Columbia Klingenstein Masters Program July 2014

60 Minute School Marketing

Step 1: GoalsStep 2: The Market

Step 3: What I Wish Leadership Knew

Step 1: Schools’ Core Advancement (aka Marketing) Objectives

• Reputation• Recruiting• Retention• Relationships• Revenues

The 5Rs of Marketing in Education

…objectives that are primary drivers of thrive-ability.

Step 2: “Gotta Know the Territory”5 Drivers of IS Demand

Demographics

Parent Attitudes and Beliefs

Government Policy

Competition

Income & WealthCf. “Managing Value: The Marketing Perspective on Affordability and Demand,” Affordability and Demand, Jeffery T. Wack, NAIS 2009

– 1-3% growth in 80s and 90s• Births peaked in 1991• What’s happening in your neighborhood?

Demographics

US 9th Graders

Which markets are growing vs shrinking?Non- “white”Where it is warmerOuter margins of metro areas, urban core

3.7

3.8

3.9

4

4.1

4.2

4.3

4.4

2005 2006 2007 2008 2009 2010 2011

US Births (millions)

US Births (millions)

The 1%-er Comeback!!

• Assets, a major contributor to incomes and wealth of the best-off, have rebounded

• Million dollar home sales up

• Prada is adding stores

• Rate of sales of luxury cars is double that of Fords, Mazdas, Jeeps

• Record prices for art

• Return of 9-figure gifts

Income & Wealth

Income Trends of the Probable Full Need, Partial Pay, and Full Pay Markets

From NY Times, July 2013

Day School: How much does it cost?

Family of 4, no COLA, no net worth/assets. (SSS Data)

“Full Pay”Income

“Full Pay”Income

Grade Tuition 1 Child 2 Children

6th $18,459 $130,473 $193,270

8th $19,340 $133,538 $199,430

9th $22,115 $142,807 $218,837

12th $21,695 $141,402 $215,900

Tuition = Medians for 2010-11; Source: NAIS National Tables

Chart excerpted from 2012 SSATB presentation

Income Trends of the 95th Percentile

Family

Sources: US Census Income Reports

35% Increase ($155,020 to $210,000)

Note the inflection in income growth in 2007, to no growth 2008-10, to %2 growth in 2011 and 2012.

Meanwhile, what did tuitions do?

http://www.census.gov/hhes/www/income/data/historical/families/index.html

Sources: NAIS StatsOnline and US Census Income Reports

Meanwhile, list tuitions kept on rising, outpacing incomes of even the 5-percenters

Jeffery T. Wack, PhDhttp://www.census.gov/hhes/www/income/data/historical/families/index.html

History of Tuition of 9th Grade Day

Vs 80% Increase!

The 95th Percentile Family is No Longer Full-Pay …Neither is the 96th

or 97th

(Rate of Growth in %)

The divergent rates of growth, plus fewer kids, explain why:

1) More of those families already at the school qualify for FA,

2) There are fewer full-pay families for the Admissions Office to find

Attribution: Jeffery T. Wack, Ph.D.

– No Child Left Behind, Common Core, next flavor • Public’s perceptions of public largely unchanged (Gallup/IU poll)

– Public schools dissatisfiers shake parent confidence• Reduced programs, larger classes, redistricting etc

– Income tax increases directed at IS parent and donor core

– Education loan availability, controls

– Public college tuition inflation

Government Policy

Public Assigned76%

More Recently• Charters – 1.4 million

• Magnets – 4 million

• Home Schooling – 1.5 million

• Proprietaries/For-profits

Public Choice14%

Private Religious

8%

Independent

2% (~570,000)

THEN • Neighborhood Public

• Parochial

• Private independent

Competition

What will be the impact of local budget battles on charters, magnets? Will mid-priced for-profits and religious schools grow?

Elasticity of Interest in Independent Schools at Two Price Levels by Family Income

25%

18%

29%

43%

4%6%8%

20%

0%

10%

20%

30%

40%

50%

$18,000 $10,000

Less than $100K

$100K-$150K

$150K-$20K

More than $200K

• Less secure

• Less confident their child can achieve what parents have

• Parents are education system “sophisticates”

• Believe a good education (and parent involvement) is critical to success

• Getting into a great college solves everything.

Uncertainty Fear Strive for Control

Parent Attitudes and Beliefs

SAT Test Takers 1972-2011

YearEnroll in college right after high school: 1975=51% 2008=69% Source: National Science Board report 2008

College Common App Prompts More Applications per Student, Fueling

Perception of Scarcity

SOURCE: HERI at UCLA College Freshman Survey

Average # apps filed:

1997=2.9

2012=3.7

1997:

1,100,000 SAT takers x 2.9 Apps =

3.2 Million Applications

2013:

1,660,000 SAT takers x 3.7 Apps =

6.1 Million Applications!

Why Parents, Seniors (and College Counselors) Have Gone Crazy:

Nearly Double the College Apps Over 16 Years

Applications to Yale

There has been very little growth in recent decades in the number of Ivy League freshman spaces. A benefit? This has enabled other colleges to become more selective, and to upgrade their student and faculty quality.

What’s the Net-net on the Market Environment?

Demographics

Parent Attitudes and Beliefs

Government Policy

Competition

Income & Wealth

Every school, and every school’s market, differs. So in marketing, rarely does one solution fits all.

School Success or Failure is a Joint Function ofthe Qualities of a School AND the Health of Its Market

Assets and Liabilities of the MarketFor Admissions:

For Fundraising:

Ass

ets

and

Lia

bili

ties

of

the

Sch

ool

For A

dmis

sion

:

For

Fun

drai

sing

:

Weak ------------------------- Strong

Wea

k--

----

----

----

----

--

Stro

ng

Step 3: I Wish Schools’ Leadership Teams and Boards Knew…

How to increase the birth rate ro move the school to where kids are; reduce the appeal of public schools; eliminate competitors; boost family income and wealth;

produce more moms and dads who view education as the solution to their worries.

But, schools can’t control these market drivers of IS demand.

I wish they knew:

Marketing is notmarketing

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Sample Marketing Questions

• Is the market growing?• What are competitors doing?• How can we stand out?• Are program and pronouncements in line?• How can we boost inquiries and yield?• What is the impact of a common app?• Can we package these disparate programs?

• What factors predict choice?• Offer merit scholarships?• How can we better use parents and alumni?• How can we attract teaching talent?• How can the program be made stronger?• How should we organize for this new generation of parents?

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• How can we broaden faculty understanding of their roles?

• What are customers saying about the school?

• Is our tough grading hurting us with colleges?

• Are families pleased with the College Counseling?

• Do faculty know how to write recommendations?

• Should Development have its own communications office?

• What is the message for an event?

• What characteristics of students predict giving as alumni?

• What programs are attractive to alumni?

• How is the website being used?

• What is our image in the community? Among feeder school? Consultants?

• Etcetera, etcetra, etcetra

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I wish they knew:To Coordinate the Factors that Shape Desirability

Price

Place/ Access/Policies

Product/Program

DEMAND

Promotion/ Communications

The 4Ps (+1) of The Marketing Mix

People

Demand is determined by how the offer to the market is configured and delivered.

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Perceived Benefits Perceived Costs

The higher the perceived value,

the higher the probability of purchase.

Value =

I wish they knew:Perceived Value Drives Buying/Giving

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I wish they knew: Marketing Causes Better Processes to Support the

Longitudinal Customer Relationship

Attracting

• Mission-consistent

• Image

• Promotion

• Program

• Appeals

Delivering•

Satisfaction/value

• etcRemindi

ng• Retention

• Loyalty

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ANALYSIS

EXECUTION

PLANNING

•Demographics

•Statistics

•Research

•Brochure

•Web

•Scripts

•Objectives

•Choices

•Design

Assess! The Market

I wish they knew: Strategic Planning that Does not Begin with

Marketing is NOT Strategic

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FacilitiAlu

mni

Personnel/HR

Develop

men

tB

usin

ess

Off

ice

Facilities Faculty

Admiss

ions

I wish they knew: Marketing is a Part of Everyone’s Job

Colleges A

gents

Parents

Others

Others

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I wish they knew: How Important Customer-Centric Design Is

Inquiries, Applicants Colleges

1. Parent/board WOM2. School fairs3. Visit website4. Reply to inquiry5. Post inquiry prompts6. Tour, interview7. Reply to application8. Accepts and Denies9. Second Visit day10.Post-accept recruiting

1. Visits to school

2. Phone contacts

3. School profile

4. Student’s application

5. Recommendations

6. Student’s interviews

7. College fairs

8. Feedback re alumni performance

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Development: Annual Fund

Parents Association: Fundraiser

Business Office: Tuition Payment

Athletics: Team uniform

Communications: Bulletin Subscription

Admissions: Volunteer Time

Who’s asking customers for what, and when?

I wish they knew: Marketing strives to overcome

schools’ vertically-siloed organizational structures

• How to design marketing positions, and hire• What works at the trustee’s Fortune 500 is

irrelevant to a school…and vice versa• Magic bullets are not magic• Etc• Etc• About the 19th Strategic Marketing & Advancement

Institute, November 18-20, Charleston www.marketingindependentschools.com

I wish they knew: