In the age of digital disruption, organisations in all industries have to re-evaluate how they do business. One area that is ripe for change is pricing. With customers now more price-sensitive and price-savvy than ever, organisations must be dynamic in setting prices. Higher education is no different.
To remain competitive and attract students, institutions must be willing to experiment with new pricing models. One such model is dynamic pricing. Dynamic pricing involves setting prices based on real-time demand and market conditions. This means that prices can fluctuate depending on several factors, such as the time of year or the number of students interested in a particular course.
There are many benefits to using dynamic pricing in higher education, which we will explore in this blog post. So, if you're a vice-chancellor or student experience consultant looking to improve your institution's pricing strategy, read on!
The Benefits of Dynamic Pricing
1. Avoid Drastic Price Changes
One benefit of dynamic pricing is that it helps avoid drastic price changes. This is because institutions can set a minimum and maximum price for each course or program. By doing so, they can ensure that they don't land an enrollment at the expense of their profit margin - or brand.
2. Offering Discounts to Alumni and Re-enrolments
Another advantage of dynamic pricing is that it allows institutions to offer discounts to loyal customers. This is because when prices drop, institutions can position the lower price as a promotional sale. In reality, it may simply result from dynamic pricing favouring a student due to their historical buying behaviours.
3. Attracting New Students
Finally, dynamic pricing also has the potential to attract new students. When prices are low, potential students who may have been priced out of a course or program may now be able to afford it. As a result, institutions can increase their intake and diversity without sacrificing quality or profitability.
4. Maintaining Healthy Profit Margins
While attracting new students and offering discounts to loyal ones is all well and good, institutions mustn't do so at the expense of their profit margins. Dynamic pricing allows institutions to adjust prices up or down as needed to maintain a healthy bottom line. This means that they can respond quickly and efficiently to changes in demand without jeopardising their financial stability - or damaging their reputation by appearing too expensive or too cheap.
As you can see, there are many benefits to using dynamic pricing in higher education. In an increasingly competitive marketplace, institutions must be willing to experiment with new pricing models to remain competitive and attract students. Dynamic pricing is one such model that offers numerous advantages, such as avoiding drastic price changes, offering discounts, attracting new students, and maintaining a healthy profit margin.
So, if you're looking for ways to improve your institution's pricing strategy, consider giving dynamic pricing a try!
You might just be surprised by the results.