareness and we’re seriously trying to set a good example.
As our slogan says “The Earth is our International House”.
For more information on EMAS: http://ec.europa.eu/environment/emas/index_en.htm
To see our environment policy: http://www.ihes.com/bcn/medioamb.html
At IATEFL 2016 Silvana Richardson gave an impassioned presentation which generated a great deal of discussion and support, both at the conference and on social media. She repeated her plenary at the ELT conference organised by IH Barcelona earlier this year and once again she had the audience on its feet.
Her argument, in summary, is that it is time to stop treating English teachers who are non-native speakers of the language as second class citizens. English language teaching institutions shouldn’t discriminate between native and non-native speakers of English when they hire teachers; rather they should simply hire people on their ability to teach the language effectively.
Silvana uses a number of arguments to support her case. One of these is that bilingual or multilingual non-native speakers of English are often more effective classroom teachers than monolingual native English speakers as, having gone through the process of learning English themselves, they are often better able to anticipate the many pitfalls that students are likely to find themselves stuck in. No-one in the profession would take issue with that.
Silvana also claims that a familiar argument, that it is the market that demands native English speakers, is false. She attempts to explode this myth (as she sees it) by providing data from a number of studies conducted in different parts of the world. Two of these studies were taken from SE Asia where, according to the data referenced, a majority of students actively prefer non-native speakers (understood to be speakers of the students’ own language) as teachers. Anyone familiar with this part of the world won’t be entirely surprised by this finding. Grammar translation is still a common teaching method in many classrooms in the region and that requires a thorough knowledge of the students’ mother tongue – something most native English speakers lack. The fear of losing face is also a cultural constant in this part of the world and this fear is often compounded in the presence of foreigners.
But does the argument hold elsewhere? The only data Silvana uses from Spain to reinforce her thesis (that the market doesn’t care) is taken from a study conducted at a university in the Basque region where around 50% of the 70 students surveyed stated they didn’t especially value native English speakers. But university students don’t get to choose their teachers in any case. Could this lack of choice have influenced the result?
The ‘alternative fact’ (to coin a current phrase) is that a large proportion of students studying at private language schools in Spain (i.e. those people who do have a choice where to study) indicate a very clear preference for having native English speakers as teachers. A recent survey conducted with past and present students at IH Barcelona bears this out.
The survey asked students to evaluate 10 qualities an English language teacher might have on a scale of 0 to 10. Some of the qualities students were asked to evaluate were:
- A friendly and caring nature
- Knowledge of the students’ language
The survey was completed online by 408 students.
The teacher quality that scored the highest percentage of responses (57,7%) with the maximum score of 10 was ‘Gives interesting classes’. ‘Native speaker’ was the quality that scored the third highest number of maximums, with 52,25% of respondents awarding this quality a top score of 10. But if we add the number of respondents scoring ‘Native speaker’ with an 8, 9, or 10 on the scale, it comes to a massive 83,4% (see graph). This out-performs nearly all the other qualities listed in the survey including even ‘Experience’ (76,1%).
So, whether we like it or not, ‘native speaker’ is evidently a quality that students in this particular market value highly. I think we can safely say that it is therefore very likely to be one of the factors that influences these students when they are evaluating their options and deciding where to study.
Having provided data that suggests the market doesn’t really care, Silvana seems prepared to admit that some people might care after all, as she then goes on to an ask a very pertinent question: Is the customer always right? In other words, should we as school owners and directors, go along with our students’ preferences for native speakers or “challenge them, rather than pander to them”?
Let’s state the obvious: in a highly competitive market, the providers of any service would be crazy to ignore the strongly felt preferences of their potential clients. Such an approach would be tantamount to commercial suicide.
This is precisely the situation that the owners and directors of private language schools in Spain find themselves in. Whether we agree with our clients’ perceptions or not, a large majority of those people prepared to pay to improve their English language skills (or their children’s language skills) evidently value teachers who are native English speakers very highly. Does this mean that we can’t or won’t employ non-native speakers as teachers? No, we can, we do and we will. But it does mean that there is a clear and obvious risk in doing so; a risk that is ignored by Silvana’s claims that
a) the market is essentially agnostic and
b) those students that do prefer native speakers should have their views challenged.
‘Discrimination’ is an ugly term that no-one wants to be associated with. A majority of the private language schools in Spain (including all the schools that I’m involved with personally) pride themselves on being companies that will not discriminate on gender, race, sexual preferences, age, weight, height, or anything else. But we are working in the world as is, not as we’d like it, and it will take time to wean our students away from the idea that ‘native speaker’ somehow equals ‘better value teacher’. The risks inherent in challenging this widely held view too quickly or too openly – especially in the current market conditions – are simply too great.
One final thought: this debate, which is a very lively one, seems to centre almost exclusively on native or non-native teachers of English. Presumably this reflects the global demand for English and the huge numbers of English teachers, both native and non-native speakers, needed to address it. The debate feels rather different if we think about teachers of other languages. Imagine a student coming to Spain to take an intensive Spanish course, for example. Would such a student be surprised and possibly even disappointed if her teacher turned out not to be a native speaker of Spanish? I think perhaps she would.
A video recording of Silvana’s plenary at IATEFL can be found here: http://bit.ly/1XxfxDH
The EFL industry in Spain enjoyed a mini boom during the early years of the global economic crisis as many adult students rushed to improve their English language skills, either to get themselves back into the job market, or else in an attempt to hang on the job they had. As we reached the new decade, the boom slowed down and then started to tail-off. But no-one expected the sudden and significant drop in adult student numbers that hit the industry at the start of the current academic year.
The drop wasn’t school, city, or even region specific; it was the same story all over Spain. And the numbers were eye-watering. Depending who you talk to (and/or who you believe) adult student numbers fell by between 10-20%. Enough to make any school owner or manager wince.
What happened? Where did all these students go? Well, as is normally the case, there is no one, simple answer. There has been a slight upturn in in-company teaching, so it may be that some students, who were previously paying for their own courses in our schools, are now studying in their company (if they’re fortunate to have a job in the first place; Spanish unemployment is still well over 20%.)
The standard of English teaching in main-stream education is also getting better, slowly, so it may be that there are more school leavers who have achieved a basic level of communicative competence.
Some adult students – especially the younger ones – may also have decided to switch from a traditional, bricks and mortar language school to a Web-based classroom.
My own theory is that it’s the free movement of labour in the European Union which is having the greatest effect on our market. In other words, as there so few jobs available in Spain, hundreds of thousands of young adults – many of whom may previously have been our students – have simply upped sticks and gone abroad to find work.
A recent survey conducted in the UK indicates that migrants from Spain rose to 137,000 in 2015 (up from 63,000 in 2011). Most of them are probably working in relatively unskilled jobs in hotels, bars and restaurants, but at least they’re working – and they’re improving their English language skills as they go.
A similar number probably emigrated to other countries in the north of Europe and another significant number emigrated to Latin America. Add up all these emigrants and we could be looking at a total of well over 300,000 migrants – just in 2015.
On a recent trip to Oxford I met a young Spanish guy, working in a hotel, who had previously been a student at our school in Barcelona. He’s a typical example. Will he ever move back to Spain, I asked him? Perhaps, in the future, he said, but only if the situation in Spain changes and he can find a decent job. His new fluency in English, learnt by living and working in Oxford, might just help him with that.
So where does that leave Spanish language schools? Will adult students come back to our schools in the same numbers as before? Probably not. But that doesn’t mean we have to give up on this market. If adult students won’t come to us, we can use the Internet to take our services to them. Even those living and working abroad.
Civil war breaks out in Syria (for all sorts of reasons) causing thousands of casualties, mass migration and unimaginable hardship. A group of fanatics who claim to be inspired by the Koran, but who seem to be motivated primarily by their own blood lust, attempt to fill part of the power vacuum and create “so-called Islamic state”. A number of countries, including the USA, France, Russia and Iran, form an unlikely and largely uncoordinated coalition, which aims to obliterate the fanatics. This provokes fanatics elsewhere to blow up a Russian plane full of tourists and cause mayhem and mass murder in Paris. So far, so horribly familiar.
So what has this got to do with the language teaching business? Well, as a direct consequence of the horrendous events outlined above, a number of students from both France and Russia have written to us saying they are very sorry but they have been advised to postpone or cancel their courses. In some cases, whole groups of students have called off their trips.
This is collateral damage of a very mild kind and in no way compares to the tragic events going on elsewhere. But it does go to show how we are all hostages to fortune. As managers of a small, far-away business, there is absolutely nothing we can do to prevent geo-political turmoil, any more than language schools in the north of England and Ireland could prevent a volcano in Iceland disrupting their business a few years ago.
Of course it’s not just language teaching companies that are taking a hit; any business that involves international travel will be feeling the effects, some much more than we are. Just imagine how many empty hotel rooms there must be in Sharm El-Sheik at the moment.
Disruption can of course be triggered by events closer to home as well. Business can be blown off course by local political uncertainties, changes to legislation, technological innovation and a whole host of economic tremors including inflation, deflation, currency fluctuations, interest rate hikes, unemployment, sovereign debt levels… the list is almost endless.
So are we just butterflies in a storm, being blasted whichever way the wind blows hardest? Is there anything we can do to prepare for outrageous fortune’s slings and arrows and plan our way out of trouble?
Many large organisations engage in ‘what-if’ planning, or PEST analysis, but I’m not sure that many language schools do. Perhaps we should give it some thought.
Here are a couple of links to help get you started:
In Spain (my adopted home) the regional governments operate a network of Official Language Schools (EOIs) which offer heavily subsidised language courses to the local adult population. (In Catalonia, where I live, the minimum age required to attend such a course is 16, although students aged 14 or older can also sign up to study a language they’re not taking at school.)
Course fees are significantly lower than they would be in the private sector. For example a145-hour course at an EOI in Barcelona currently costs around 300 €. A comparable course in the private sector would cost well over 1,000 €.
Class sizes in EOIs are generally quite large – often over 20 students per group – at least for the most popular languages such as English, French or German. This compares to a standard maximum group size of around 10-12 in the private sector.
Despite the larger group size, EOI courses are heavily subsidised by the tax payer. As an EOI website professes (in slightly clunky English): the courses have a much higher actual cost than what students pay …
If you want to study a less popular language (Portuguese, Korean, …) you’re pretty much guaranteed a place on a course; the problem you may face is that there are not enough people who want to study your chosen language at your level.
However, if you are a new student and want to study one of the ‘demand high’ languages, you put your name down and then there’s a random drawer to select applicants to fill the places available. If your name is picked out, you get a place on a course; if you’re not picked, you’re not admitted, although you may be able to put your name on a waiting list, in case there are any dropouts.
You might expect me, as CEO of a group of private (unsubsidised) language schools, to object vigorously to this use of tax payers’ money. Not quite.
I’m all in favour of the public sector offering courses in languages that the private sector can’t readily provide (Portuguese, Korean, …). I’m also in favour of the public sector offering subsidised courses in ‘demand high’ languages such as English, French and German to those people who simply couldn’t afford to study at a private school e.g. the long-term unemployed, or people belonging to a family with an income of less than X thousand Euros a year.
But is seems a little odd that everyone is eligible to take one of these subsidised courses.
The system is fair in that it admits all comers. It’s unfair in that it often selects those people who could afford to pay for a course at a private language school and consequently leaves out those people who can’t.
What do you think? Should the state provide subsidised language courses to anyone who wants one, irrespective of their economic circumstances? Is there a similar network of public sector language schools in your country? If so, how do these operate?
All comments welcome.