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Test-prep outcomes & acquisition cost
What it is
Coaching and test-preparation businesses are sold on selection records - how many students cleared competitive examinations. Marketing spend to acquire each student is high, and star faculty can leave and take enrolments with them
Fees and curriculum are regulated in formal education but largely unregulated in coaching
Impact on industries
- A strong selection record compounds - results attract students, whose results improve the record, which is a genuine reinforcing advantage
- Student acquisition cost is high and rises with competition, and each cohort must be re-acquired annually since students graduate out
- Faculty mobility is the structural weakness - the asset walks out of the building, and a departing teacher can take a batch with them
- Edtech funding retreat forces unit economics to work unaided, while NEP skilling and curriculum publishing add demand beyond test-prep