I’m an agent… a secret agent.
No, not that kind. I’m a student recruitment agent – who is taking over the Secret IO mantle for a few weeks.
I may not have a licence to kill, but this column has inspired me to tell a few home truths about the “dark arts” of agency work.
For context, I am a senior manager at a small agency with some university partners in the UK and around the world.
So, where to start? I see no point in wasting time – we should jump straight to the main topic that dictates so much of the university-agent relationship. And that’s money.
I know a lot of people aren’t comfortable talking about sales in international education, but the reality is that, without payment, our work is impossible.
That is why the first question on every agent’s meeting agenda with a university partner is the financials – and that is why paying more commission does have an impact on student recruitment.
Money talks and there’s not much that happens with university agreements without agents sharing that knowledge with each other to increase revenue or reputation.
Got a special arrangement with an agency? I guarantee every major agent knows about it.
Buying a data package from another agent? Expect an email from me with a special offer on data.
Paying someone a higher percentage commission with a guaranteed number of students? You guessed it, we’ll be promising the same.
The universities I work with fall into three simple categories in their approach to commission levels.
The first category is the universities that want pure growth and offer a commission figure that can’t be ignored. This is a tactic to stay competitive at all costs and, contrary to popular belief, is not always initiated by us.
These universities know internally an agent might incentivise counsellors with a higher bonus for pushing Institution X over its competitors and that students will be reminded about those institutions a lot before making final decisions.
The second category is the universities that simply want to pitch themselves against their competitors and stay on a par with them.
The third category is the universities that see themselves as so elite that they pay less than what it costs to recruit the student in the first place, knowing their brand will add value to your portfolio.
Despite these categories, the common mistake most universities and agents make is to fixate on the percentage fee of commission as the main differentiator.
In my experience, looking at the tuition fee level itself and whether it’s gross or net after scholarships makes a bigger difference.
Russell Group universities traditionally pay a smaller percentage of commission, but their fees are much higher. This balances them out with the lower cost, higher percentage-paying institutions.
Payments on net fees are more common of course, but gross does exist and makes a big difference to the final payment – and believe me, that does get noticed!
The other thing to consider is how you recruit students and if you have to share commission with a third party.
B2B works on volume and much lower margins, while B2C traditionally handles fewer students but you get to keep all the commission earned.
The B2B agent world is extremely competitive and growing all the time. I get at least five emails a week from other agents wanting me to submit applications through them. For context, I can expect to get 8-10% basic commission from a master agent.
Some might see B2B as a way to make money and remain in the shadows, but it is a complex world where most agents are signed up to multiple agreements with aggregators and master agents, always looking to see who pays the most on which contract.
The final financial consideration is not the commission level itself, but when the payment will actually be received. Managing cashflow is our biggest challenge.
I get at least five emails a week from other agents wanting me to submit applications through them.
We will work with students months before they enrol, then it can take a long time for a university to verify our support and then we only get paid months after enrolment.
I did some analysis on this recently and most universities pay in January or February after a September intake, with our initial engagement with a student about 12 months prior to them enrolling.
In a B2B agency it takes even longer for the money to get passed down to subagents.
The quicker a payment can be made, the more likely we are to push the university in the future – 1% in additional commission is less important than getting it four weeks earlier.
My advice is to choose your agent partners carefully and work together to achieve realistic goals.
I’ve seen it all too often where a target was missed but the percentage commission was paid anyway so the “partnership” was maintained.
Money talks, but are you are getting value for the commission you pay?
The views expressed in this article are those of the author and do not necessarily reflect the views of The PIE News.
