Transcript Market Research: Measuring Alumni and Parent Attitudes

Decision Making in the Board Room:
The Data Connection
Donna Orem, [email protected]
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 anecdotedriven
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?
100.0%
475 responses
80.0%
67.7%
58.7%
60.0%
41.3%
40.0%
32.3%
62.7%
37.3%
58.1%
41.9%
57.4%
42.6%
51.4%
48.6%
20.0%
0.0%
Less than
$100,000
(n=31)
$100,000$149,999
(n=75)
$150,000$199,999
(n=166)
Yes
$200,000$249,999
(n=86)
No
$250,000$299,999
(n=47)
Greater than
$300,000
(n=70)
Prospective Families :Is the Economy Affecting
Your Choices?
100%
90%
486 responses
80%
70%
60%
63.2%
57.6%
56.9%
49.4%
50%
40%
40.3%
33.3%
31.1%
29.9%
33.3%
28.2%
30%
20%
10%
63.4%
62.7%
9.1%
10.4%
12.0%
6.9%
3.9%
8.5%
0%
Less than
$100,000
(n=33)
$100,000$149,999
(n=77)
Yes
$150,000$200,000$250,000$199,999
$249,999
$299,999
(n=167)
(n=87)
(n=51)
No
Unsure/Don't Know
Greater than
$300,000
(n=71)
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 “realworld” 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 Center
In November 2006,
NAIS partnered with
Easy Analytic
Software, Inc. (EASI)
to create the NAIS
Demographic Center
DEMOGRAPHIC CENTER
Basic Reports
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 CENTER
Additional 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
Changes in the District of Columbia
School-age Population
116000
114000
112000
110000
108000
106000
104000
102000
The District of
Columbia
recorded 3.04%
decline between
2000-2009 and
is forecasted to
record 3.58%
decline between
2009-2014.
2000
2009
2014
Growth in School-age Families w/ Income
Of $350K+ in the District of Columbia
1000
900
800
700
600
500
400
300
200
100
0
2000
2009
2014
Age 5-9 Age 10-13 Age 14-17
Growth in Hispanic and Asian
Populations in the District of Columbia
80000
70000
60000
50000
2000
2009
2014
40000
30000
20000
10000
0
Hispanic
Asian
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
Thank You!
 Donna Orem
– Chief Operating Officer
– NAIS
– [email protected]