Discounts

In an ideal world you’d never have to give students a discount. They would all flock to your courses at full price. But discounts can form an integral part of your marketing strategy. Used well, they allow you to attract students who would not otherwise have enrolled at the full price. Used poorly, they represent income you give away to students who would have happily paid full price. In an ideal world, you will sell to each student at the maximum price they would have paid. This is called 'differential pricing' and one way to achieve it is through well-placed discounts. It allows you to set your full price to be higher than you would normally, and target those individuals who would be discouraged at that price point with special offers.

This approach has several benefits to some types of colleges: it positions you as a premium service, it creates an impression that you are looking after certain special customers and it allows you to discount more deeply for certain demographics knowing that higher income is coming from others. As an example of this approach look at the airline industry: it is very unlikely that the person sitting next to you paid the same for their seat as you did. An airline’s economic model is a lot like education; your product is completely perishable. Once the flight takes off or the class starts, those empty seats can never be sold.