OJ Kim is CEO and Executive Chairman and iae Edu Net and iae Global, the South Korea-based education agency powerhouse, which sends at least 6000 students around the world each year to study abroad. He talks to The PIE about how he has built up his empire, which now spans multiple countries.
The PIE: You got started in the industry by accident. When did you first get involved?
OJK: It was December 1986 and I was a student at the time. The guy who started the agency was my cousin’s husband and he wanted me to help him, especially for the Australian market. Over the next few years, he became the number one Australian education agency in Korea. I went back to university and when I came back from that, I had the chance to help him again. That is how it all started for me.
The PIE: How have you seen the agency industry evolve since you first started in Korea?
OJK: It has evolved massively over the past 20 years. In the beginning, there were issues of quality and integrity as some agents took advantage of the ‘green’ market and were involved in unethical activities – cheating both students and schools. There are still agents in the market doing this even today, so when I started my business, I really wanted to show the correct and honest way to do business. So for two years I just developed my business model and learnt about the industry.
“I still feel I haven’t been able to do business the way I really want to”
To be honest, even after 20 years of business and growing from 1 office in Gangnam to 32 in Korea as well as my 11 overseas branch offices and the iae GLOBAL network, even now I still feel I haven’t been able to do business the way I really want to.
The PIE: How do you see your agency as different to all the other agencies?
OJK: Training of counsellors is the first key difference. Many of the counselors that are picked up by agencies in Korea have studied overseas and have some knowledge or international understanding but that is not enough. The first thing I want from a counsellor is honesty and to give students genuine advice. If they don’t know something, they have to be honest with our clients and find the information to make sure the students make the right choice and are ok.
We never want to let the clients down and work hard to make sure we are seen as different from other agents, especially the few disreputable agents in the market. The issue of bad agents actually became so serious that the government intervened to create a negative impression of agents in the media.
The PIE: How so?
OJK: Apart from the few actual cases of dishonest behavior by education agents, the Korean government needed foreign currency, but if too many students go overseas, they use a huge amount of foreign currency. So the government created the concept of agents being too untrustworthy and slowed the market down.
The PIE: Really? To try and dissuade students from studying abroad?
OJK: Yes. So, I have really wanted to clean up the image of agents in the market for a long time and to present a cleaner and more trustworthy image to our clients. Part of our strategy was to open up the market by making information on study abroad easily available to our clients.
“In the past, agents really held all the power as they controlled the knowledge”
To do this I started to publish Korean language guide books which were given free of charge to our clients. This availability of information slowly cleaned up the market. Before that, students’ parents couldn’t speak English and all the information was written in English and even though they were sometimes cheated, the parents and students couldn’t report the offending agent to the school and once the schools found who to blame, it was usually too late.
The PIE: So the perception of agencies is much better….
OJK: The new generation of agents have followed the trend set by iae and also understand the power of negative publicity via social media. This is a major change for our industry – in the past, agents really held all the power as they controlled the knowledge, but with the internet and tools like Google translate, information is easy to get and understand.
Today it is service that separates agents.
The PIE: How many students do you place now? Out of Korea.
OJK: Well, there are two periods in iae’s history, one is before we developed our in-house CRM and IT system in 1999. In that time from 1992 to 99, we were still growing and had a relatively small volume but from 2000 on, we have averaged 6000 students a year (more in some peak years like 2007, 2008 and 2009). We don’t have accurate records pre-1999 as I was too busy just keeping the business afloat and keeping records wasn’t a priority.
The PIE: Its well known that Korea is one of the top three markets and I understand there’s a lot of sub-agencies in Korea. How many of the agents actually know the products they are selling?
OJK: I think these days, most of them are well prepared to sell the products and institutions they represent. Most of them started as counsellors in an existing agent. Many have probably been to an overseas to study English or another form of academic programme or they’ve been sent to schools on fam trips. The agents also bring lots of school marketing staff to their offices for staff training.
The PIE: And that’s the same for all agencies?
OJK: Yes, most agencies. When most agents start a new business, they go and see the schools and take photos as evidence to show to students and parents.
The PIE: How have you seen the market evolve in Korea, in terms of the countries the students like to study? Is the US still number one? The Philippines is written a lot as a popular destination with Koreans.
“Inside Asia, Japan and the Philippines are really the only two countries we work with at a significant level”
OJK: The Philippines have quite a different profile of student and meets the demand by the students seeking more affordable options due to the economic situation. But the traditional markets are the same. The US is number one and Canada is still fighting to maintain its number two position, with Australia at three and the UK four. Now the UK, Canada and Australia are fighting against each other for market share.
The PIE: Why are Canada and Australia so popular?
OJK: In the past if students couldn’t get a visa from the US embassy, they chose Canada as an alternative destination with an expectation to learn a North American accent in a country with a similar living environment to the US. In the past, Australia was chosen as a cheaper destination and the UK was not a priority for our students because of a perception of being very conservative and the fact it is so far away. Nowadays it’s changed a bit.
The PIE: You run franchise operations in other countries outside of Korea don’t you?
OJK: Yes. We have one direct sales office in each major country except the USA. So in Australia, the Sydney office is directly owned by us, and the rest of the offices in Melbourne, Brisbane, Perth and the Gold Coast are franchised. Auckland and London are owned as is the Toronto office while the Vancouver office is franchised.
The PIE: So do you think that is something you’ll roll out to more countries?
OJK: We are considering plans to open in the USA and also expand our offices in the UK. Apart from that, we are now looking at opening iae offices in some other major markets in Asia, the subcontinent and Middle East. Our model is to find suitable partners to an iae country partner and help them grow their business with us.
The PIE: And what about studying within Asia? There is lots of talk about intra-Asians study becoming more popular. Do you see that happening?
OJK: Yes, it’s expanded a lot but iae has made a conscious decision not work with all of them. Japan was the country where we worked very closely, but since China took over the market, Japan has continuously lost market share. More students are going to China to learn the Chinese language. [more>]
While China is a big market in student numbers going there to study, the fee structure and commission is actually not sufficient to warrant a serious effort by iae to promote it. There are many students going to Singapore and Malaysia, especially for high school, which we haven’t officially touched as yet but might in the future. Inside Asia, Japan and the Philippines are really the only two countries we work with at a significant level.
The PIE: There’s talk of how agents need to add value to ensure they stay indispensable in the distribution system. What are some example of how you add value to your clients?
OJK: The role of agents has changed a lot. In the 1980’s the agents were like application processors, they received the money from the clients, requested the application forms from the universities or colleges which were delivered by normal air mail and took about three months to arrive. Then they would fill out the application and submit the application on behalf of the students. If they were accepted, they helped the students get a visa.
“If institutions or education groups use their own direct local or expat staff, they struggle to maintain continuity”
Nowadays the agents are more like guardians or an insurance company for their students. The schools deliver the education and the agents are looking after the students, with very personalised services 24/7. In Korea or where we have offices in either source or destination countries, the students can be contacted by all of our service providers. We call it, “applicant service”.
The PIE: And do you expect them to pay a fee for that?
OJK: No.
The PIE: And you’re still working with basic commission or in Korea are you adding fees to that?
OJK: We don’t normally charge a service fee to the student and mainly run the business off the commission and support we get from institutions. However, there are some cases where we are providing a service to a student and the commission is too low to cover the actual costs (usually with US Community colleges that have very low fees and commissions) and in cases like this, we would charge the student a fee.
“In some cases (usually with US Community colleges) we would charge the student a fee”
This is made clear to them from the beginning and is transparent. They are paying for the service and support we provide and see value in paying for it. The fact that in most cases we don’t charge for our services means we receive word of mouth referrals and recommendations as students bring their friends to us. We have lots of good news created through word of mouth promotion.
The PIE: Do you see a trend towards direct bookings in Korea?
OJK: Yes. EF is the biggest company following this direction and some institutions and large groups are also doing both direct and indirect but they are not yet confident enough to do only direct sales. I don’t mind if schools do direct sales that much, as we truly believe that if they do move more and more into direct sales, they’ll actually lose money.
The big headache in running an agency in Korea is training and retaining good counsellors. To overcome this, iae developed an Education Planner (EP) training system for counsellors and we are also running our EP certification system.
The PIE: And your trainees take a test after about three months, don’t they?
OJK: Yeah, and it takes around a year on average (even in a big company like iae), for a counsellor to generate their first real income for the company. So we have to invest quite a lot of time, effort and money before counsellors start returning our investment in them.
“We have to invest quite a lot of time, effort and money before counsellors start returning our investment in them”
If institutions or education groups use their own direct local or expat staff, they struggle to maintain continuity, as these staff are notoriously fickle and move from company to company. So we don’t see it as a problem in the near future. Also, direct recruitment staff can only sell their own products – companies like iae have a huge number of institutions, programmes and destinations to promote and offer choice to a student.
The PIE: How many iae clients don’t visit a counsellor in person?
OJK: While the main source of enquires is via online and a lot of the interaction as well, we also know that this alone is not enough and to increase more enquiries, we hold our own fair every month. We also attend major college fairs in Korea two times a year.
Clients can directly access the iae system once they are registered as a member, after which they will be followed up in person almost immediately by our counselors…. that’s our system. So while most enquiries are linked to online, they end with one or more face- to-face encounters at our offices or education fairs.
The PIE: So everyone you send is counselled personally even though they start off by enquiring online?
OJK: All of them. This is a serious education and life decision that is a major investment for the family or individual student and not just for fun.
The PIE: Given that you’ve evolved from a very small company to a very large one, what do you like best about the job?
OJK: Of course making good money…..but that has not been that easy since the GFC [global financial crisis]!! All jokes aside, when the industry people say “I resent you, but I respect you” and competitor agents have said “I don’t like iae because you take a lot of business from us, but I respect you because you show real entrepreneurship in the agency business. You have really built up an enterprise. You are not an agent, you are a true corporation.” That makes me both proud and happy.
“‘You are not an agent, you are a true corporation’; That makes me both proud and happy”
Also, schools who have worked with us, know what sort of business we’ve been doing for them and appreciate our efforts. We respect each other. Finally, the fact that so many of our 10s of 1000s of past students still stay in contact with us or even end up working for us or tell their EPs how much iae has changed their lives for the better….that is something to be very proud and happy about. That is why our slogan is “Creating better futures since 1992”.
The PIE: And in terms of the commission you offer, are you in a position to negotiate?
OJK: As the largest agency in Korea and one of the largest in the world, we have a significant volume of long term and genuine students from diverse markets, so yes…we can negotiate deals with institutions. We actually have what we call Key Priority Institutions (KPIs) that have supported us for many years and therefore, we support them. I guess our business is similar to many others in that 80% of our students go to 20% of our contracted institutions. This is a win/win for both us and the institution, as we deliver far more than counseling to students.
It is important to note that since the Asian Financial Crisis and again after the GFC, our student clients are looking to get the best deal. In reality, we often have to offer discounts or incentives to get the student to sign with iae because they will visit a lot of other agents to negotiate the best price. They’ll say “I have this offer from this agent, I want to use you if you give me this discount”. So we allow the counselors a certain, limited range of discount.
