In order to keep customers stick to your product, you’ll have to give benefits to your existing customers. There are two popular ways to do this, one is reward schemes and the other is subscription services.

Background Information

Parents in China nowadays spend an enormous amount of money on their children, and one crucial part is education, which is often referred to as Extra-Curriculum Courses. The money mostly ends up at TAL, as it’s probably one of the most experienced and capable education institutions. However, as more and more other cheaper institutions come out, TAL is losing its competitiveness on customer retention. TAL is now considering two strategies to tackle this dilemma, one, which has already been used right now, is to give rewards to its students, and the other is to take out subscription services.

This essay will describe the advantages and disadvantages of both strategies.


Reward schemes

This scheme, which has been carried out for a long time, is to give students small prizes like some notebooks or schoolbags. Instead of giving rewards directly to customers, students gain points during classes and redeem their rewards afterward. This approach makes it easier for running this system and can stimulate the interests of learning. Furthermore, pushed by this sort of reward, students will concentrate on their studies without getting distracted so that they can learn more knowledge.

However, this method is truly effective in lower grades while it becomes less useful for higher grades. Unlike young teenagers who need rewards to focus on their studies, older students have no interest in getting so little gifts. They simply want to learn quietly and alone without interacting with teachers. Therefore, this approach becomes incapable of older students and they may easily turn to other educational institutions.

In this way, despite it is partly effective, TAL needs other ways to retain its customers.

Subscription services

This way requires customers to pay for a little money and TAL would provide more sophisticated services such as free consulting. Customers will be more likely to stay in the same company if they pay for long-term services. TAL can also get more information from their customers in order to provide better services, which will result in a Win-Win solution. This method may strengthen the connections between teachers and students. Students won’t leave if they trust their teacher.

On the other hand, parents might be unwilling to pay extra money when they have already paid for the courses. Yet, this service can improve the learning achievements, parents are very difficult to give in.


It seems that both methods have their own benefits and drawbacks, so it’s better to combine different ways into a complete customer retention system. In the future, TAL may consider using both ways to regain its losing customers.