This week, we interview Samuel Vetrak of StudentMarketing about his recent presentation, How to Make Profit in 2015, looking at trends in the ELT industry, first delivered at the ICEF Berlin 2014 conference.

In your presentation you highlighted that juniors represented an increasing share of business for UK schools – up from 30 per cent in 2009 to 41 per cent in 2013. Is this a trend that you witness worldwide? 

Most indications tell us this is not only the UK. This trend is present in most of the major English language destinations. The prominent trends that we witness are more junior, more summer and winter programmes and more pathways.

We have this data also from the source markets. For agents, the 19 and below market is more dynamic than the 19+ market. As English learning is more and more saturated and English proficiency higher and higher, students are going abroad earlier or for a specific purpose. Higher English proficiency on the planet also impacts length of study abroad, students stay and study for less.

You picked up on the increasing prominence of review sites in our industry. Is this likely to become more widespread?

In the last three years, we’ve seen more and more review sites. Not only because it is popular in other sectors, but also related to the maturing process of our industry. And people want to see a review, because choosing a study abroad programme is a difficult and often once-in-a-lifetime process. Authentic reviews help in this decision making process where it often concerns a considerable amount of spend, hence a lot of uncertainty.

Is this a threat to the agency model?

In an indirect way, agents have been doing this for several years anyway by requesting reviews and testimonials from clients and passing these on to potential new clients. Reviews are another way of passing information to clients. This is not diminishing the agent role; this is a new tool for agents to show that they are selling a good school.

We see a trend of more juniors, and parents don’t necessarily speak the language themselves so this is an additional reason to use agents. It is likely, therefore, that parents will need reviews of agents as well.

You mentioned GDS in the presentation, can you expand upon this?

GDS means Global Distribution System – software that enables a b2b booking platform. We already see some attempts with the software in the industry and although it is a new phenomenon, it is not so strong yet as to call it a trend.

The results of a comparative agent surveys from 2012 and 2014 showed promotions by agents at universities, high schools and languages schools were all increasingly prominent marketing techniques. Why do you think this is?

Agents need to go into the field and expend more effort and cost on reaching students. It is a reaction to smaller growth in the industry. Some agents are very good at online marketing, but the majority of customers come through face-to-face contact. Agents need to build trust and build the trust at an earlier stage. This is one of the possible reasons – these techniques are working to try to leverage meeting customers face-to-face.

You indicated a future of smaller growth in the ELT industry for schools in the presentation?

Statistics indicate there will be smaller growth than in the previous decade. In addition, commissions are increasing more than gross price, and therefore there is also new pressure on margins. Thanks to smaller growth and margins, there is higher competition. Growth is uneven in some destinations and only 16 out of 50 source markets grow in numbers. Also, there are troubles in some traditionally strong source markets like Russia and Ukraine, for example, and this creates additional pressure on margin.

Schools see possible solutions, e.g. in consolidation – it might be more efficient to buy schools and market two or three rather than one; or working with smaller agencies and get to more remote areas. Bigger brands have, therefore, an easier life than small brands. They are able to grow more rapidly, also thanks to ability to source external capital.

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