Educational institutions worldwide are increasingly prioritizing long-term value and cost-effectiveness. Over the past years, the average annual spending per student from primary to tertiary education in OECD countries was approximately USD 12,500, with an average CAC of USD 806,, or a 6.4% CAC-to-spend ratio places it among the higher acquisition cost industries compared to high-value sectors where it hovers around .03%, highlighting the substantial investment required to deliver quality education. This focus on financial efficiency underscores the importance of metrics like Customer Acquisition Cost (CAC) and Lifetime Value (LTV) in evaluating an institution’s profitability and growth potential. OECD iLibrary

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CAC represents the cost of enrolling a new student, encompassing marketing, admissions, and related expenses. LTV measures the total revenue a student generates throughout their enrollment. For example, a study by EY-Parthenon identifies six critical financial and operational metrics to assess institutional risk, emphasizing the need for a balanced approach to economic sustainability. By optimizing CAC and enhancing LTV, educational institutions can allocate resources more effectively, ensuring profitability and long-term success.

High CAC is expected in sectors where customer acquisition is challenging, such as software-as-a-service (SaaS) and premium education services. Companies that can offset high CAC with a substantial LTV are likelier to thrive, while those with low CAC and low LTV often rely on rapid growth and high user volumes to compensate.

High CAC, High LTV: Premium SaaS platforms and certification-based educational providers, like online educational providers, often have high CACs due to the substantial marketing, sales, and onboarding investments required to gain trust. However, these costs are justified by high LTV, as customers typically stay for long periods or purchase higher-value packages. Low CAC, Low LTV: Media companies often benefit from low CAC because they attract users through content rather than paid advertising. While their LTV might be low per user, they reach a larger audience. For SaaS companies with high CACs, acquiring such media companies can be strategic, as it provides a built-in audience with low acquisition costs.

CAC and LTV in the Education Sector

CAC can be a substantial barrier to growth in education, especially for providers seeking international market penetration. Online education providers may have lower CACs than traditional international schools but can need help with retention and lower LTV. However, certification programs enjoy higher LTVs due to the perceived value and longevity of their programs, which can justify their higher acquisition costs.

To manage CAC and LTV better, some education companies have turned to partnerships or acquisitions. For example, an online education platform might deploy a strategy to develop partnerships with local schools or consider acquiring a media company or educational blog to access a pre-existing audience, reduce CAC, and increase brand visibility.

In the education sector, the average CAC is approximately $806, reflecting the significant investment required to attract new students.

In comparison, the e-commerce industry experiences a lower average CAC of about $274 due to the widespread use of digital marketing strategies. In the automotive industry, the average CAC is around $234, while in real estate, it can be as high as $923 due to the complex and high-value nature of transactions. In the travel industry, the average CAC is particularly low, at around $7, which reflects the high transaction volume and extensive digital marketing reach in this sector. However, LTV in travel can vary widely depending on customer loyalty and travel frequency.

According to BlueCart, the average CAC for restaurants can vary significantly based on location, dining style, and marketing strategies. For example, a restaurant that spends $1,045 on marketing and acquires 15 new customers has a CAC of approximately $69.66 per customer. In e-commerce, the average CAC is about $53. In the supermarket and food retail industry, it is $10. This relatively low CAC is due to the high demand for food products and the effectiveness of digital marketing in reaching a broad consumer base. However, like other sectors, LTV in food can differ based on purchase frequency, brand engagement, and customer loyalty in the fashion and accessories sector. The average (CAC) is approximately $129.

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This figure reflects the competitive nature of the industry and the substantial marketing investments required to attract new customers. However, it’s important to note that actual CAC can vary, as seen above, significantly based on business size, target market, and marketing strategies. For instance, smaller businesses or those with a solid online presence may experience different acquisition costs compared to larger brick-and-mortar retailers.

Regarding education, these metrics can be complex to optimize in the education sector — particularly among international schools, online providers, and certification-based educational institutions. Education institutions face challenges due to high CACs, intense competition, and varying lifetime values, which fluctuate by region, age group, and target audience. Additionally, companies expanding internationally must be cautious about misinterpreting digital behavior as purchasing intent, especially when entering markets with different consumer priorities and cultural values.

For instance, in Asia, parents value premium international education highly, especially in countries like China and South Korea, where educational attainment is linked closely to social and career advancement. However, digital engagement only sometimes indicates readiness to purchase high-ticket educational services, as families tend to research intensively and rely on trusted recommendations before making significant educational investments. In Europe, education providers face a more skeptical and cost-conscious audience, particularly in Western Europe, where solid public education systems create a competitive landscape for private and international schools. European parents may engage with digital content in education, but they prioritize established reputation and in-person referrals when making educational decisions.

Economic factors and cultural attitudes toward education also play a unique role in Southern Europe — particularly in countries like Spain, Italy, and Greece. Families in these regions may show high levels of digital engagement with educational content but remain conservative with spending, often favoring local, affordable options over perceived costly international programs.

Southern European families value in-person educational experiences, and international schools face a challenge competing against robust public systems that are highly regarded and more accessible. However, certification programs, exchange programs, and summer camps have gradually gained traction, particularly among middle- to upper-income families interested in enhancing global opportunities for their children.

The above argument is very representative in places like Greece, where parents invest much more time, energy, and resources than in the rest of Europe by the time their students graduate high school — specifically, they spend an average of 35,000 euros compared to the average European family, which spends about 22,500 euros on their child’s education. As we witness on the ground, the increased spending indicates a high level of care from the parents’ side to ensure they have exhausted all options and, simultaneously, desperation due to a lack of a clear, successful pathway to university for their children, resulting to overloading students daily programs.

The market in this region and based on our on-the-ground experience over the past years, is sending clear messages that to succeed, international education providers should position their programs as valuable investments in global skills, offering competitive pricing and personalized, locally relevant support to meet the unique needs of each market while at the same time investing time to educate the parents as much as the students of all the available options students have today.

In Eastern Europe, economic constraints and a traditional preference for local education have historically limited the adoption of international school programs. However, a growing middle class and increased interest in global career opportunities have increased the demand for international certifications and bilingual education. Families in countries like Poland, the Czech Republic, and Romania are showing increased engagement with online educational platforms, often as supplements to local schooling. Nevertheless, CAC remains high for international providers, as families are cautious about investing in costly education options without clear career benefits. The messages in these regions are very similar yet have yet to be ignored or draw attention from the major players in education. To capture these markets, educational providers must offer flexible, hybrid options incorporating local curricula alongside international content, allowing families to bridge local and global education systems.

A strong demand for international education in the Middle East is driven by a highly mobile population and the desire for globally recognized qualifications. In countries like the UAE, Saudi Arabia, and Qatar, international schools are seen as prestigious, and parents are often willing to pay higher tuition for education that provides access to Western universities and career paths. The CAC for international education providers in the Middle East is high but justified by strong LTV, as families view education as an investment in their children’s global opportunities. Additionally, digital engagement aligns more closely with purchasing behavior here, as affluent families actively seek online and hybrid educational solutions to supplement traditional schooling. However, cultural sensitivity and localization are essential for success, as families expect education providers to respect and incorporate local values.

In Africa, affordability and accessibility are top priorities. While digital behavior shows interest in online courses and certifications, purchasing decisions are often constrained by economic factors, making low-cost, flexible payment options crucial for success. In North America, digital engagement in education is usually more aligned with purchasing behavior, as online education and certifications are well-established and trusted. However, even here, families are influenced by factors such as brand recognition and course outcomes, and they may prefer hybrid models that offer both online and in-person learning opportunities.

Recognizing these regional differences in digital engagement versus purchasing intent allows educational providers to fine-tune their CAC strategies, build trust, and tailor offerings to each market’s values and priorities.

How CAC and LTV Play Out in Education

International Schools vs. Online Providers vs. Certification Providers vs. Incumbents

International Schools: For international schools, CAC can be extremely high due to the need for extensive marketing, physical campus investments, and recruitment of skilled teachers. However, the LTV of each student is also high, as tuition fees are substantial, and students typically remain enrolled for multiple years. Cambridge and IB schools benefit from even higher LTVs due to strong global brand recognition and standardized curricula.

Online Education Providers: Online providers often enjoy lower CACs thanks to digital marketing channels and scalable models. However, the LTV for online providers can vary greatly, especially when targeting younger age groups who may switch platforms or discontinue courses more frequently. Providers emphasizing professional certifications, such as Coursera, can increase their LTV by targeting adult learners who see direct career benefits in their programs.

Certification Providers: Certification programs enjoy high LTV due to their long-term association with students and the high perceived value. While CAC for new partnerships can be high, the established credibility and demand for standardized qualifications like Cambridge and IB certifications provide a significant competitive advantage. These certifications also offer educational providers higher retention and continuous enrollment, particularly in regions where such certifications are highly sought after.

Schools Aspiring to Become International: They balance High Capital Investments with Smart Alternatives. The path is often filled with significant capital investments for schools looking to achieve international school status. These investments range from meeting global curriculum standards, recruiting qualified international teachers, establishing competitive facilities, and obtaining international accreditations. While these efforts can elevate a school’s reputation and attract a broader student base, they come with substantial financial and logistical demands that only some institutions can meet. However, an alternative approach is emerging where schools partner with established online school providers, leveraging their curricula, resources, and digital infrastructure to offer international-standard education at a fraction of the cost. Traditional international school models require extensive resources and high upfront costs. To meet the demands of a global curriculum, schools often need to:

• Upgrade Facilities: To attract international families and adhere to accreditation standards, schools must offer state-of-the-art classrooms, labs, libraries, and recreational spaces. Building these facilities can cost millions, particularly in regions lacking high-quality infrastructure.
• Recruit Internationally Qualified Faculty: Hiring faculty trained to teach international curricula, often from abroad, is expensive. These teachers may command higher salaries and benefits packages, increasing the school’s operational costs.
• Maintain Accreditation Standards: Obtaining and maintaining accreditation from bodies such as IB, Cambridge, or the Council of International Schools (CIS) involves regular evaluations, which require time, resources, and rigorous academic and operational standards.

These investments create a high Customer Acquisition Cost (CAC) for international schools, as each student recruited must cover a share of these expenses through tuition fees or alternative funding sources. However, each student’s Lifetime Value (LTV) can be substantial, as international school enrollment tends to have high retention rates and long-term stability.

Turning to Smart Alternatives:

Partnering with Online School Providers

Given the high CAC required to become an international school, some institutions choose an alternative route: collaborating with online school providers. By partnering with online schools offering international curricula, such as the Cambridge International or IB programs, traditional schools can offer a globally recognized education without the capital-intensive requirements of a global campus. Here’s how this model works and the advantages it provides:

Access to High-Quality International Curricula: Online school providers allow local schools to offer recognized international curricula virtually. This means students can access an international curriculum without the school investing in complete on-campus resources to support it.

Cost-Effective Faculty Solutions: Instead of hiring a complete international teaching staff, schools can offer online classes taught by qualified instructors from the online school provider. This hybrid model allows schools to reduce their staffing costs while ensuring students receive high-quality, international-standard education.

Attracting a Broader Student Base: Schools that partner with online providers can attract local students interested in obtaining an international diploma and potentially reach international students who prefer hybrid or remote learning options. This broadens the school’s market without increasing its operational costs significantly.

Scalable Growth with Lower CAC: By leveraging the online provider’s digital infrastructure, schools can reduce their CAC for each student, particularly those interested in international education. Partnering with a respected online provider can enhance the school’s reputation, helping it attract more students without incurring the same overhead as a standalone international school.

Case Example: A traditional private school in Europe partnered with an online provider offering a based curriculum, which allowed it to start offering English-speaking courses beyond English learning languages programs without substantial investment. By doing so, the school was able to reach new student demographics interested in international education, increase its enrollment rates, and improve its competitive standing in the local market.

Benefits to Enrollment Growth and Market Positioning

Partnering with online providers cuts costs and enhances enrollment growth strategies for schools in developing or emerging education markets. This approach allows schools to experiment with international offerings without risking building an entire international school from scratch. Furthermore, by associating with a recognized online school, institutions benefit from the provider’s established reputation, which can attract students interested in globally recognized qualifications.

Combining CAC and LTV Strategies for Long-Term Success

This hybrid model provides a strategic advantage for schools aiming to grow enrollments while managing CAC and boosting LTV:

Reduced CAC: By leveraging the digital presence of an online school provider, schools gain access to a built-in network of international educators and resources, significantly reducing their customer acquisition costs.

Enhanced LTV: International credentials and certifications tend to retain students longer, increasing the LTV as families seek continuity in their children’s education.

Global CAC and LTV Trends in Education

CAC and LTV in education vary significantly across regions. For example:

North America: Due to the high demand for quality education, CACs are relatively high, especially among online providers targeting affluent families or adults seeking certifications.

Europe: CAC is moderate, but LTV can be high in countries where certification programs are prestigious. European markets also present an opportunity for lower CACs if education providers acquire media channels with built-in educational audiences.

Asia: CACs are high, especially in competitive markets like China, where parents are willing to pay premium prices for quality education. LTV is also high in regions where private education is seen as a path to better career opportunities.

Africa: While CAC is lower due to less competitive advertising markets, LTV is lower as purchasing power is more limited. However, education providers can benefit by tailoring their offerings to affordable online certifications and career-focused courses, potentially increasing LTV through high-volume enrollments.

Understanding Digital Behavior vs. Purchasing Intent

As education providers expand internationally, it’s crucial to distinguish between digital engagement and actual purchasing behavior. A significant challenge is that while users may spend extensive time on digital platforms, this does not always translate to buying behavior — especially for high-ticket items like private school tuition or certification programs, where family decision-making and cultural priorities play vital roles. Each continent has unique patterns that education providers must consider to align their digital strategies with genuine purchasing intent.

In Asia, where private education is highly valued as a pathway to career advancement and social mobility, digital behavior often includes extensive research, social media engagement, and detailed online comparisons. Countries like China, South Korea, and India see high digital engagement with education-related content, with parents spending considerable time investigating options, reading online reviews, and joining parent forums. However, despite this online activity, actual purchases are more heavily influenced by recommendations from trusted social circles, educational consultants, and the reputation of established brands. In China, for instance, nearly 70% of parents rely on referrals or established institutions to make education decisions, valuing in-person consultations and the credibility of long-standing institutions.

In Europe, digital engagement also plays a role, particularly with families who conduct preliminary research online, review educational forums, and seek out parent testimonials on digital platforms. However, traditional purchasing influences remain strong. Western European families, for example, often rely on local educational advisors, school counselors, or peer recommendations for their final decisions, valuing the insights from trusted sources within their community over digital advertisements. A 2022 study in France found that 80% of parents preferred direct recommendations from educational professionals or other parents over online content when making significant educational investments. Additionally, Southern European countries like Spain and Italy show lower purchasing conversion rates from digital platforms than Northern Europe, with parents often seeking in-person visits to verify a school’s reputation before enrolling their children.

Families engage extensively with online education platforms and international school websites to understand offerings in the Middle East, where there is a significant demand for premium, internationally recognized education. Yet, as with Asia, purchasing behavior remains influenced by cultural values and personal connections. In the UAE and Saudi Arabia, for example, affluent families frequently use digital platforms to explore options but rely on personal networks and advice from education consultants to make final decisions. The importance of international school status, accreditation, and alignment with local values often outweigh digital factors alone, with 60% of parents indicating that they prioritize personal referrals over digital research when making education choices.

Digital engagement with educational content in Africa is high, particularly as mobile internet access expands rapidly across the continent. In Nigeria and Kenya, parents actively use social media and educational apps to gather information on schooling and certifications. However, purchasing decisions are heavily influenced by economic factors and accessibility, as high-ticket items like international school tuition or certification programs may be out of reach for many. Online education providers targeting African markets have found that low-cost, accessible payment options, such as installment plans or scholarships, are often necessary to convert digital interest into enrollment.

In South Africa, a survey found that over 50% of parents prioritized affordability and payment flexibility when choosing private education options, regardless of online engagement levels.

In North America, there is a closer alignment between digital engagement and purchasing behavior. The prevalence of online education and certification programs means that American and Canadian families are generally comfortable making education-related purchases online, especially for hybrid or fully online programs. Parents often rely on reviews, virtual tours, and social media interactions to make purchasing decisions, and they are more likely to use digital channels for enrollment. However, brand recognition and perceived value are still crucial; 78% of American parents report that an established institution’s reputation significantly influences their final decision. Additionally, North American families value flexible learning models, including digital and in-person components, to suit diverse educational needs.

In Latin America, digital engagement in education is proliferating, driven by increased internet access and a rising interest in alternative education pathways. However, a significant gap remains between digital engagement and purchasing behavior, especially for high-ticket educational services. While families across countries like Brazil, Mexico, and Argentina actively engage with educational content on social media, participate in online webinars, and use educational apps, many are cautious about making significant educational investments online. Trust is a critical factor in this region, and families often prefer in-person interactions with educational consultants or representatives before committing to substantial educational expenses.

Like North America, brand recognition is essential in purchasing decisions, as parents often prioritize institutions with solid reputations or international accreditations. For instance, in a 2022 survey, 65% of Latin American parents indicated that the reputation and history of an institution significantly influenced their final choice for their child's education. Additionally, Latin American families generally value in-person learning experiences but are open to hybrid models combining online and classroom instruction. Flexible payment plans are also a high priority in the region, where economic factors can heavily influence purchasing behavior.

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Recognizing these regional differences in digital engagement versus purchasing intent is essential for international education providers navigating diverse and increasingly competitive markets. As the global demand for quality education continues to grow — with the international education market projected to reach $450 billion by 2027 — adapting to local expectations and purchasing behaviors becomes a strategic advantage and a necessity for sustainable growth.

By understanding the nuances of each market, providers can design highly targeted strategies that align with local cultural values, economic conditions, and decision-making habits. For example, building partnerships with trusted local advisors and educational consultants in Europe can be invaluable, as these relationships play a crucial role in influencing family decisions. In Asia, where parents heavily prioritize quality and reputation, establishing strong referral networks and collaborating with reputable local brands can help build credibility and trust. In Africa, affordability and accessibility are paramount, so offering flexible payment plans, scholarship options, or low-cost introductory programs can make high-quality education attainable and attractive. Meanwhile, in North America, where digital channels often drive direct purchasing, maintaining a robust online presence, a solid brand reputation, and hybrid learning options can cater to various educational preferences.

This nuanced approach enables providers to reduce Customer Acquisition Cost (CAC) by aligning marketing efforts with behaviors specific to each region, and it increases Lifetime Value (LTV) by ensuring that once families invest in a program, they remain loyal due to the brand’s relevance and cultural alignment. Ultimately, a localized, data-driven strategy that respects the complexities of each market allows education providers to foster trust, expand their reach, and establish a lasting presence in an ever-evolving global education landscape.

References

1. OECD iLibrary. “Education Spending Per Student.” Education at a Glance 2021: OECD Indicators, 2021. Available at: https://www.oecd-ilibrary.org/
2. National Center for Education Statistics (NCES). “U.S. Public Education Spending Statistics.” NCES, 2022. Available at: https://nces.ed.gov/
3. EY-Parthenon. “Key Financial Metrics for Educational Institutions.” 2021. Available at: https://www.ey.com/
4. BlueCart. “Customer Acquisition Costs in the Restaurant Industry.” BlueCart Blog, 2022. Available at: https://www.bluecart.com/
5. StartupTalky. “Customer Acquisition Cost by Industry.” StartupTalky, 2021. Available at: https://startuptalky.com/
6. First Page Sage. “Average Customer Acquisition Cost by Industry — B2C Edition.” First Page Sage, 2023. Available at: https://firstpagesage.com/
7. McKinsey & Company. “Navigating Digital Engagement and Purchasing in Global Markets.” McKinsey Global Institute, 2023. Available at: https://www.mckinsey.com/
8. UNESCO Institute for Statistics. “Global Demand for Education: Statistics and Projections.” UNESCO, 2020. Available at: https://uis.unesco.org/
9. World Economic Forum. “Education Market Growth Projections.” Future of Jobs Report 2023. Available at: https://www.weforum.org/
10. Deloitte. “Global Trends in Education Spending and CAC.” Deloitte Insights, 2022. Available at: https://www2.deloitte.com/
11. UserPilot. “Average Customer Acquisition Cost Across Industries.” UserPilot Blog, 2023. Available at: https://userpilot.com/blog/average-customer-acquisition-cost/
12. Statista. “Projected Global Education Market Size.” Statista Research Department, 2022. Available at: https://www.statista.com

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