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Agenda
Part I: The Value of Market Research
Part II: Gathering Trend and Consumer Research to Drive Marketing and Strategic Planning
Part III: Conducting your Own Research
Part IV: Case Study—Using Research to Assess Market Potential
Part I
The Value of Market Research
Why Conduct Market Research?
Market research:
– Provides a systematic and objective method for collecting, analyzing, and using information for strategic planning and marketing
– Enables you to know your constituents (parents, students, alumni)
– Ensures that you are data-driven rather than anecdote-driven
Market Research Keeps a School Strategically Focused
What are our priorities?
How well are we doing?
What global, national, and local trends do we need to be aware of that might affect our school?
Will local demographics sustain our school in the next 5-10 years?
How do our constituents and the general marketplace view us?
Where should we apply our financial resources?
Market Research Informs
Parent Surveys help to clarify:
– Why families choose a school
– How to best market a school to prospective families
– Where a school is succeeding and where it needs to improve from the parent perspective
– What differentiates parents’ views of a school
– How families experience a school’s culture
– What is the profile of your typical family
– How price sensitive are your families
Market Research Tells a Story
Alumni Surveys aid in understanding:
– The long-term benefits students gain from attending a school
– Potential for alumni fund raising
– How to best serve alumni today
– How to connect with alums from different generations
Market Research Provides Data to make Informed Decisions
Demographic Research provides hard data on
– The numbers of school-age children in the area from which you recruit and their family’s income, race, and ethnicity
– Other useful data such as trends in housing prices, consumer spending, etc
Sample Market Research Agenda
– Environmental Scanning (global, national, and local trends): Annually
– Parent Research (satisfaction, why students enroll, priorities): Annually
– Admissions Research (students who enroll and who do not enroll, attrition studies): Annually
– Demographic Research (school-age population, family incomes): Annually
– Alumni Research (alumni planning and fund raising, alumni stats for marketing): Every few years
– Image Assessment (community, current and prospective families, colleges): Every few years
(From “The Value of Market Research” by Kathleen Hanson, Marketing Independent Schools in the 21st Century, NAIS, 2001.
Part II
Gathering Trend and Consumer Research to Drive Marketing and Strategic Planning
What We See from Trend Research
Current families are looking for specific data on value-added of independent education
More choice in educational environment: public, charter, parochial, magnet, home-schooling
Tuition is rising more quickly than disposable income in some parts of the country
Generational differences are driving different choices in education
NAIS Economy Research 2009
The goal of this research is to try to understand how the economy might impact enrollment and giving to independent schools. The research encompasses four studies:
– Education consultant survey
– Prospective family survey
– Current family survey
– School pulse surveys
Prospective Families: Are You Considering An IS
Education?
32.3%
41.3%37.3%
41.9% 42.6%48.6%
67.7%
58.7%62.7%
58.1% 57.4%51.4%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Less than$100,000
(n=31)
$100,000-$149,999
(n=75)
$150,000-$199,999(n=166)
$200,000-$249,999
(n=86)
$250,000-$299,999
(n=47)
Greater than$300,000
(n=70)
Yes No
475 responses
Prospective Families :Is the Economy Affecting Your Choices?
57.6%
40.3%31.1% 29.9% 33.3%
28.2%33.3%
49.4%56.9%
63.2% 62.7% 63.4%
9.1% 10.4% 12.0%6.9%
3.9%8.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Less than$100,000(n=33)
$100,000-$149,999(n=77)
$150,000-$199,999(n=167)
$200,000-$249,999(n=87)
$250,000-$299,999(n=51)
Greater than$300,000(n=71)
Yes No Unsure/Don't Know
486 responses
Who are Your Families?
Slam on the Brakes—Vulnerable and hardest hit financially
Pained-but Patient—Resilient and optimistic about the long-term, but less confident about recovery in the near term
Comfortably Well off—Feel secure about their ability to ride out current and future bumps (mostly top 5% income bracket)
Live for Today—Carries on as usual (typically urban and younger)
– Excerpted from How to Market in a Downturn, Harvard Business Review
Prospective Families: Ranking Of Educational Choices
Why Prospective Families Are NOT Considering IS?
•Past experience with private schools BAD•I do not like the elitist perspective with which children are imbued in private schools•They went to private from K-8th, time for the real world•Need for ethnic diversity in their environment•Believe in a public school education•FISD public schools are the best in the country•No private schools within our area•Services required not offered by independent schools•Saving money for college versus private school education•Haven't found a school to suit our daughter's special needs•Not desired
Prospective Families: Of those answering “YES” to IS …
Prospective Families: How Will You Finance
Your Child’s Education?
Current Family Enrollment Plans
Parents’ Enrollment Plans
80% plan to continue sending their children to the same independent school next year. (with conditions)
4% will switch to another private school
3% will move out of private independent schools
6% are unsure
Drivers for leaving: Cost, competitive cheaper private schools or free public schools, diversity, desire for “real-world” experiences
“We will hold on for as long as we can…” For many families, continued enrollment over the long-
term is conditional and somewhat uncertain due to economic factors…
– Overall loss of wealth/savings
– Rising cost of tuition greatly outpaces yearly salary increases
– Job loss and/or new job at a much lower income
– Retired or near retirement
– Business owner and business is very slow
– College costs are a major concern—especially for families with more than one child
– Total tuition costs if more than one child in independent school
Current Parents on Financial Aid
22% of respondents currently receive financial aid
11% who do not currently receive financial aid plan to apply for financial aid during the current or next school year
Some who need aid will not apply
“We will do anything…”
Parents are considering deferring or sacrificing elements of their lifestyle to keep their children in independent schools
– Vacations (73%)
– Eating out (59%)
– Buying new clothes or personal items (54%)
– Putting money into savings/retirement plans (50%)
– Home renovations (49%)
– Purchasing an automobile (41%)
Giving Plans
More than 80% of parents made a charitable contribution to their children’s school in the past and plan on making contributions to these schools in the future
– 49% will give at the same level as before
– 7% will give at a higher level than before
– 18% will give at a lower level than before
50% gave under $1,000; 21% gave between $1,000 and $2,499
24% of parents reporting incomes greater than $300,000 plan to give at a lower level
From the Center on Philanthropy
Most households continue giving even through lean times, although some do so at decreased amounts
Donors earning under $50,000 are more likely to become non-donors than are those earning more than $50,000
The number of contributions of $1 million or more made by individuals — which, during the first half of 2008, had been on track to exceed the tally for 2007 — fell sharply in the second half of 2008, down 33 percent versus the same period for 2007. This constituted the largest drop since the attacks of September 11, 2001.
The Effects of the Economic Downturn on the District of Columbia Metropolitan Area The DC metro area has seen a steady decline in
employment numbers, from +1.01% in April 2008 to -3% in April 2009
A considerable decline in investment and new housing starts, down 50.42% in April 2009
A sustained decline in industrial production, down from +2.49% in April 2008 to -12.38% in April 2009
Retrieved from Moody’s Economy.com and MSNBC.com’s Adversity Index, http://www.msnbc.msn.com/id/29976394.
District of Columbia Economic Outlook:Strengths
Highly educated workforce
High per capita income
Status as the nation’s capitol stabilizes economy and ensures tourism
Strong growth in suburbs maintains demand for DC workers
From Moody’s State Précis District of Columbia Economic Outlook, www.economy.com
District of Columbia Economic Outlook:Weaknesses
High business costs
Weak population growth
Security and crime risks
Weak school system
From Moody’s State Précis District of Columbia Economic Outlook, www.economy.com
How does Moody’s rank the District of Columbia?
“Employment Growth Rank for 2008-2010 (1=best, 54=worst):
– 2 (1st quintile)
Cost of Doing Business (composed of labor costs, tax burdens, energy costs, and office costs):
– 115% (15% above national average)
Per Capita Income:
– 163% (63% above national average)”From Moody’s State Précis District of Columbia Economic Outlook,
www.economy.com
Part III
Conducting your Own Research
Options for Conducting Your Own Research
In-house research expertise
Market research expert: local or national
NAIS SurveyBuilder
NAIS Demographic Center
NAIS SurveyBuilder
Standard Surveys w/customizable questions
– Parent Satisfaction
– Young Alumni Outcomes
– Board Assessment
– Head Evaluation
Conduct Demographic Research
NAIS Demographic Center
– Run reports on demographic changes by zip code/census track/block group
– Study Metropolitan Area Reports for a summary of overall changes
– Use Profile Analysis tool to pinpoint target recruitment areas
The NAIS Demographic CenterThe NAIS Demographic Center
In November 2006, NAIS partnered with Easy Analytic Software, Inc. (EASI) to create the NAIS Demographic Center
1. They include variables such as school population, families with children by income, race/ethnicity, and educational attainment
2. Types of reports:
– Summary Reports
– Detailed Reports
– Multiple Area Reports
DEMOGRAPHIC CENTERDEMOGRAPHIC CENTERBasic ReportsBasic Reports
DEMOGRAPHIC CENTERAdditional Reports for Advanced Use
1. They include variables such as population, households, families, housing, income, employment, education, sales, cost of living, and/or consumer expenditures.
2. Five types of reports:
– Quick Reports
– Ring Studies
– Quick Maps
– Rank Analysis
– Profile Analysis
Study the Changes in School-age Pop by Income
102000
104000
106000
108000
110000
112000
114000
116000
200020092014
The District of Columbia recorded 3.04% decline between 2000-2009 and is forecasted to record 3.58% decline between 2009-2014.
Changes in the District of Columbia School-age Population
0100200300400500600700800900
1000
Age 5-9 Age 10-13 Age 14-17
200020092014
Growth in School-age Families w/ Income Of $350K+ in the District of Columbia
0
10000
20000
30000
40000
50000
60000
70000
80000
Hispanic Asian
200020092014
Growth in Hispanic and AsianPopulations in the District of Columbia
Part IV
Case Study: Using Research to Assess Market Potential
What the School Sought: Current Position in Marketplace
What are the school’s five- and ten-year admission trends? Yield trends?
How do they compare with independent schools in the area?
What is the image of the school among the region’s families? How could that be improved?
Given the educational needs of Gen X families, what are the school’s competitive strengths and weaknesses?
Who are the school’s parents today (e.g., by income range, race/ethnicity, public/private school orientation, financial aid history)?
How price-sensitive are parents today?
Does the school have waiting lists today? If so, where?
What the School Sought: Affordability
How are income demographics changing in the region?
What is the elasticity of the school’s tuition in the current market—at what price will the school begin to lose families? At what price will the school become unaffordable in the market?
How does increasing tuition at the current rate affect the school’s mission (i.e., how important is “affordability”)?
Is the current financial aid model the correct one or should it look more like the college model in which most tuition is discounted?
The Research Agenda Study the admissions funnel (inquiries, applications, acceptances,
enrollment) for this school and similar schools in the marketplace to understand five- and ten-year trends for demand and yield.
Conduct a parent satisfaction survey and review past parent satisfaction studies to assess satisfaction levels and to determine a profile of the school’s families.
Collect and analyze demographic data on growth of school-age children by zip code (those zips from which the school currently draws students as well as those zips where there is the greatest growth in numbers).
Collect and analyze demographic data on income growth for families with school-age children by zip code (those zips from which the school currently draws students as well as those zips where there is the greatest growth in higher income families).
Conduct a survey with area education consultants to identify changing trends overall and trends specific to the school.
Parent Satisfaction Study
Key Areas of Inquiry
– What is most important to parents and how satisfied are they with how the school delivers?
– What attracted them to the school?
– To what other schools did they apply?
– What is the profile of the school’s families?
– What is the elasticity of the school’s tuition?
The Power of Filtering Data
Understand the nuances of the market by filtering data by:
– Age
– Income
– Gender
– Satisfaction w/school
– Grade of entry
The Demographic Trends
Although the school-age population in the zip codes from which the school attracts students is declining, the number of children from high income families is increasing.
There is great potential in adjacent zip codes; that is, zips from which the school currently gets few students, but are adjacent to zips from which the school gets many.
There is great potential in farther out zip codes if the school could find a means to attract those students.
Survey of Area Education Consultants
What the School Sought
– Are consultants aware of the school?
– How would they describe it? To what kinds of students would they suggest the school?
– Are families aware of the school?
– How do they view the school, its strengths and weaknesses?
– What trends are they seeing?
– What suggestions do they have for the school?
Survey of Education Consultants
What the school found
– School is well known in surrounding area, but not at distances past 3-5 miles
– Consultants are confused about the school’s stance on students with learning differences
– Consultants are seeing different entry patterns for schools in the region
Conclusions
The results of this study enabled the school to:
– Pinpoint where to target marketing
– Understand what resources are needed to effectively market the school in this economy
– Be clear about tuition elasticity at the school—i.e., which families is the school likely to lose at what increase levels
– Gain a fairly clear picture on how the school is perceived in the marketplace
– Get a sense of changing trends and what the school needs to do to accommodate those
Conclusions (cont.)
Understand parents’ satisfaction level overall and target those areas in need of improvement
Gain a clear picture of how likely current parents are to recommend the schools to others
Gather ideas for non-tuition revenue streams
So…What does this All Mean for a Trustee
Comprehensive market research can help you to:
– Forecast tuition revenues
– Forecast financial aid need
– Forecast giving
– Budget dollars for those programs that attract and retain students
– Identify non-tuition revenue opportunities
– Plan for future school development
Some Closing Thoughts about The Economy: Steps for Boards to Take
Identify the key metrics that really reveal how you are performing in key areas.
Reprioritize initiatives. Focus on those initiatives that will have the most immediate impact on recruiting and fundraising.
Budget for a smaller class. It is much better to budget for a smaller class now than to cut budgets later.
If you need to cut or trim a budget, don’t be fair—be strategic. Use the recouped dollars to invest in other programs with greater market interest.
Work hard to address families’ concerns and issues. Position yourself as a resource and a partner.
– Excerpted from Wise Moves in Tough Times, Dr. Robert Sevier, Stamats
Some Closing Thoughts (cont.) Conduct a tuition pricing elasticity study. These studies can pinpoint
how planned increases in tuition will impact market share.
Focus on recruiting and marketing activities that you know work. Do not invest in new initiatives that will drag resources away from proven strategies.
Hire and deeply train the best recruiting, marketing, and fundraising staff you can. There is nothing more helpful than talent.
Identify your top four or five competitors and gather competitive intelligence.
– Excerpted from Wise Moves in Tough Times, Dr. Robert Sevier, Stamats
And some final thoughts on the value of acquiring new information…
Every creative act involves
a new innocence of perception
liberated from the cataract
of accepted belief.
-Arthur Koestler
