Introit

Bundling: Beware Marketing Backfire

We've all seen it over the past few years: admission offices that offer "incentives" (call them "freebies," if you'd like) to families to come to open houses and other admission-focused events. One school I know of (Pat Bassett has it featured at the end of one of his 'road show' PowerPoints) even went to the extreme of offering "free tuition" for the second semester of the current academic year, in order to grow enrollment.

There is a psychology involved with this tactic. Alexander Chernev, associate professor of marketing at Northwestern University's Kellogg School of Management, has done a good deal of research on the concept of "bundling" (a combination of a single expensive item and a cheaper one). His findings, co-authored with Aaron Brough of Pepperdine University, show that the psychology of bundling can backfire: quite often, actually. Schools that are following this tack should pay attention.

Basically, Brough and Chernev's research shows "that bundling expensive and inexpensive products changed what people thought those items were worth. Even when they found both items in a bundle attractive, they were willing to pay less for the bundle than for the more expensive product alone. [They] also found that people were less likely to buy bundles that combined expensive and inexpensive products. [...] This suggests that the popular strategy [I'd call it a tactic] of adding premiums to products can sometimes hurt, rather than increase, sales." (HBR, June 2012, 30).

The underlying driver is a process called categorical reasoning, which holds that "people naturally tend to classify products as either expensive or inexpensive, and this categorization influences how they judge products. When an expensive item is bundled with an inexpensive one, people categorize the bundle as less expensive, and this lowers their willingness to pay for it."

Marketers (this would certainly include admission offices in independent schools that are striving to increase enrollment) follow conventional wisdom, which suggests that bundling products helps to increase sales (tuition dollars). This does hold true in numerous situations, but it does not hold true across the board. "Although categorical thinking is a pervasive tendency, it has boundaries: People categorize along just one dimension at a time. So if you get people to focus on nonprice attributes, the price effect will go away [schools, for example, could focus on values, character, signature programs, and the like]. Our research shows that when customers [families] focus on one of those attributes, they're much less likely to categorize items in terms of their expensiveness and consequently less likely to devalue combinations of items from different price tiers."

Question: when you've got board members who are marketers or work in marketing, what do you think their default position would be, in terms of a school's falling enrollment? Offer something in a bundle, to provide incentives to attract families!

What the marketers are relying on is people's preference "for making simple binary decisions in the face of complex information. [...] People rely on decision short-cuts, or heuristics, that trade accuracy for reduced cognitive effort." What these Chernev and Brough highlight is that such heuristics do not work in all scenarios.

I would submit that independent school admission efforts represent such a scenario in which traditional heuristics don't work along the same lines as they do in other purchasing situations.

Schools that are effective at getting families to focus on nonprice attributes, as listed above, are going to be more successful at breaking through the psychological boundary of "categorization". Schools that are offering really bad bundles (free t-shirts to the first 25 families, or free tuition for one semester followed by full-price the next semester) are doing themselves no favor in attempting to attract families; the probability that their effort will fail is extraordinarily high because they have just placed a significantly inexpensive item in the same bundle as a high tuition, meaning that they've forced families into categorical reasoning. That reasoning will result in families ascertaining that the value of the more expensive product is actually diminished.

Educators as School Marketers: Exploring the Potential Disconnection

Given the need for independent schools to attract and retain qualified students and families, it should come as no surprise that the last few years have likely prompted many conversations in which teachers have been asked to be more sensitive to and proactive in the marketing of their school to current and prospective families.  Unfortunately, many teachers are quite confused by such requests and simply fall back on “doing what I always do” in hopes that such actions fulfill the request.  Such reactions highlight a disconnection between the teacher’s role as instructor and the need to assume a more conscientious role of marketer.

I don’t blame teachers for feeling confused.  After all, I doubt many of them had any formal marketing training as part of their teacher preparation.  Certainly a course in school and community relations may be helpful, but as a marketer?

Probably not.

As an administrator at an independent school that has asked its teachers to be more conscientious of their marketing role, I have spent the past few years reflecting on this issue.  My reflections generally revolve around a few questions.

Why might teachers feel a disconnection between the role of classroom instructor and school promoter?

 

Is there a way to make the connection between classroom instructor and school promoter that makes logical sense to the teacher?

 

If not, why not?  If so, what strategies can a teacher use to make that connection?

This post shares my thoughts on these questions.

I believe that the reason some teachers feel a disconnection between the role of classroom instructor and school promoter (or marketer, evangelist, etc.) is a matter involving the evolution of what an educator is today.  Today’s educator is trying to operate effectively in a period which will likely be identified by the access to choice, desire for change, and ease of networking.  It is an era that continues to force us to reflect upon and leverage the power of relationships and communication.  Thus, what society now sees as successful, necessary, and desired is undergoing a change.  Most noticeably, this change involves a growing desire for deep and meaningful experiences and interactions which produce a desired sense of distinction and specialness.  I suggest this is a result of almost unlimited choice which demands that consumers reflect much more on, “Why?” one option is more attractive than another.  Herein lies the basic problem.  Before people had access to so many options, “Why?” was not nearly as important as answering, “What?”.  You needed a new shirt, you went to the mall and bought one from the stock available.  Now, you can get a new tie from any tie maker in the world over the Internet.  In order to choose one from another, “Why?” becomes a much greater factor.  

What does this have to do with educators?  

Well, for as long as any living educator can remember, teachers have worked (and have been taught) in a model of education that does not sync well with the growing market for distinction, the market that needs a clearer answer to, “Why?”.  It is a mode of operation that follows a set way of thinking about, preparing for, and delivering one’s class.  I will refer to this model as the factory model and its related mode of thinking as the factory mode. Therefore, this model of education, and the related mode of thinking that accompanies it, has become part of the professional genetic code of educators.  It is part of the educator’s DNA.  This mode of thinking, while useful in clarifying, “What?”, but falls short of clearly answering, “Why?”.

The factory model leaves little room for, and certainly doesn’t place much value in, expanding the nature of a class  beyond the curriculum - no matter how artfully it is delivered.  The teacher’s role in factory mode is limited, teach your course and make sure students are ready for the next course.  There is nothing inherently wrong with that role.  As matter of fact, effectively delivering content is an essential part of teaching.  However, when we ask teachers to expand the nature of an effective class, we then move from content and curriculum to experience and relationships, two areas the factory model cannot and does not address.  There needs to be a heightened awareness of the other pieces of the educator’s DNA to provide the balance and approach to delivering a great class that includes relationships and deep, meaningful experiences.  In other words, the environment created by deep and meaningful experiences helps students and parents answer the question, “Why do I choose this school?”.

These suggestions may seem easy to understand.  I would agree that they are easy to understand, but often circumstances make them hard to employ.  Especially when circumstances prompt a strong response from the factory mode that is deeply embedded in the educator’s DNA.

When things are going well, we naturally are inclined to avoid disruption.  The message most teachers hear is “keep doing a great job in class” or “keep up the good work” which, as open to interpretation as it may seem, for many teachers translates as “keep being a good factory worker.”  

However, in recent years the economic reality many schools face has caused them to rethink operations and work like never before to retain and attract families.  These have been years of uncertainty and pressure to perform at the highest levels, often asking every member of the school to act as “adjunct marketers and school ambassadors.”  Stated a different way, schools need teachers to be more than good factory workers.  In essence, we are asking teachers to ignore a strong and significant piece to their professional DNA (the factory worker) and become more of the artist, evangelist, innovator, and magnetic creative.  We are asking teachers to transform their classes from solely places of learning into places of learning that serve to engage students and families in making deep and lasting connections with the school.  We need teachers to embrace their “intellectual celebrity” and become linchpins for our schools.

Certainly, the switch away from factory mode is not easy.  So, a set of guidelines or examples to help teachers understand exactly what is involved in this new approach is helpful.  For some teachers, this requires an acceptance of a dual perception of their work and a commitment to an approach to their work that is conducive to the creation of deep and meaningful experiences.

The Perception of the Work

Many teachers talk about their responsibilities, but rarely do they speak of their cause.  I believe this is directly associated with the factory mode.  Responsibilities are external.  They are dictated to us as part of the job.  They represent a contractual agreement between school and employee.  Typically, responsibilities are specific and measurable.  There is a place for responsibilities, but that place is part of a market agreement between school and employee.  With responsibilities, there is an expectation of immediate reciprocity.  You fulfill your responsibility and you get something in return (a paycheck).

Your cause, though, is personal.  You chose it.  It defines you as a person, not as a worker.  The only contract you have with your cause is with yourself.  Any agreement involving your cause is social.  There is no immediate expectation for reciprocity.  You give of yourself for your cause because you recognize the value in sharing your talents for the betterment of others.  You may not even get a “Thank you”, at least not right away.  That’s “ok” because you do not engage in your cause for the rewards.  You engage in your cause for your contribution.

In order to suppress the factory mode and embrace the marketer inside, teachers need to accept their responsibilities, but adjust their approach to their class as their cause.  Perceiving one’s class as their cause (instead of their responsibility) begins to place the emphasis of the work on the receiver (student) and not on the giver (teacher).  

In other words, if you view your class as your responsibility, you are doing YOUR job, fulfilling YOUR obligation, serving YOUR need to collect a salary.  Again, there is nothing wrong with being paid a fair wage for doing a good job.  However, viewing your class as your cause places the emphasis on the receiver.  Your class is serving THEIR needs.  You are responding to THEIR issues.  Your role is to demonstrate that your class is worthy of THEIR following and participation.

Your cause is student centered.  Your responsibilities are yours alone.

Accepting the cause perception, and the social agreement from which it operates, is not a denial of the factory mode of thinking and the responsibilities that accompany it.  After all, the market agreement that brought a teacher into the classroom must be honored and there does need to be some markers set up for the teacher to measure content delivered progress.  Finding the balance between the two, or applying the correct approach to any given situation, is the key.

The “Open House Culture” in Your Class

Once you begin to perceive your class as your cause, you are in the right mindset to build an inviting and engaging culture in your class, one conducive to deep and meaningful experiences.  To do so, I suggest borrowing the characteristics of one of the more enchanting events at schools, the Open House.

Open house is your school at its best.  Your doors are open and you welcome new prospective families to tour and learn more about your school.  Ultimately, successful open house events prompt the attendees to take the next step in the admissions process with the eventual desired outcome being a new enrolled student.  Your class’ “Open House Culture” operates similarly.  In an “Open House Culture”, you are presenting your class (your cause) at its best.  An effective “Open House Culture” prompts students to “take the next steps” towards becoming an active contributor to your cause (your class).

Borrowing from the numerous Open House experiences I have had, I suggest their are five qualities of effective open houses and also provide the ingredients for an “Open House Culture”.  These qualities are: friendly, trustworthy, reliable, responsive, and interactive.

The Director of Admissions at my school frequently reminds us all that every interaction with parents and students is an opportunity to either improve retention or motivate that family to recommend a friend.  Having a cause mindset and nurturing an “Open House Culture” in your class are powerful foundations upon which you can clearly address the dual role of educator and marketer in your school.

Final note:  If you and I share some of the same reading preferences, you probably noticed the influence of a couple of different people in this post.  Over the past few years, I have found the writing of Seth Godin and Guy Kawasaki among the most influential.  Kawasaki’s Enchantment has become my “go to” guide for winning the hearts and minds of people.  Godin’s Linchpin, Tribes, and practically every title from his work with the Domino Project are invaluable reminders and prompts for us to embrace our ability to do great work.

Troy Roddy is the Head of Middle School at Wakefield School in The Plains, VA.  In addition, he frequently shares his thoughts and reflections about leadership and education on his blog, The Art of Education.  Dr. Roddy is the author of two eBooks, Paying Attention: Thoughts on Communication in Schools and Foundations: Examining Vision, Beliefs, Mission, and Philosophy.  Troy invites all independent school educators to join his LinkedIn group, the American Society of Independent School Educators.

 

 

 

 

Supply Chain in Independent Schools

The Financial Times dedicated a section of the paper this past week (Jan 26, 2011) to the study of supply chain, in a special report called "The Connected Business."

"Supply chain" is certainly not a term that we use in the independent school world, yet we do have such a thing: it's called Admission. As I read through the lead article, "Supply chain is a strategic discipline," I couldn't help but consider how our admission offices serve as our supply chain managers, and how they are at the forefront of the "push to build sustainable and profitable businesses." In other words, they bring us students, whose families pay tuition. Without tuition revenue, our business model simply doesn't work. Strong schools have outstanding leadership in the Admission Office, and their professional development is as important as that for any faculty member.

With increasing competition from "free" (i.e., taxpayer-funded) public and charter schools, the Admission Office has never been more important. The admission cycle is really a year-round endeavor. Consider the importance of communication--the office is trying to reach more people than ever, and that includes the current parent body, which serves as a pipeline for new applicants. We all know how important word-of-mouth is. Just as it is important for supply chain managers to have relationships with people on the ground in all of the areas where a business sources product pieces, so too do we need to have relationships with multiple constituent groups. Social networking and electronic communications are nice, but we are in a people-centric business, and it's important to have face time with people. We need to show them that we know them and love them.

One of the things the Admission Office challenges us to do with regularity, as a supply chain manager should do, is to revisit our product offerings; in other words, our curriculum, from top to bottom. Those offerings are the "inventory" of independent schools: what do we have within our walls? What offerings make us so special? And it's not just about curriculum; it's about character development, extracurriculars...the value-added "stuff."

In this economy, consumer demand for quality is high, and our supply chain (the Admissions Office) needs to continue to build its network inorder to suit such high-demand customers. What are we all doing to assist in the building of our supply chain?

There is much at stake with our "supply chain," as article author Paul Taylor points out: "Today, supply chain competence has become a competitive weapon essential to success in launching products, entering markets, and responding to competitive threats."

Assessing the AP Program

The Harvard Education Newsletter (26.3, May/June 2010) contains an article that is meant to serve as a further exploration of the book, AP: A Critical Examination of the Advanced Placement Program (2010). The book in question is a compilation of research on AP programs across the nation, including some opposing viewpoints on interpretation of data and/or trends.

The Newsletter article, an interview with one of the editors of the book, is useful to independent school educators and school leaders (as well as boards) because it offers a perspective on the AP that is not necessarily the perspective that we have in independent schools. Following are some of the findings, which many of us in independent schools knew (or perceived) already. For some, I have added a remark or a question that follows.

• the number of AP courses offered is being used as a way for college admission offices to differentiate one high school from another (i.e., determine which one is more "rigorous"). This approach creates a race to see who can offer more courses, but are they appropriately staffed and do the kids find success on the exams?
• students can take an AP course as the first course in a given subject area, rather than as the culmination of their efforts in that subject area (increasing flexibility in timing of when AP courses can be taken). This approach expands the number of opportunities for kids to take an AP exam, but has a negative result on the scores.
• one of the thoughts behind AP is that, if a student were to take an AP in subject area X, then s/he might be more likely to major in that subject in college. What about the kid who has five to eight APs (or more) on his/her high school transcript? What does that mean? Does it merely mean that that particular student was out to "game" the admission office?
• the editor interviewed says he believes that, if any credit at all is to be given, it should be only for scores of 4 or 5; that accepting 3s for credit means a disproportianately higher percentage of students will reach 3 or higher, thereby receiving credit. I would argue that accepting only 4s or 5s now enters into the domain of "AP inflation." If so many more kids can earn 3s, does that say anything about the lack of quality/rigor of the exams? Or, conversely, might it suggest that students today are smarter than they were one generation ago?
• regarding graduating college earlier on account of having so many AP credits, it is a rare occurrence. So, where's the power of that argument?
• the trend of high schools seeking to offer more AP courses remains intact; it will continue to happen. The "outcome" of this research suggests that the schools should try to ensure that the AP courses are high-quality in nature and that the teacher has adequate professional development so as to ensure a solid student experience.
• AP courses can have wide variations between AP scores and course grades. Therefore, argues the interviewee, the AP scores should reflect the strength of the actual course. In other words, if the scores are low, so is the quality of the course, and therefore the instructor. The course should not exist if it cannot be staffed appropriately. At least, that is the logic that ensues from what the editor states.

The reasons, therefore, that public high schools and independent schools offer APs, I think, are rather different. We share the college admission "race" with each other, but it seems to me that the independent schools that choose to offer AP courses do so for the traditional reason of academic rigor. But has the "academic rigor" argument changed in fundamental ways, so that independent school AP offerings no longer carry the weight they once did?

Here we find a discussion that has picked up steam in recent years.

The "Beyond AP" schools ave been posing many good questions about this inverse relationship regarding the AP. If public schools (and I'm not criticizing them; I'm merely showing how our philosophies and perspectives are different) are encouraged to offer more AP courses because it bespeaks their "rigor" as an institution, would doing the same thing benefit independent schools?

Of course not. We have self-selected, by ontological means, to be rigorous schools. If, then, we are rigorous from an ontological perspective, what do our AP courses mean when weighed against those of a public high school with which we may compete for students?

So, to read this book and the concomitant interview in the newsletter, one sees a side of the AP world that is perhaps a bit foreign to how we think of APs in our schools. I'm not convinced that college admission offices can continue to weigh programs equally when comparing them (i.e. public schools and independent schools) in terms of their effectiveness with APs, given that more and more public high schools are offering APs as a means of showing their "rigor."

What is your school's contribution to that question?

Deal...Or No Deal?

No matter how you feel about him personally, Mark Zuckerberg is getting a lot of press lately, the most recent being Time magazine's naming of him as Person of the Year (2010).

The Financial Times ran a lengthy article on him last weekend (Dec 4-5, 2010), detailing his evolution into 'serious' chief executive, one who is out to change how business is done all across the globe. The article's author focused on a new feature at Facebook, called Facebook Deal, whereby the user "checks in" to his/her favorite haunt (local shop), and that shop provides a discount to the Facebook user, in the hope that the discount will entice the person to buy more. For example, The Gap gave away 10,000 pairs of jeans to the first 10,000 Facebook users who "checked in" at Gap stores. Think of the possibilities: stores now have direct access to the customer while the customer is actually IN the store! Coupons, promotions, individualized attention, etc. As one consultant said to the FT author, "He just changed how local commerce works." And that was before lunch!

I have to wonder how and when Facebook will truly impact education. To be sure, our students use Facebook with ever-increasing regularity, and there can be instances of cyber-bullying and the like. What I'm talking about, though, is the delivery of educational content, educational choice, and the like. What if Zuckerberg were to take Facebook Deal to the level of impacting education? Same concept: "check in" as part of an admission tour at an independent school you might consider attending. By checking in, the school can "give" the student some promotional material, and determine what kinds of courses the student might be interested in, etc. I'm sure that admission departments could find myriad uses for a Facebook Deal.

Symptom or Root Cause?

Your school is suffering from a significant drop in enrollment. Your leadership and your board look at falling enrollment and develop multiple tactics to address that fall. The tried-and-true "drop the price" mentality is applied because, after all, that's what works in the business world: drop your price, and generate enough sales to at least break even, if not overshoot the difference, ending up in the black.

Strangely enough, though, it seems that no matter what you do in terms of marketing efforts, admission events, and financial tactics, you can't seem to generate enough interest...and your enrollment declines even further.

What's going wrong here?

The issue is the inability to discriminate between a symptom and its root cause.

Too often, everyone focuses on curing the symptom with a band-aid rather than identifying and correcting the root cause. In the case of a school that continues to lose enrollment (and its concomitant financial well-being) despite valiant attempts at tactical adjustments, the leadership has failed to acknowledge what must be the obvious root cause: the product is stale and non-competitive. The luster is gone; what remains is ho-hum.

Ho-hum doesn't sell in this kind of economy.

Curriculum Overhaul: I Double-Dare You

The Financial Times ran an article on Monday that is germane to the conversations we're having in independent schools right now. As author Linda Anderson writes of Richard Lyons, Dean of the Haas School of Business at UC-Berkeley, he "recently announced an overhaul of its [Berkeley's] core curriculum."

Think about how such an announcement would go over in your school community. It would take a carefully planned approach, not unlike a mixture of strategic planning and development-style campaign feasibility studies.

"Sweeping changes have been announced that emphasize creativity, experimentation and problem-solving as well as experiential learning. Behind this revamp are four defining principles, the bedrock on which the redesigned program stands: question the status quo; confidence without attitude; being students always; and thinking beyond yourself."

Naturally, for independent schools, the question remains: how do we marry our extant curricula with these emphases? After all, we cannot abandon entirely what we have; we need a framework, and most of us will want to remain faithful to the tradition/spirit of the school, while acknowledging the needs of our graduates.

As Lyons says, what is needed is "a person who can think outside, who says there has got to be a better way to do this and I am willing to step outside that boundary."

Our brick walls in independent schools will be the usual suspects:

(1) will we compromise our admission standards in order to attract this sort of student?

(2) how do we grade students in this redesigned system?

(3) will we lose our "perceived ranking" in our community?

(4) will our SAT/ACT scores be affected adversely by this approach?

Success will come from visionary leadership, new mission statements as tools of guidance, and a cultural reshaping of independent schools from the inside-out. It will also come by means of a willingness to confront the aforementioned brick walls (not an exhaustive list, to be sure). This effort will be people- and time-intensive, and it may represent the defining moment of an early 21st century headship.

As Lyons says, "The world feels different from the world of my parents. It seems to me that as I look out into the future, there are [many] unsustainabilities in the system."

Meaning-Based Computing

The May 10 issue of Forbes has an interesting two-page ad by a company called Autonomy, "The Dawn of a New Era -- Meaning Based Computing."

The writers of the ad proffer that "we now live in an era of unstructured data." They point out that companies that keep their data in rigid, structured databases will have difficult succeeding in a world that, from a data point of view, is seemingly chaotic. Their solution is an approach called Meaning Based Computing (MBC), which has been sweeping every industry.

I wonder how schools might benefit from this approach to mining what appears to be unstructured data, or if the independent education industry is different from all others (highly doubtful). Like many other businesses, we are using data-collecting websites, Facebook, Twitter, YouTube, and the like (some schools do this more than others, obviously). These social networks turn the tables on traditional data-gathering strategies, meaning that customers (families, in our case) are more in control of how they communicate with our schools...and about our schools...on these networks, apart from how they communicate with us via our website, email system, etc.

The authors of the ad provide a scenario that should be of interest to us: "After observing a dramatic spike in positive sentiment on Twitter around a particular product line, a company automatically updates its homepage to give that product more prominent billing. The company then tests which messages about that product are most effective in engaging customers on its website, and then passes along those insights to agents in the call center, and updates its online advertising campaigns. By injecting this understanding throughout every phase of the marketing cycle, a business can maximize revenue across all channels."

To translate this concept in school terms, let us suppose that your school introduced an amazing service learning program, and that you informed your constituents about this program via multiple communication vehicles. If your school then received real-time (or as close as we might get) results that showed positive buzz about the program, you could update your digital, real-time media to reflect that positive sentiment. The next step would be to test several messages about the service learning program to see which ones push the most traffic to your website, then allow those same messages to permeate your communications. If you could do this each time you propose something innovative and/or meaningful, it would help your communications to remain fresh and interesting, and would result in increased attention to your school (i.e., your product); that increased attention, if mined correctly, could result in increased applications to your school.

This approach necessitates more time and dollars allocated to marketing and communications, but I submit that, in the "new normal," such a hard turn in this direction is necessary, and it may remain so for a long time. It would require education of the faculty and staff as well, as everyone would be participating in this marketing effort. Admissions is the name of the game, and everything that we can do to 1) retain current families and 2) attract new families will be central to our existence, going forward.

Values, Values Everywhere

If there's one positive thing this struggling economy has produced for independent schools, it's a renewed focus on values. When folks are feeling down and out (even if they haven't been personally affected by the economy), they tend to focus on the importance of a values-based education. Therein lies the market niche for independent schools, but it's a niche that tends to be ignored during boom times.

If you're wondering where to concentrate your efforts these days for enrollment and marketing, keep your eye on the value of what your school offers. People will continue to pay price X for an independent education during an economic downturn, but they'll only pay it for what matters to them most -- their values system.

The Paradox of the Middle of the Market

Is your school busy trying to continue to meet "the middle of the market"? Here's a post from Seth Godin today on this topic.

Basically, targeting the middle of the market is one of the most challenging ways to keep your school afloat in today's marketplace. "The middle" is not the leading edge of the market, but rather the realm of complacency and "good enough" attitudes. Think of the implications for your school if this is your target audience...