Understanding pricing in edutech

Published by Chris Ogilvie-Taylor, CEO, Marsden Grant Internati on 18 May 2016


At a recent conference, Chris Ogilvie-Taylor, CEO of Marsden Grant International was asked by a member of the audience about his product’s market positioning in the edutech provision sector. We thought his answer would interest you if you’re in the market for learning resources - 

“Thanks. Interesting question. You know, we’ve built a hardware and software package for educational use (CleverTouch LED) that’s the best we know how to make at the lowest possible end user pricing point. Now, you’d think that would be more than good enough for most people and for a lot it is but still there are buyers who scramble around looking for ever lower pricing and end up buying technology that by the time they’ve added all the features and functions and paid for the software upgrades and licenses that’s needed to make it all work properly, the end price they’re committed to pay is far greater than our standard price. So you may ask, why do they do this?

Well, I believe there’s a thought process amongst some buyers that tech is tech is tech and if they buy at the bottom market price they’re getting the same tech and resources as the more costly providers are asking a higher price for, but the lower provider is just making less money.

No, they’re not!

No one in the tech provision business who plans to be a long term contributor works on wafer thin margins. It’s not sustainable. What’s going on with the lower priced tech is that the manufacturers of the hardware and the developers of the software have cut corners. It’s the only way that they can cut pricing. So instead of using the quality raw materials that we use in CleverTouch to ensure the hardware lasts as long as schools need it to last, they buy inferior materials and components that look good on day one but very quickly become exhausted and faulty with the continual use that classroom tech is put to. And for the software, instead of the months and years that we put into development they just commission the bare minimum which again looks good at demo stage when no one in a demo ever sees the full software content. So when you take delivery you find that what you saw at the demo is everything that you’re getting. The software doesn’t go any deeper.

Now we could join this bandwagon. In partnership with our manufacturer, we could build CleverTouch on a shoe string and provide software that’s pretty much an empty cupboard. But we won’t. We won’t because that’s not the way we run our business and it’s not what we set out to do from the beginning. In fact, our response to any buyer who says he’s found cheaper is to wish them well and offer good luck. They’re not right for us and they have to be free to make their own judgment. The schools that buy CleverTouch and appreciate its resources are the ones that we are proud to call customers and to be associated with. And, by the way, in our category we are the lowest priced. So it’s not that we’re holding out for top dollar pricing. Far from it. We are lower cost by a considerable margin for what we provide. We just won’t go any lower or cut any corners.

Price always has a direct relationship with value. For good or bad. You probably have heard of people who bought a knock-off Louis Vuitton wallet for $20 which looked on purchase to be a real bargain but it turned out lasted no time at all before it cracked and split apart. But owners of the real LV wallets are counting their longevity in tens of years. You get what you pay for and edutech is no exception. Caveat emptor (buyer beware) is a very good rule to go by in this market.”

 

 


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