What do you do when existing and prospective customers are under increasing financial pressure?
Here are five practical tips for school marketing in a recession.
Get into the data
Independent schools in South Africa are feeling the effects of the weak economy. Unemployment and emigration are trending in the upper end of the market, exacerbated by growth of players and new models. Consumers are more price sensitive, less brand loyal. They’re willing to settle for less-preferred alternatives.
There’s no quick fix for schools with admission and retention problems from these trends.
But building and maintaining strong brands, recognized and trusted by customers, is key to reduce risk. A market downturn is one of the best times to refresh strategies.
The marketer is likely to be heard when times are tight and solutions scarce. Leaders welcome ideas, insights, solutions. A refresh doesn’t mean a radical change in the brand positioning. But it’s a great time to push advantage in the areas of opportunity.
Market research is particularly valuable now, especially independent qualitative research. Find out what’s worrying customers, what’s driving them, what alternatives are attractive and how you can help. Innovations spring out of this sort of discussion. Contact me for a proposal on market research.
Do a price check
The first place we often jump to is price.
And there are innovative pricing strategies that can bolster numbers. However, a long term view is important. Consider:
- Temporary price promotions
- Price changes
- Price increase freezes
- Financing/loan offers
- Financial aid
- Structuring the pricing differently
These are ideas which can be effective, if they do not disrupt promises made to existing loyal customers or create an environment of pricing uncertainty. Ensure you have a written policy. Have a look at my blog post here.
A general guide is to use pricing instruments to add value to the organisation rather than to remove value. Once you are seen to be negotiable on price, especially for a high value service, you are on a slippery slope. If you are interested in more on this subject, please comment or message me. Consider customer psychology in pricing during a downturn. It’s a fascinating area.
One request on this item: The marketer’s input in pricing is essential. The marketer is the voice of the customer and will have a different perspective, but important to hear!
Take a fresh look at your product offering
We’ve touched on market research and pricing. What about your product?
I will use Ansoff’s Matrix as a model, because it helps to structure the 4 options in order of risk. See the image below, courtesy of Tutor2You.
- Market Penetration is when you use your existing product and sell more of it to your existing market. This is the lowest risk option.
- Product Development is a close partner to the first option, it is selling new products to your existing market. Higher risk, but not highest.
- Market Development is selling existing products to new markets. Also higher risk but not highest.
- Diversification is highest risk. This is selling new products to new markets.
Each of these 4 are possible steps to take in a market downturn. We are seeing SA boarding schools attracting international students due to our affordable price of schooling vs UK & other markets. That’s a market development strategy. New subject offerings or curricula would be product development.
This tool is useful to run a board or management workshop or a project to seek areas of growth. Houseway Consulting can help here.
Develop a rock-solid retention strategy
Customer retention marketing is another growth strategy for an economic downturn.
By nurturing existing customer relationships, you are ensuring that your brand is top of mind when opportunities arise for new admissions. “The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%.” (Marketing Metrics – Forbes) So what steps can you take?
- Understand the expectations of your existing customers
- Identify gaps between these expectations and actual delivery
- Use the information to take action on service delivery
- Get buy-in from your management and staff team regarding customer service
I find that in independent schooling, parents invest a lot of effort in choosing a school for their children. It is a decision that involves emotion, discussion, attending open days and online research. It can take years. But leaving a school is more likely to be a decision that is impulsive, based on one unhappy experience, although the signs may have been there for a while.
A retention strategy ensures that everyone is working as a team to deliver on the brand promise.
Innovate with tech
Innovation can be a game changer in a market downturn.
Consider how technology can help. Especially if it enables your marketing and admissions strategy to build your pipeline.
Lead generation software is an example:
- This software automates the capture and distribution of lead data (sales enquiries) from online channels (your website, Facebook, email etc).
- Offline channels can also be included.
- After lead information is captured, the use of lead management software enables sales teams to efficiently nurture, score and track leads to increase qualification and conversion rates.
- This avoids any admissions enquiries being forgotten, lost or duplicated.
- Different software options are available, with a range of prices. Some are more suited to education than others.
Probably the biggest challenge for schools is budget allocation to an item previously unplanned. But it is an IT purchase bringing return on investment and innovation. As with any technology, it has its limitations, and needs careful selection and training.
Too much automation, or bad automation, can damage brands and customer relations.
A market downturn is an opportunity to prepare for the upturn, which eventually arrives. Not everyone will be ‘sharpening the saw’ in a recession, using the term Stephen Covey uses in his 7 Habits for Highly Effective People. But this is the time to invest in development of the marketing strategy and the team involved, rather than waiting it out.
I hope you found these five tips useful! Do you have any others to suggest?
I'm Keryn House
I enjoy creating marketing anecdotes and visuals related to my horse as there is a lot to be learned from animals, and this provides a unique context to my writing. My horse Slick (aka Sports Express) has been with me for many years and is a source of inspiration and relaxation for my strategic mind. He lives on a friend’s farm in KZN and I see him twice a week.
Follow me on social media by clicking on the buttons below.