The Race to the Bottom: Why Competing on Price is a Losing Game for Tuition Centres

March 3, 2025 | Read Online

Read time: 4 mins
Welcome back, folks! 🫡
This week’s Business Builder covers:

• 🎓 The Price War in the Tuition Industry

• 📉 Why Competing on Price is a Losing Game

• 🔥 How to Build a Tuition Centre That Commands Higher Fees

• 🤖 Growth Strategy of the Week

Let’s dive in… 👇

The Price War in Tuition Centres

This weekend, I visited Bolton Market—a proper old-school marketplace, bustling with energy and packed with stalls selling everything from fresh produce to knock-off designer clothes.

I went to buy some fruit. One stall had bananas for £1.50 a bunch. Two stalls down, another vendor was selling them for £1.20. Walk a little further, and someone else had them for just £1.

A textbook price war.

It reminded me of how many tuition centres compete solely on price—offering endless discounts, slashing fees, and undercutting the competition just to attract more students.

But just like in a market, there will always be someone willing to charge less.

The Problem with Competing on Price

At first glance, being the cheapest might seem like a good strategy—after all, parents love a bargain.

But here’s the problem:

• If your only advantage is price, you’re replaceable.

• The moment another tuition centre lowers their fees… you lose.

• Low prices mean lower profits, making it harder to invest in top-quality teaching, resources, and staff.

I’ve seen this happen time and time again in education businesses.

A Tale of Two Tuition Centres

Let me share a story about two tuition centre owners and how their pricing strategies shaped their success (or failure).

The Centre That Collapsed

The first owner was obsessed with being the cheapest. Every time a competitor lowered their fees, they panicked and did the same.

• Their margins shrank.

• They struggled to pay their best tutors competitive wages.

• Eventually, parents started complaining about the declining quality of lessons.

• The business collapsed because it couldn’t make enough profit to sustain itself.

The Centre That Thrived

The second owner took a different approach. Instead of competing on price, they built their tuition centre around high-quality teaching, personalised learning, and strong parent relationships.

Their fees were higher… but parents were happy to pay because they saw the value.

✅ The result? A thriving business with loyal students and long-term growth.

How to Escape the Race to the Bottom

If you want long-term success, you must break free from competing on price. Here’s how:

1️⃣ Differentiate Yourself – Find what makes your tuition centre unique. Do you offer specialist tutors? Small class sizes? Personalised progress tracking? 2️⃣ Communicate Value Clearly – Show parents why your tuition centre is worth the investment. Testimonials, results, and success stories can help. 3️⃣ Build a Brand, Not Just a Business – Parents don’t just buy lessons; they invest in trust, reputation, and quality education.

If your tuition centre is stuck in a price war, now is the time to rethink your strategy. Because the cheapest isn’t always the best. And businesses that win in the long run? They don’t compete on price. They compete on VALUE.

Next Step: Reflect & Take Action

Take a moment to reflect on your tuition centre:

• Are you competing on price, or are you standing out in a way that makes parents willing to pay more?

Try this:

Write down three things that make your tuition centre different from your competitors. If you can’t think of three, it’s time to start working on what sets you apart.

The strongest tuition centres don’t race to the bottom—they rise to the top.