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POST: QA's Price Discrimination Strategy - Are you paying too much?

20 January 2016


General
Why Pay QA?

QA's Price Discrimination Strategy - Are you paying too much?

Updated 15/3/2017

QA - the UK's largest training provider and 'preferred supplier' for many organisations has what might be described as a 'Jekyll and Hyde' approach to their customers.

Here's just two examples for EXACTLY the same QA course, on the same date and at the same location!

View the Video - Includes QA's Staff Describing their Perks!

 

Compare QA and Focus On Training Pricing for the Exact Same Event!

Website PriceCourse Location Date
QA£2231 Installing and Configuring Windows 10 Birmingham - Hill Street, B5 4UA 17/07/2017
Focus On Training (QA Owned*) £1495 - 33% less!Installing and Configuring Windows 10 Birmingham - Hill Street, B5 4UA17/07/2017
QA£3345 VMware vSphere 6.5: Install, Configure, Manage International House, London, E1W 1UN 10/07/2017
Focus On Training (QA Owned*) £2395 - 28% less!VMware vSphere 6.5: Install, Configure, Manage International House, London, E1W 1UN10/07/2017

Prices shown on respective websites 15/3/2017.

Example Price Change History on QA Main Website

Here's an example for Installing and Configuring Windows 10. There's been over a 6% price rise in under 8 months on the main QA site while Focus on Training remained constant for the example courses. Other prices changed with a different pattern - QA's main site generally showing a greater increase.

Sample DatePrice
4/11/2015£1980
21/01/2016£2010
30/6/2016£2101
15/3/2017£2213

You will find literally hundreds of equivalent listings for:

  • PRINCE2®
  • Microsoft
  • VMware and many others!

Its surprising to find that QA are selling their courses at two vastly different prices for exactly the same product on the same dates and at the same locations!

*QA openly state that they own Focus on Training and both companies are registered to the same address. The disparity in pricing doesn't appear to be down to marketing practices such as 'Early Bird' or 'Late Deal' discounts as the price differences run consistently over many months. So the conclusion must be they have a two tier approach which could be viewed rather cynically and is contrary to the statements on the 'Our Values' and other sections of their website.

This pricing strategy, where the same product is sold at differing prices, is often referred to as 'Price Discrimination'. Usually they'd be a clear differentiator such as reduced rates for students or pensioners but in this case it appears to be based purely on prospective customer's web search habits and savviness - a vague demographic at best and potentially very costly to busy HR departments sourcing training!

Preferred Supplier Contracts

Many organisations, including local government, have negotiated 'preferred supplier' agreements with QA based on their reputation and reach. A reasonable public question is what pricing model these have been negotiated in line with and hence whether value for money is being achieved?

Another aspect to this is that lower volume customers, paying the higher of QA's prices, may well be subsidising some otherwise non-viable preferred supplier contracts!

This would allow QA to exercise control over purchasing by major customers including local government.

Motivation - Substantial Financial Rewards?

The UK training market has relatively few independent providers remaining and virtually all the major players are now at least part owned by overseas investors. Once the fixed costs of an event have been met adding further attendees greatly increases the potential profit. Here's an example:

Example Classroom Revenue - £32,160!

16 attendees on a 5 day Microsoft course at QA's advertised price the revenue for a single event will be:

  • £32,160 exclusive of VAT with a very high percentage of profit

There's so much revenue in practice that QA actually negotiated a £50 million refinancing package - not something that can easily be done without evidence of substantial potential rewards!

Read more...

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