rcu, buckingham house, glovers court, preston, pr1 3ls tel 01772 885999 | fax 01772 887336 | rcu...
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RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Towards Smarter Fees Policies
Ensuring that providers maximise their incomefrom non-Government sources
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Overview of Key Issues
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
-20%
0%
20%
40%
60%
80%
100%
120%
16-19 FurtherEducation
19+ AdultResponsive
Apprenticeships Train to Gain 19+ FE EmployerOther
FE College Funding Changes
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Key Findings from Providers
• Colleges have increased course fees as a direct response to Government Policy – little evidence of course fees supporting an overall marketing strategy
• Significant variation in charging practices across the country
• Little evidence that fee rises in themselves have led to a decline in adult FE numbers
• Concern about the impact of moving towards a 50% fee assumption
• Colleges have had little financial incentive in the past to increase fees due to the potential loss in LSC income. Fee income has remained static or fallen.
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Findings from MORI survey of Individuals
• Most people felt that contributing towards the cost of learning was fair and appropriate
• There was widespread ignorance over the costs of learning and also the extent of public subsidy
• Individuals did not appear to have an expectation of saving or borrowing to meet the costs of FE learning
• Individuals were not always clear about the purpose and availability of fee remission
• Significant minority do not see learning as being for them.
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
How much would you be prepared to pay for a vocational course by previous FE experience?
0% 20% 40% 60% 80% 100%
Have AttendedFE
Have NotAttended FE
Don't know/Can'tremember
0-199
200-499
500+
Don't know
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Economic Returns on Qualifications (SSDA)
• Research studies consistently show that economic returns are highest for Level 3 and 4 qualifications.
• Relatively low return for NVQs particularly at lower levels
• Wide variation in returns by industrial sector• Wider benefits of learning to health & well-being
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
Not Known / NotSupplied
Entry Level Level 1 Level 2 Level 3 Level 4+
NVQ Level
Ave
rage
Fee
per
GLH
England – Average Fee Yield by Level (19+)ILR field A13 (UK/EU learners, eligible to pay fees)
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Key Factors Affecting Price Sensitivity
1. Vocational courses were less price sensitive than leisure courses. This is probably due to the perceived economic value of vocational courses to the individual and employer.
2. Repeat learners were more price sensitive than new learners. Large fee increases can be perceived as unfair by learners with knowledge of previous prices.
3. It is more difficult to increase prices where there are high levels of competition (public sector, private sector and other lifestyle activities)
4. Income level and ability to pay can affect price sensitivity, but it is not the most important factor.
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Smarter Fees Policy Toolkit
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Price SettingGovernment
Directive
CompetitorMatching
Course Costing +
Customer–Based. What will the Market Bear?
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Smarter Pricing
• Understanding the perceived value and price sensitivity of the product/service to your customers
• Increasing the perceived value of the product/service
• Promoting the value and benefits rather than cost
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Understanding the Perceived Value
• Use focus groups, questionnaires etc. to understand what your customers value in general and what they value about your products
• Is there scope for differential pricing?• Understand your competitors. What is your added
value?• Asses the likely price sensitivity of your courses• Model the possible impact of fee changes on income• Monitor the actual impact of any fee changes
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Entry Model
Mid-Market
Premium
Perceived Value
Perceived Price
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Increasing the Perceived Value
• Develop the curriculum and introduce new courses• Add value to existing courses e.g. trips and events,
help line, web resources, account manager• Change delivery or attendance patterns• Develop curriculum specialisms• Improve buildings and facilities• Introduce value added services e.g. car parking,
on-line enrolment, club membership• Reduce the perceived costs by monthly
instalments, direct debit etc.
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Promoting Value • Ensure the prospectus promotes the value and
benefits of learning as well as the cost • Determine and communicate the financial
benefits of a training programme to an employer• Articulate the benefits of premium priced
products and services• Where feasible develop brands that promote key
messages to a target audience and enable differential pricing.
RCU, Buckingham House, Glovers Court, Preston, PR1 3LS
Tel 01772 885999 | Fax 01772 887336 | RCU Ref. 07.206
Smarter Fees PoliciesMarch 2008
Questions• What are the implications of Government
funding being less secure in the future?• What actions have already been taken on
promoting value and smarter pricing?• What actions might need to be taken in
understanding, increasing and promoting value?
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