Is It Right For An Economics Tutor To Give Referral Fee To Students?

There are many economics tuition centres in Singapore. Economics Cafe Learning Centre, Economics Focus and Learners’ Lodge are just some of the big names. Competition in the economics tuition industry has been heating up and this is especially true over the last few years. Economics tutors are coming up with new marketing tactics to attract students. Indeed, many economics tutors give high referral fee to students for bringing new students to the class. The question is, is it right for an economics tutor to give referral fee to students? This is a contentious topic.

Argument for Referral Fee

An economics tutor may give referral fee to their students for bringing new students to the class. There are several arguments for the case. The most common argument is that it will create a win-win situation. The economics tutor will gain new students which will help them generate more revenue. As the costs of an economics tuition centre are largely fixed in nature, this will translate into a higher profit. For the existing students, they will have more pocket money which will enable them to buy the things that they want. For the new students, they will get an economics tutor with a good track record which will help them obtain a better grade in the Singapore-Cambridge GCE ‘A’ Level Economics examination.

Argument against Referral Fee

One common argument against an economics tutor giving referral fee to their students for new students to the class is that it may distract the students. As the saying goes, “money is the root to all evil”. In an attempt to get more referral fee, a student may spend an excessive amount of time trying to recruit students for their economics tutor. This is bad for the student as spending an excessive amount of time trying to recruit students for their economics tutor will substantially reduce the amount of time they have available for study. As a result, the student is likely to get a poor grade in the Singapore-Cambridge GCE ‘A’ Level Economics examination, in spite of taking economics tuition. Furthermore, the referral fee may lead to misunderstanding between the student who referred the new student and the new student who was being referred. The new student who was being referred may think that they were being referred due to pecuniary factors rather than the fact that the economics tutor was good. This may strain the relationship between the students.

Referral Fee for Parents

Instead of giving referral fee to their students for bringing new students to the class, an economics tutor may give referral fee to parents for doing so. Parents of junior college students generally know one another. Indeed, some of the parents are in frequent contact with one another. Therefore, getting parents of existing students to bring new students to the class can be a very effective way of increasing student enrolments. This can be done by giving them a referral fee of 50 per cent of the fee for the first month of economics tuition. As the students are not involved in the process, they will not be distracted by this marketing tactic. An economics tutor may also get parents to organise foundation courses for economics for students who are 15 and 16 years of age. As economics is not offered in secondary schools in Singapore, many parents would like their children to have some understanding of the economics before they go to junior college. Therefore, such foundation courses can be very popular. An economics tutor can provide the incentive to parents to organise these courses by giving them 30 per cent of the profit.

Christopher Lau

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