How Much Would You Pay for a Guaranteed 700+ Score?

Question

Hi GMAT Clubbers,

As you might know already from my frequent articles on GMAT Club, I'm a Harvard grad and professional GMAT tutor since 2002. I have taken the GMAT 5 times, and achieved 700+ scores each time, with personal bests of 770 composite, 50/51 Quant, 48/51 Verbal, 8/8 IR (2 times) and 6/6 AWA (4 times). GMAT Club still considers me a "Top Contributor" instead of an "Expert," but in my strong opinion, I'm a GMAT expert: I've been tutoring this test for 17 years now--I began as a peer tutor in college--and I've guided hundreds of students to amazing GMAT scores.

I'm considering the idea of a "700 guarantee"--in other words, if you don't crack 700, then you get your money back in full--but I'm not quite sure how to price it, given the inherent risk involved. One thing I know for sure is that I would have to charge up-front, and include a well-written refund policy (with signatures) so that students feel assured that they will get their money back if they don't reach 700. I would also have to put some failsafes in place so that nobody tries to game the system by getting a 700+ score, but pretending like it never happened!

My question is: what would you pay for such a service? I'm trying to see whether it's worth trying a different pricing strategy from my usual flat hourly rate of $220-295/hr.

Thanks,
Brian

My question is: what would you pay for such a service? I'm trying to see whether it's worth trying a different pricing strategy from my usual flat hourly rate of $220-295/hr. Thanks, Brian

DIII · Answer

I think the price that a person is willing to pay will be directly proportional to (700 - "his current score").

mcelroytutoring · Answer

Sure, that makes sense. Someone who already has a 680 wouldn't be willing to pay much for a 700, but someone with a 580 certainly might, given the large improvement required.

I imagine that someone who is scoring in the 500s would be the perfect candidate for such a guarantee.

k1414 · Answer

Hi Mcelroytutoring,

Just a watch out from a fraud perspective, if someone would pay in the thousands for your service with a 700+ guarantee, they have a lot of incentive to con you out of money. It wouldn't be difficult for someone to falsify an unofficial score report, or even rewrite the exam after getting a 700+ score and purposely score poorly. Just think, if someone were to - 1.) score a 700+, 2.) cancel score, 3.) rewrite 3 weeks later and get a 580, 4.) submit to you their score report, 5.) cancel the 580 score within 48 hours, 6.) rescend their 720 - would you be able to catch them? When a lot of money is on the line, people may be willing to do deplorable things. Just something to watch out for when you are writing in the rules of the agreement. Best of luck with your new approach!

calappa1234 · Answer

Well, risks of fraud aside, it would depend as DIII said, upon the person's current score.

From my perspective, back when I first started prepping for the GMAT and was scoring about 620 on the mock CATs I'd have been willing to pay about ~3000$ for a guarantee of over 700. (I'm from India, so that translates to quite a bit of money here).

I scored a 660 on the official attempt, so now, knowing that its within reach, I'd probably cough up 1500$ to get that guarantee because I'm familiar with how the test 'works' and am a lot more confident in my abilities.

mcelroytutoring · Answer

Thanks for the advice! I agree that I would have to be careful to avoid deception. I think what I would do is require the student to give me access to his/her personal GMAT score report, which is a secure PDF download that is accessible through a unique URL on the Pearson Vue website, and the student's Date of Birth. (This is also the system that GMAT Club uses to verify GMAT scores, because it cannot be faked.)

Unlike score reports that are sent to schools, the student score report shows all scores from the last 5 years, including cancellations, so it would be impossible to hide a 700-plus score...unless it was cancelled, but this would of course not be in the best interest of the student. Even if they were to cancel the score, if they ever tried to use the score, then I would be able to access it--and I would still require an ESR as proof, in the case that the scores were either temporarily or permanently cancelled.

It is of course true that one could attempt to game the system through cancellations and score reinstatements, but again I would require an ESR as proof, as well as a printout from the test center (no cancellations on the day of the test). I doubt that this type of calculated deception would be worth the effort for someone who can afford to pay thousands of dollars for a GMAT tutor.

As far as the pricing of the guarantee, I would have to take it on a case-by-case basis, but $1,500 to take a student from 660 to 700+ seems reasonable, if a little low, given the inherent risk for the tutor. Going from a 500 to 700+, however, would be less likely and therefore would cost significantly more.

https://www.drivecms.com/uploads/mcelroytutoring.com/Screen%20Shot%202017-10-09%20at%2012.05.48%20AM.png

mcelroytutoring · Answer

OK GMAT clubbers, thanks for the advice. I've decided that  I am going to offer a 700+ score money-back guarantee, but only on a case-by-case basis , and the price will be negotiated depending on the students' overall improvements: 50 points improvement is relatively easy, 100 points improvement is significant but about average for my students, and 150+ points improvement is possible, but the chances are less than 50%, so my pricing will reflect that reality.

The 700+ score guarantee will include up to 25 hours of private tutoring with me via Skype. I will require students to send me the link to their official GMAT student score reports, in order to their prove prior scores, and I will require them to prove (via the same system on the Pearson Vue website) that they have taken the test at least 3 more times before I will issue a full refund. I will also require pre-payment, along with a legal contract that we will both sign. I am also open to involving an escrow service, should you prefer.

If you're interested, then please contact me and let me know the specifics of your situation, along with your highest official GMAT score thus far. Happy studies!

TestPrepUnlimited · Answer

Best of luck on your ambition, Brian. The GMAT tutoring score guarantee is a  very  difficult nut to crack. It is no coincidence that the big names don't offer them. If they could, they would.

tiger66 · Answer

What’s your website address?

Sent from my iPhone using  GMAT Club Forum mobile app

rocko911 · Answer

what are the pricing? i want to get info about it

stonecold · Answer

"what would you pay for such a service?"

Great Question.
Here is my answer -> Not a dime.

With all due respect to your phenomenal credentials sir,Nobody and I mean NOBODY can guarantee a 700 GMAT.
It seems like one of those apocryphal newspaper Ads.
You have to remember that at the end of the day => If you want a 700 score -> you are really the one that is gonna grind.

Also, knowing that my money will get refunded will make me complacent and my thinking would be somewhat like -> "So what I don't get a 700 this time.I will still have the money"
For the whole process to be fruitful I would rather grind and sweat it out by buying an online course(or a tutor if I really need one) rather than a 700+ guarantee.
And off-course. Since you are private tutor and not a lot is know about you, consider this -> I don't get a 700. What if you refuse to payback.What are chances of an individual (not an accredited company) sitting in say Alabama paying back an individual who is in some small part of Africa.

ZERO!
I am not questioning your integrity sir, I am just questioning the thought-process behind taking such a call.
Maybe something to think about ?

Offcourse, these are my personal opinions. Feel free to disagree with them.

Best
Stone

abhimahna · Answer

Very well written. Kudos to you. I do agree that no one can really guarantee a 700 if you don't have something inside you to get to your target. Giving an option to take money back actually could make the things worse. Self determination and right strategies are the keys to get to your dream score.

jkolachi · Answer

I agree. You can be the best teacher/tutor but you can't guarantee a person will follow your advice/strategies on test day. Money back guarantee will actually make matters worse because students would feel that even if they didn't score 700+ they could just get their money back so they have less incentive to follow your strategies...

What happens if someone scores 690 or 680? Would you still give the money back?

mcelroytutoring · Answer

Yes, of course I can't literally guarantee a 700+ score! That's why you could potentially end up failing in your goal, but getting all your money back. The guarantee isn't technically the score itself--it's the promise of a full refund if you don't achieve a 700+ score.

This is not the right decision for everybody, that's for sure...especially since in order to get the guarantee, you would have to pay a multiple of my regular rates, which is dependent on your probability of scoring 700+. The vast majority of my students choose to simply pay my regular hourly rate, and take their chances.

And yes, there is a high degree of trust involved. But this is an issue that could be solved by an escrow service, for example.

One point I would disagree with, though, is that an individual private tutor is less trustworthy than a large company. I have known large companies like Verizon and Comcast to be far worse, in my 38 years of life experience, when it comes to trustworthiness, than small business owners and mom-and-pop shops.

Let me put it this way: my name is my business, and my business is my name. I have built an empire of trust around one person and one GMAT tutor: me. I'm not an anonymous worker who can hide behind a company logo. If I were not keep my end of the bargain in this type of situation, then it would give my business a bad name, and I can't recover from that, so this fact (in addition to my own strong principles) prevents me from taking advantage of students and clients.

If they score a 680 or 690, then yes, I would still give the money back. But part of the agreement is that you have to take the GMAT at least 3 times.

RigelKent · Answer

DS -- Will I graduate from HBS? Given: 1) $7,000 / 700 point = $10 / point. 2) $200,000...Answer choice "C!" Both are a Bargain, since upon graduation, McK will hire me at $200,000 / year + $50,000 bonus. =)

sapphirejade · Answer

I made an account just to reply to this.

Did you stop doing the guarantee? I don't see it on the website.

My only issues are with your 2 requirements for the guarantee, I'm somewhat unsure of the reasoning behind these other than protecting yourself financially..:

1. Fee for tutoring with guarantee versus fee for tutoring without guarantee. 
You said multiple times the regular fee. I would personally not like having such a strong psychological motive against scoring well.. The money wouldn't be too big of an issue, but deciding on paying for the guarantee is similar to (in my mind) telling myself, "I am betting this amount of money that I will not score 700 or higher for 3 tries in a row."

2. Required to take the exam 3 times. 
This is a big inconvenience for the test taker... I'm thinking from a personal perspective, but I wouldn't really have any incentive to take the GMAT two more times if I scored very close to 700. This requirement alone seems like a strong enough reason to prevent anyone from utilizing the guarantee. Personally, it's really the only reason I wouldn't.

Note: I've spent around $7,000 already on test prep, including private tutoring from 3 top companies. A 700 score guarantee could be a very lucrative market I bet.

mcelroytutoring · Answer

Yes, I still offer the guarantee on a case-by-case basis, which can be discussed with a phone or Skype call.

1) To be clear, I wrote "a multiple of my regular rates," not "multiple times the regular fee." In some cases, the multiple could be rather low, like 1.5x. Here's how I would look at it: you are not betting that you won't get a 700, you are paying for a 700, with a money-back guarantee if you don't achieve your goal. Why ever bet against yourself? If you fail, well, at least you didn't lose any more money. But that's a fallback, not a goal. If you are investing in yourself and in B-school, then my fees are low in comparison to the payoff of a top-25 program.

2) If you take it once and score 690, and that's good enough for you, for example, then I will offer a 690 guarantee. You only need to take it 3 times if you don't achieve your goal score right away. However, I'm not going to give you all your money back if you take it once and earn a 690--I need to protect myself from being caught in a technicality! That being said, the precise language of each score guarantee can be customized to fit the student.

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