Estee Katcoff, Professional GMAT-Crusher
Companies charge an arm and a leg for tutoring. When I was teaching at one national test prep company, the company charged $250 (and paid their tutors $60). But even Craigslisters charge upwards of $100/hour! So what is it about tutoring that makes it as expensive as a minor surgery?
Well, tutoring (like everything else) abides by the laws of supply and demand. There is a lot of demand for test prep, but qualified tutors are in short supply. There are several reasons why.
1. Limited hiring pool
By definition, only 1% of test-takers score in the 99th percentile. That means that of the 6,000 people who took the GRE in the state of Washington last year, only about 60 of them scored in the 99th percentile (assuming equal distribution nationally). It's difficult for companies to hire from such a narrow pool -- and thus they must offer compelling salaries.
2. Cost of training
Just because you did well on a test doesn't mean you know how to teach. PrepCorps actually turns away more than 50% of applicants -- because even though each applicant knows how to ace the test, he/she doesn't necessarily have the teaching skills or social prowess to adapt their explanations ON THE SPOT to their students' (sometimes subtle) reactions. Teaching is hard, man. And it's a skill that 99th percentile tutors don't always have.
3. Low capacity per tutor
Think about it. Tutoring services are in-demand mostly at night (read 5:30-10pm) and on weekends. Most tutors are only willing to give up 1-2 evenings per week, meaning that the capacity per tutor is only 2-3 students at a time.
4. Marketing costs MOOLAH!
When you pay a tutor, you're paying for his/her time -- but also for all the time spent on logistical tasks such as developing the curriculum, updating the website, reminding you to post a yelp review, etc. And all that stuff adds up! Especially the marketing. Google Ads for 'GMAT tutoring' are about $6 per click! And that comes out of your tutor's pocket.
So.. is there a way to cut costs?
PrepCorps is experimenting with different systems to see what happens. Many companies revert to online resources or pre-made videos to eliminate the short supply problem, but we know that there is still high demand for in-person tutoring.
Here are some questions that we'd like to ask:
1) Can an 85th percentile scorer be a more effective teacher than a 99th percentile scorer?
2) Can a test prep company hire one tutors who did well on math, but not verbal -- and pair him with a tutor who did well on verbal, but not math?
3) Is there a market for tutor-pools? ex. splitting costs by tutoring in groups of 2-3
4) Is there a way to recruit new students exclusively by word-of-mouth? Or is spending hundreds on Google ads the only answer?