From Profession to Business: 3 things I learned about customers

I’ve had quite a checkered history of entrepreneurialism, and it wasn’t till I came to Taiwan that I discovered that part of my soul. Although it was in my previous professional field, ESL teaching, it made no difference. I found myself contracting out as a tutor, advising students, editing, and a whole bunch more that came with the territory.

First Steps

Eventually, I started teaching in my home in a small home classroom I set up in my first house. Of course, the class fell apart because at the end of the renewal period, most of the clients couldn’t understand what I was doing or why.

Shortly after, we moved house to a new location, and the home classroom became quite an event with students on almost a daily basis. It was a difficult time: I had three jobs, and moved between each of them, so I was unable to promote the home school properly. Eventually, my ‘full-time’ jobs overtook the time I could devote to my home school. I still taught private students occasionally, though.

In Business

It was during the early part of that time that I also became involved in a teaching company called Savant, that provided ESL instruction to corporate clients in Taiwan. A friend, Tyler Rainsbury, set up (and eventually closed) the corporation and we had quite a few successful clients; but competition was stiff, and we couldn’t find our way forward, even though we had great teachers and good materials. Clients often focused on the bottom line issues and overlooked the other important educational goals.

Then in 2000, we started our first business with actual classrooms before moving to our present location. And business grew quickly over those eight years, outpacing the performance of all my previous businesses in scale, reputation and stability.

We recruited students in Elementary Schools in our area, and quickly became one of the best known schools in the area providing after-school ESL classes to students 6 to 16 years of age. With quality materials, instruction and care, our students have prospered and gone on to some of the best schools, colleges and universities in Taiwan.

A common thread: the customer needs development

There is a common thread running through all of these businesses, and their respective success/failures. We’ve struggled to cultivate our customers in each of the businesses we’ve run; it doesn’t matter whether the business is corporate, personal, adult or child-related.

In the first home school I ran, it was difficult to put out flyers, make contacts, get phone numbers, and do sales because my language skills were insufficient; the market was quite limited; and customers didn’t understand what they were buying or why.

In the second business, customers primarily cared about the bottom line costs; the impact on their business; their cost structure; and regularly played other ESL type consultances off against each other to keep costs down. We failed, despite our best efforts, to differentiate our service from the larger competitors around us.

In the current business, our biggest problem is the scale of our market. We are perhaps described as a big fish in a small pond. There are a number of competitors here, too. But none of them is a direct competitor for our business. Each of them chips away at a corner of our own market: the younger end is chased by the kindergartens, the older by the cramschools, the in-between by the all-in-one schools (who tutor Chinese, English, and math).

To successfully cultivate your customers, you need a clear plan to carry out: and this represents my best thinking on the subject.

1. Collate, collect and analyse your information

There is no way that you can understand your clients and your potential market without knowing about your clients. So you need to keep records of your clients’ personal information and contact information.

Build mailing lists, email lists, contact lists, and make the information available to your staff so that you can reach out when you need to. Whenever you need to promote something, this information will come in very handy, and save you a lot of time when you need to distribute flyers or disseminate news about your new product or service.

2. Promote, promote, promote

You need to promote your business as best you can in as many ways as you have time to do. While word of mouth is the best way to succeed as it pre-qualifies your customers, you cannot rely on it alone.

Set up your promotion campaign in whatever way you like; when you have a successful promotional campaign, rinse and repeat. When it fails, examine the reasons and move on. You still succeeded to get your name out in front of people, and they will call or drop in. There is no real failure in promotion, even if you didn’t get any sales at all. You still got a chance to talk to people.

We use flyers, posters, websites, email lists, facebook and much more to get information across; but there are still lots of other ways to advertise.

3. Educate your customers

It’s one thing that I consistently remind my colleagues: we need to educate our customers, no matter what they believe. Our ideas and practices are different from the typical ESL suppliers in the local market, and parents often forget that all schools are NOT the same, no matter what they think.

We benefit from this because we can ‘steal’ students from schools that use traditional methods of learning, by pointing out to parents that their little kids can barely say ‘hello’ even after 3 years of English class. Our method works: they can hear and see it for themselves.

But sometimes, parents think they can take their kid and put them back into a traditional classroom after a few years in our school, and they don’t realize that the time they spent teaching their child to speak and use English will be largely lost after just 6-9 months in a traditional classroom.

Educate your customers on the basis of what your product or service hopes to achieve, show and explain how it benefits them directly and why it’s worth what they pay. If necessary, do a direct comparison with the competition.

Those are three of the lessons I’ve learned from teaching and running my own business in Taiwan for the past four years. I’m sure there’s much more I could add. But I want to open the floor to hear your opinions, so do let me know what you think!

Learning from your mistakes… Turning your ship around (Part 1)

A tale of how (NOT) to run your business into the ground ! I was inspired by this story from Emonitized: Mistaking your Way To Success. In other words, “why I don’t post so much right now!” I’m too busy…

The article I mentioned lists some interesting ways to kill your business:

  • * Overexpansion.
  • * Poor capital structure.
  • * Overspending.
  • * Lack of reserve funds.
  • * Bad business location.
  • * Poor execution and internal controls.
  • * An inadequate business plan.
  • * Failure to change with the times.
  • * Ineffective marketing and self-promotion.
  • * Underestimating the competition.

PHTO0158We achieved an amazing 80% on that scale, once I tell you the story, you’ll understand. Perhaps then you’ll see what we did wrong… and why things are better now…

It’s always difficult to know which episode to start the tale. A brief introduction. We started running our business unofficially in 2000, we had very little idea of how the business would ‘take’, how much money we could or couldn’t earn, how to hire/fire, how to get/keep customers, etc… We were, the Chinese say, “Vegetable Birds”, Greenhorns through and through.

Given the success/failure rates in business in the first five or ten years, we have been remarkably successful: we’re still here after seven years, we’re still making a ‘little’ money, and we have created a thriving business. But it was in the seventh year that we faced our biggest challenge: falling enrolments, unmotivated staff, poor advertising/marketing, budgets out of control, and lousy management (yes, I mean we did a lousy job at managing things!).

The ESL Business in Taiwan
T100 1100o explain, The Language School Business in Taiwan is a fiercely competitive business with numerous chains and independents. Of course, we are the latter category. There are also a lot of crossover businesses, schools who provide other services that also provide language teaching. This can be done in a number of ways: after-school classes with English, kindergarten with English, English and other subjects, and general cram schools. Schools can also be categorized by the age of students, e.g. children and adults, kindergarten and children, children and teenagers. So there are a number of ways to look at the market. There are of course language schools that teach a number of languages, including Chinese, Japanese, and so on.

The Competition
PHTO0127Our school has focused on solely teaching English to children aged 6 to 16. We don’t mix our products with anything else. This has been both good and bad, but it makes us different from almost all of the schools in the immediate area who teach English, and from most of the schools in the surrounding area. We have achieved a good reputation for that subject teaching alone, BUT we sometimes lose students because we don’t offer after school care, or kindergarten, or whatever. Some parents really need the convenience of multi-service schools. However, we excel at preparing students for standard examinations in EFL (which are not compulsory), and we teach students to USE the language (you have no idea how rare that is in Taiwan!).

There are also challenging factors in that for schools, student retention rates are also critically important. Student semesters are generally only 3 months, and in many school attrition rates are attrociously high, often 50% of students leave after six months. Staff attrition rates are also a problem, as several of the schools I worked experienced staff turnover rates well in excess of 100% per year. The two factors are, if you know teaching, very much inter-related. In short, keeping the teachers happy helps you to retain students. When students stay, they learn well. Other students stay, too. Success in the language school rests on creating a virtuous cycle, not a vicious one.

Tuition Fees
With lots of competition, if you aren’t a first rank school in a large city, then pricing pressure restrains your upper price limits considerably. In addition, there are expectations for discounts on the prices from parents that you have to factor into your pricing scheme. Many schools try to charge extra fees for books and materials to cover their additional expenses, but in general this is not easy, either. Taiwanese customers tend to focus largely on the material costs of books and use very practical ways to measure books’ values.

32735A good example to illustrate: if a book has 100 pages, then it’s upper price tends to be restricted to about NT$200 or thereabouts (because that’s how much it costs to photocopy a page). Additional value can be extracted by adding color for the children, and CDs and so on. But in general, it can be very difficult to get purchasers to appreciate why a 50-page book costs more than a reasonable amount, almost regardless of what’s in the book.

Competitors: Local and International
There are, despite these problems, considerable opportunities in many markets for these kinds of schools. In fact, the presence of lots of competition indicates a strong desire for many of the services already being provided, and a willingness for parents to try new schools, as well as new services. Elementary schools and high schools are increasing slowly the quality of instruction within their communities, but the parents’ desires are far from even being recognised by the local education authorities. It’s that gap that allows so many schools to exist in the private sector.

making faces sean simonIn addition, from being a largely homegrown market with staples, like Hess Kindergartens, Joy Schools, Kojen, and a few others, increasingly foreign competitors are entering the marketplace, such as Shane Schools (from Japan), Geos (from Japan), PopularKids (from Singapore), etc.. Suffice to say, the international chains have few advantages in the local market, except perhaps deeper pockets than local companies. Local chains also operate in the same environment. All of them face the same typical problems. Therefore, in many areas of Taipei City and County, and around the island, local independent (or boutique) schools do well because they can compete very effectively on Quality of Service.

So, with the usual business concerns, pressures from competition, and pricing challenges from customers, we were quite surprised by our initial success in the local market where we are. We grew quickly year-on-year, and soon found ourselves with a popular little school in a well-defined market.

It’s that context that we will explore in the next posting as we explain how we achieved a failing grade of 80%! It’s been an interesting journey!… Bet you can’t wait…! Oh, and thanks to our wonderful students, Peter, my first class, some students and teachers at a recent demo, a naughty class! and some flowers!).

Getting Started in Publishing: DIY is the way to go!

For those of you enticed into the world of Marketing/selling teaching materials: self-publishing, I was very intrigued with the posting and the poster, because of his unusual methods for getting started. Instead of writing a book and contacting a publisher, and hoping that the publisher might even read his book, this author turned the tables on the publishing industry by writing up a book from material he already had, refining it, and selling hundreds of copies to his students!

The fact that he could sell to a steady market meant that he was able to demonstrate a marketable product that publishers could resell! They didn’t have to worry about if the product was marketable, it already was! Check out Rambling Rube’s post for that information. In fact, the whole thread is an interesting discussion, albeit focused on ESL, but the principles are absolutely correct.

Comments on publishing? What have you published?