NAIS TrendTalks: San Francisco
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1 NAIS TrendTalks: San Francisco January 12, 2013 Lick-Wilmerding High School Jefferson Burnett Vivian Dandridge Amada Torres
2 HAPPY NEW YEAR!!!
3
4 What s Ahead this Morning Trendbook Admission Marketing in an Era of Financial Instability Roundtable Discussions and Report-outs Questions and Wrap-up
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7 Admission Marketing in an Era of Financial Instability: What s Ahead Monitoring Our Landscape K-12 Demographic Landscape Global, National, Regional Economic Landscape Education Competition Landscape Independent Schools at a Glance Niche Marketing and Micro Climates: Understanding and Communicating with (Current and) Prospective Parents Who Are They Pilot School Reflections and Action Suggestions Board and Leadership Team Tools and Approaches
8 It s about Financial Sustainability Identify our four primary revenue streams Tuition Gifts Endowment Other
9 Our Landscape So is anyone worried about the long-term financial sustainability of your school (relative to those four rev streams)? If yes, what factors might affect your school s future? Economic outlook Tuition elasticity Admission pool Socio-economic diversity Full pay Competition Brand Mission match with parent/student pool Demographic
10 Key Trend Areas Changing student population Slow economic recovery Increased competition
11 Demographic Landscape
12 Demographic Landscape
13 Source: NAIS StatsOnline, Student Diversity
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17 Economic Landscape 2% payroll increase SS; medicare 3.9%; dividend income Highest bracket up to 39.6% $400k/$450k Chari deduc ok BUT: PEP ($3,900 individual) phaseout over $250k/$275k/$300k BUT: Pease 3% on itemized deductions in excess of the $ threshold What s next? Debt ceiling Spending cuts How pay? Rev increases? Chari Giving; Benefits healthcare, 401k/b etc.?
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19 Economic Landscape
20 Recovery Performance-San Francisco, Q Source: Brookings, Metro Monitor, January 2013
21 Education Competition Source: Cato Institute, The Charter School Paradox, August 2012
22 Education Competition Charter Schools in California Enrollment 410,157 % over all public students 6.17% # of charter schools 1,008 Cap: One hundred additional charters added each year. State provides funding for charter schools Source: The Center for Education Reform
23 Education Competition Charter School Growth in California Source: California Charter Schools Association
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25 Education Competition Award-winning K¹² curriculum Full-time, tuition-free online public school option Weekly classroom-based instructional programs in Math, English, and other activities Face-to-face meetings with California-credentialed teachers An active, supportive school community Extracurricular activities A robust Advanced Learner Program Program accredited by the Accrediting Commission for Schools of the Western Association of Schools and Colleges Subjects that are no longer offered in many programs: art, music, and world languages Students graduate with a high school diploma from a WASC-accredited program that meets all state requirements Source: California Virtual Academies,
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27 Independent Schools at a Glance Pulse Survey 9/12 Academic Year vs Inquiries: +2.0% Apps: -2.2% Signed enrollment contracts: -4.6% Academic Year vs Fin aid awarded: -9.4% more (first drop since 09-10) Fin aid apps: +1.8 % Student awarded fin aid: -1.0% Fin aid average award: -8.5% Academic Year vs Annual gifts: -8.5% Avg gift amount: +5.0% Number of donors: -1.4%
28 Independent Schools at a Glance How do these factors affect your market? Did you know that between Annual giving rose 10% Endowment dropped 8% Tuition rose 28% Fin aid recipients rose 31% Fin aid apps rose 31% Fin aid budgets rose 49% Source: StatsOnline Core Samples
29 Independent Schools at a Glance
30 Independent Schools at a Glance Day Tuitions-Grade 12, California % Change 25th Percentile $25,209 $26, % 50th Percentile $29,705 $31, % 75th Percentile $32,565 $34, % 95th Percentile $34,975 $36, % Source: NAIS, StatsOnline, Core Sample
31 Independent Schools at a Glance Day Tuitions-Grade 12, San Francisco % Change 25th Percentile $32,515 $32, % 50th Percentile $33,623 $35, % 75th Percentile $34,869 $36, % 95th Percentile $35,035 $36, % Source: NAIS, StatsOnline, Core Sample
32 Could this Be Our World at a Glance? An annual survey of colleges and universities released by Moody s on Thursday [1/10/13], found that nearly half of colleges and universities that responded expect enrollment declines for full-time students, and a third of the schools expect tuition revenue to decline or to grow at less than the rate of inflation. Moody s analysts say the problems are particularly acute at smaller, tuition-dependent schools and lower-rated universities, which have less ability to raise prices or attract students. The cumulative effects of years of depressed family income and net worth, as well as uncertain job prospects for many recent graduates, are combining to soften student market demand at current tuition prices, said Emily Schwarz, a Moody s analyst and lead author of the report, in a statement. [ ] Before the financial crisis of 2008, colleges and universities routinely raised tuition with little effect on the number of prospective students who applied. Some private colleges said that applications actually increased when they bolstered prices, apparently because families equated higher prices with quality. Source: New York Times, Colleges Expect Lower Enrollment
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34 Source: SSS By NAIS Who is Applying for Financial Aid? SSS Applicant Pool, Selected Years
35 Niche Marketing and Micro Climates: Understanding Your Parents Remember those factors affecting our four primary rev sources? What do you think most parents want when faced with a hefty (what s yours?) tuition bill? Value? Am I getting my money s worth (or whatever value means to the parent)? What does value mean to you? Prospective parents value proposition vs current parents value proposition is there a difference? PPV: Think about your perceived product value To be financially sustainable, your product (the education you provide) needs to be perceived as having enough value that prospective and current parents will pay the price you set (tuition and tuition plus annual increase). So, the BIG question is what s your PPV?
36 2011 NAIS Parent Motivations Survey Three phases: Telephone focus groups to inform the survey design process Market segmentation survey Communications survey to test potential messaging for target segments
37 Types of High-Income Parents 19% 10% Parents Who Push 10% Success-Driven Parents 28% 17% 28% Special Kids' Parents 26% Character-Building Parents 17% 26% Public School Proponents 19%
38 Types of Parents with High Growth Potential Parents Who Push (10%) want a high quality education with a challenging curriculum at a reasonable cost. 69% of them in public schools, but 86% of them would consider an independent private school, which is higher than other parents. Success-Driven Parents (28%) want to provide an education that will help their kids get into a top college and be successful in life. Half have kids in independent schools. 35% are in public schools, but 63% would consider an independent private school. Special Kid s Parents (26%) want a school that will address their child s unique personality and needs (style, learning, behavior). 54% are in public schools, but 68% of them would consider an independent private school. Character-Building Parents (17%) want more than strong academics; want child to develop a strong moral character, too. 79% of their kids are in independent schools.
39 Niche Marketing and Micro Climates: Understanding Your Parents What type of parents do you think you have? What about your prospective parents? Any changes in the past 5-10 years? Messaging? Some examples
40 Sample Messages Parents Who Push: An environment where your child is free to be challenged by teachers who are free to teach Success Driven Parents: Excellence, not standardization is the standard Invest in an education that pays dividends for a life time Special Kids Parents: You expect success. We make it happen Character-Building Parents: Sometimes an education is about more than just knowing the right answer, it s about knowing what s right In our classroom, integrity is part of every lesson. Put your child on the right path for life
41 Research/Pilot Schools School A: School B: School C: Is losing students and wanted to revamp its brand. Wanted to test its brand and understand its position in the market. Is sensing that its parent body is changing. Wants to attract the right type of families. School D: School E: Is noticing rapid demographic changes in the area. Wants more demographic and geographic diversity Is facing more competition and some demographic changes. Wants to assess its position in the market.
42 Pilot School C: Situation School challenge: is sensing that its parent body is changing. Wants to attract the right type of families. Enrollment is steady; some competition Wants to secure position in market
43 Pilot School C: Research Profile prospective (five years students who applied but denied or didn t go) and current parent base Identify key characteristics parents associate with School C Assess price sensitivity to potential tuition changes and how could impact market position and enrollment Survey: online, parent had to have at least one child k-12, income min $100k one child/$150k 2+
44 Pilot School C: Research Who are School C s prospective and current parents? Mostly Special Kids, Success-Driven, and Character-Building Parents That is Special Kids Parents: looking for school can address unique personality and needs (learning, style, behavior) Success-Driven: want to provide an education will help kids get into top colleges and be successful in life Character-Building Parents: want more than awesome academics; want child develop strong moral character
45 Type of Parents at School C
46 Current Parents Perceptions
47 Prospective Parents Perceptions
48 Reasons Child Doesn t Attend School C Prospective Parents Didn t admit my child Child not comfortable in environment Too expensive No extracurricular activities of interest Location was too far from home Curriculum was too rigorous Not a good value for the money Child wouldn't be successful academically School couldn't address child s learning style Not enough financial aid Curriculum/acad. stds. didn t meet expectations Other 6% 6% 6% 5% 4% 9% 17% 15% 12% 26% 30% 43% Prospective Parents More than $300k/year Didn t admit my child Child not comfortable in environment No extracurricular activities of interest Location was too far from home Too expensive Not a good value for the money Child wouldn't be successful academically School couldn't address child s learning style Curriculum was too rigorous Curriculum/acad. stds. didn t meet expectations Not enough financial aid Other 2% 4% 4% 6% 6% 6% 10% 14% 18% 28% 28% 29%
49 Pilot School C: Research Findings Awareness local schools A number of competitor schools had higher unaided and aided awareness levels Prospective/current slightly different awareness take Reputation didn t necessarily equate with most familiar; highest impression amongst competitors had med-low familiarity
50 Pilot School C Research Findings Sources of Awareness and Information Where do prospective parents find out about schools? Where do prospective parents get more info about schools?
51 Sources of Awareness and Information Source of School Awareness Sources Used to Gather Information About Schools Friends, family, neighbors School is well-known Current school counselor/advisor See campuses when driving around Internet search for schoools in area 44% 48% 38% 37% 32% 46% 92% 92% 88% 86% Campus visits Parents of curent students at the school Friends, family, neighbors The school's website Printed brochures and info from the school School comparison websites 7% 4% 6% 3% 59% 66% 39% 41% 39% 39% 36% 37% Current Parents (n=112) School consultant Your own experience/alumnus Advertising or mail from schools Other 12% 13% 11% 9% 11% 13% 10% 11% Current Parents (n=112) Phone calls to schools you are interested in Other websites School consultant Child's healthcare team Other 4% 1% 4% 0% 2% 3% 0% 1% 4% 2%
52 School C: Price Perceptions Price Perceptions Van Westendrop model diff price levels affect perception of a product/service. Low price = bargain, too low = poor quality ; too high premium quality but could reduce sales if exceeds budget of buyers Parents asked about tuition: cheap/too cheap/expensive/too expensive. Going price/point of Marginal Cheapness/Point of Marginal Expensiveness
53 Price Perception: Current Parents
54 Price Perception: Prospective Parents
55 Reflections and Suggestions Monitor national and local trends - Economic, educational, social, technological, demographic Monitor the competitive landscape Differentiate to create a competitive advantage Identify and segment target audiences Create messaging that will resonate with the target audience Conduct a brand and tuition elasticity analysis Brand attributes Monitor audience perceptions, needs, and desires Emphasize and develop programs that resonate with parents Create an effective marketing strategy with relevant messages Consider using dashboards and financial health indicators
56 Sustainability Tools NAIS demographic center, NAIS Survey Center, NAIS SOL, Federal Reserve Parent Motivations Survey Key Learnings from Pilots Targeted Parent Segmentation Survey To Come Dashboard Key Indicators
57 Roundtable Discussion Topics Leadership and Management Equity and Justice Enrollment Management Financial Aid Philanthropy Mobile Schools
58 Roundtable Discussion Report-outs Leadership and Management Equity and Justice Enrollment Management Financial Aid Philanthropy Mobile Schools
59 Thank You!
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