Canadian Kim Morrison is the CEO of Grok Education Services, a Beijing and New York-based consultancy that ensures education clients can fulfil their ambitions in China. She talked to The PIE about doing business with China and the new multi-polar world of international education.
The PIE: How did Grok in China start?
KM: My experience is actually in the internet and telecoms industries, and I did business in Asia and China in 90s. I set up an internet company with my husband, we sold it to a Canadian telecoms provider, and went to China. I actually attended Beijing Culture and Language University. I fell in love with the country, there is something about it that I found incredibly charming and so exciting. This was 2003-2005.
The PIE: So China was still a new frontier then, pre-Olympics…
“There is something about China that I found incredibly charming and so exciting”
KM: Yes, and I started Grok as a way to keep my foot in China even as we moved to New York. We were incorporated in Beijing, hired some staff, and first serviced venture capitalists that we knew both in Australia and in the US, helping them understand the market for their portfolio businesses.
After two or three years the Canadian government started saying to me: ‘All these education providers who are coming into China need guidance and execution assistance – you should look at this, to see if you can provide commercial services. And by the way we need some research on the education market.’ So we started in 2007 and by 2009 we were almost wholly dedicated to the education market.
In late 2009 we started getting requests from institutions to represent them in the marketplace, so we began to hire one or more dedicated staff to work directly with each customer to pursue their agenda, and that is a primary aspect of our business right now.
The PIE: Oh really. I know of companies who do same in India…
KM: Like Sannam S4 [in India]? Grok is finalizing a partnership with Sannam S4 – for us to be able to deliver Indian services along our model to our customers, and enable them to deliver China-based services for their customers. We’ll be able to do pan-Asian international education engagement and provide consultation and services around strategy that take into account challenges and opportunities in both of those markets.
“By this time next year we’ll have a southeast Asian presence, probably in Malaysia”
The PIE: So essentially, you are providing a dovetailed approach?
KM: You can work with one vendor, develop a high-level strategic relationship with either Sannam S4 or Grok but via that strategic relationship you’ll receive the help that you need to execute strategy in the two major markets.
And by this time next year we’ll have a southeast Asian presence, probably in Malaysia so we’ll be able to truly do it across the whole region.
The PIE: Do you have many competitors in China?
KM: No not really. Some agents provide similar services in the ‘host-a-representative’ service but they don’t bring that historical focus on research, consultation and strategy that we do.
The PIE: Who are your main clients?
KM: We work primarily with Canadian institutions, also some American and Australians too. None from the UK yet – that is Sannam’s forte. Mainly higher education institutions although we work with a language school, Culture Works, which is a very good partner and earnest around their language education.
We also work with the US Dept of Agriculture Graduate School USA; a consortium of American colleges and the province of Manitoba. A typical customer would be a university or college but there are some atypical customers too.
The PIE: Can you give us an example of outcomes achieved via Grok?
KM: One university client had allowed their international marketing to go fallow. They started working with us in September 2011. They had very few international students. We hired a program officer for them and established a local presence in China in March – by September the following year, China delivered about 80 students to them. They were pretty happy.
“One of my interns here spent $25000 getting into NYU with an agent”
They are a really good example of ‘you get out what you put in’. They engaged very holistically, had their deans come to China several times, their president came to China six times. We are helping them achieve results not only on international student recruitment but also on partnerships. This isn’t about the money for them exactly but about internationalising the institution; yes they need the money from international recruitment to fund those activities.
The PIE: That is a pretty rapid result.
KM: It isn’t always as quick as that. Customers who don’t have name brand recognition, even with terrific market management support, are looking at a three-year investment timeframe before they see good ROI. It can take a while and it can take patience.
The PIE: How do you price your services?
KM: We are not an agent and we are really careful to not do anything on a per-head basis, because that’s the agent’s model. We help customers to support their agent networks, but we are not competing with the agent or acting in an agency capacity. [more>]
Customers pay us a monthly retainer, plus customers generally need to spend pretty significant amounts in terms of travel within China, printing, shipping etc. You want your programme officer out there, training agents, monitoring agents, working with high schools, there is a certain expense involved with national engagement. China is a big country.
“They are really going to contend with a world which is no longer centred on North America”
The PIE: How do you get ‘better’ rather than more students?
KM: By working with agents on a daily basis, being aware what is happening with each of the agents around which students they are recommending your institution to. Some agents have books and they organise the schools they represent in sections according to academic level.
There are things you can do to help your institution ‘move up the book to the next section’ so to speak.
The PIE: Do all agents work with that?
KM: I’m not sure if they all officially have a book, per se, but I would say they all unofficially do. It is part of the agents’ job to identify which school is suitable to a student’s academic achievement. Essentially, you have to earn your way ‘up the book’.
The PIE: And how do they evaluate a good school?
KM: It’s a combination of a lot of things. It’s ranking and reputation, of course, number one. Number two is how strong are their marketing materials? How well does that school articulate their merits to the target market in China? And then the third point is how well does that school support the agent by training regularly, attending fairs, etc.
“What are the odds that the agent is going to receive a call from an unhappy family?”
Fourth is how reliable is that school from an admissions, communications and on-boarding point of view. What are the odds that the agent is going to receive a call from an unhappy family?
The PIE: I can see why it may take some time to make inroads in the market.
KM: Agents prefer to recommend a school that the family has heard of. Agents don’t incur a lot of risk in promoting a school like that and it requires less intensive persuasion and time. In the absence of that they also look for a school that delivers on admissions promises.
Beyond that, the Chinese market really wants a foreign education because it will lead to a great job after they graduate.
Schools that are working to improve their ranking can help be more marketable to Chinese students by investing in international student services to improve post-graduation employment placement, as well as having a full range of co-op, internship and summer employment options.
The PIE: Do agents charge the family for their services?
KM: Yes and their reputation isn’t built primarily with institutions but rather built in the market, with families.
The PIE: How much would they charge?
KM: Anywhere from as low as US$2,000 to well, the sky’s the limit. One of my interns here spent US$25,000 getting into NYU with an agent.
The PIE: Do you think China will continue to be a big source country? It has its own plans to be an education hub…
“Schools can help be more marketable by investing in services to improve post-graduation employment placement”
KM: If I look at what’s happening in China, I don’t think the market for foreign study is going to level off. I think we’re going to see continued growth for several years.
However, at some point, as it develops economically India will surpass China, given they currently have such a huge population of youth.
The PIE: And where do Chinese students want to go? Is the US a favourite option?
KM: Yes, the US is largely the default education choice for Chinese families but I am seeing some evidence that that is wavering. I think it’s partly changing due to growing confidence among Chinese consumers, coupled with the perceived diminishing of the US.
Not only that, there are really sophisticated coordinated intentional marketing efforts on the part of the British Council, Australia and Canada to try and promote those countries as the destination of choice and I think the message is starting to get through.
The PIE: We touched on multi-directional flows of students earlier…
“it is very easy for us to not even notice what is happening between China and Africa, and China and India”
KM: I watch China from a lot of different points of view. I am frequently surprised by how quickly the world is flipping on its end. The flow of money and knowledge used to be in one direction. Increasingly the flows are multi-polar. China has a huge investment in Africa and an enormous investment in the development of African and South American resources. In a world where America has been the dominant superpower, it is very easy for us to not even notice what is happening between China and Africa, and China and India.
When we look at American students and Canadian students we consider, what is it going to take to succeed in their future world? Not now but 10 years from now. Their skills and comfort ‘out of market’ is going to be incredibly important for them. They are really going to contend with a world which is no longer centred on North America.
