I’m not long back from a month on the road in the UK and Canada – an absolutely brilliant whirlwind of conversations across 6,800 kilometres (over 4,200 miles) – followed by a quick trip to the Gold Coast in Australia for The PIE Live, Asia-Pacific.

I met face to face with 47 senior decision-makers, many of them chief financial officers, pro-vice-chancellors and department heads, and spoke with dozens more higher ed specialists, at conferences and on campuses.

The theme that came up in almost every conversation was turmoil. Disruption, the tsunami that is AI, and the impossibility of knowing what’s going to happen next in terms of markets, university budgets, student mobility and visa policy – especially given the almost weekly about-faces from the man on Pennsylvania Avenue – dominate everyone’s thinking.

Most of these things are almost entirely outside the control of universities, but they’re taking up so much of the headspace of education decision-makers.

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🔓 Taking back the reins

It got me thinking about some of the issues and questions that are perhaps not getting as much attention because of the need to deal with all this turmoil. The issues universities CAN control. Specifically, issues where there’s real underlying potential to make significant gains that can offset some of the costs of defensive or rearguard actions to deal with ever-shifting global sands.

The biggest untapped potential for education providers to gain an advantage is, I think, in setting tuition fees and re-engineering scholarships.

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💰 A different approach to fee-setting

Fees and scholarships for international students are 100 per cent within the control of every university. Let me be a bit more specific. Of course, market forces (something you can’t control) dictate how much universities can charge and how much they need to offer in incentives, but being able to truly understand these market forces is how they can regain control of their destiny.

Yet in the face of all this disruption, the methods most universities still use to set fees and scholarships often remain a combination of backwards-looking analysis, fairly simple competitive plotting and a good dose of guesswork.

International education has been a huge global business for decades now. So, it continues to surprise me that such a large, successful, clever global industry still adheres to somewhat archaic methods of fee-setting.

In no other sector would this be acceptable.

Boards and shareholders want to see numbers, hard facts, rigorously interrogated consumer insights and a scientific analysis of the customer’s willingness to pay.

Yet universities around the world persist in using basic measures when making multimillion-dollar decisions that directly impact their bottom line.

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⏩ Forget the rearview mirror

Even those universities that now have a market insights team, who provide relevant and interesting data, base many of their forecasts on data gained by looking back at what’s already happened – not by looking forward. And certainly not by investigating with scientific rigour what students and parents in different markets are genuinely willing to pay for various aspects of their offer. The past used to be a solid guide, but no longer!

Would you get away with this in any other business? No.

Here are the kinds of questions a market-driven approach can investigate and find answers to – answers that are based on science, evidence and the future, rather than what’s been and gone:

• What would happen to demand if we moved from general discounts to targeted, merit-based scholarships?
• Which courses should we offer at our CBD campus (rather than our regional campus) if the goal is to optimise revenue?
• Does our current price point align with our brand and reputation for teaching quality?
• Are Indian students really as price sensitive as agents would have us believe? And would demand drop if our price increased but our ranking went up?

And the big one:

• Are we leaving money on the table – money that could be spent on improving our students’ experiences?

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🎯 Guesswork isn’t cutting it

Universities need to move from retrospective analysis to evidence-based modelling – from intuition to insight.

Here are four tips for how to begin the shift towards regaining revenue control:

• Survey prospective students, not current students. Current students can provide valuable insights on their ’post-purchase experience’ but surveying prospective students (and potentially their parents) gives a much better prediction of demand, sensitivity to changes in tuition fees and scholarships, and the perceived value of your brand.
• Consider tuition pricing levels not just in terms of attracting students but also retaining them beyond their first semester.
• If your research method just asks students what they like or need, without asking this in the context of where they are making trade-offs between different options, it will fail to get to the heart of their complex decision-making processes.
• If you’re a university decision-maker, you need to be prepared to go into bat for a methodology you know will make the annual fee-setting process more accurate and more aligned to what students really value. This requires a cultural shift as much as a strategic one. It’s not about abandoning academic values or commodifying education; it’s about being smarter, fairer and more resilient in how we fund and grow our institutions.

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🔍 Taking a scientific approach

At Edified we’ve developed a new kind of choice modelling research to help clients tackle this challenge.

Led by economists Dr Len Coote and Dr Edward Wei – two of Australia’s most experienced experts in the field – the research takes an approach that has been successfully used in other industries for decades, and adapts and applies it to the higher education sector.

The research helps universities scientifically measure willingness to pay, price elasticities for every field of study and to run demand scenarios.

In one case, a Group of Eight university in Australia was shown how to save millions by moving from general discounts to merit-based scholarships. Another university was able to determine which courses to offer at its newly established CBD campus to optimise demand and revenue, and maximise the return on the new campus investment. The true market value of its unique paid internship offering was another eye-opening insight. This gave the university’s executive the confidence to continue funding the program and extending the offer to more students.

In each case, asking prospective students from target source markets to make choices on the relative importance and their willingness to pay for various features of the university’s offer – at institution level and individual course level – revealed surprising results.

The research confirmed some assumptions, but many others were blown out of the water.

It’s no real surprise that students from China were generally less sensitive to changes in price than students from Vietnam, but the variation in price sensitivity between different courses was astounding.

Did you know that students are willing to pay more in tuition fees for the opportunity to attend CV and résumé writing workshops than for opportunities to attend annual career fairs or for introductions to alumni networks? Not that the latter aren’t important – they are – but when decisions need to be made about which activities to resource, knowing what matters most to students makes taking action so much easier.

Over more than four years of research, development and implementation in the field, we’ve confirmed a number of ways that many universities could be doing things differently, more rigorously, with more assured findings.

By capturing nuanced data from prospective students across markets, universities can make confident, evidence-based pricing decisions that strengthen both revenue and reputation.

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📈 A safer journey through turbulence

In this era of rising costs, intensifying competition and shifting demographics, pricing strategy is no longer just a finance issue – it is a strategic imperative.

The sectors that have mastered demand-based pricing are the ones thriving in complex, competitive environments.

By embracing demand-driven, evidence-based pricing, universities can:

• grow revenue sustainably
• improve enrolment yield
• allocate scholarships more equitably
• protect brand value in a volatile market.

It’s an opportunity for higher education to, finally, catch up.

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📩 Get in touch to see how Edified can help

Explore how Edified’s demand-driven pricing research can help your institution regain control of its revenue strategy: Revenue and Investment Optimisation or RIO.  If this sounds interesting, please get in touch.

Sharyn Martin

Senior Partner

sharyn@edified.com.au

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