Marketing workshop by Mungo Dunnett for ISBA Conference, 13 May 2004

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Marketing the School Getting tough on revenue
generation
Mungo Dunnett Managing Director, Mungo Dunnett
Associates
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My approach

• I run a business that operates across a range of
  business sectors including independent schools
• What interests me are issues of strategic clarity
  and commercial efficiency
• The questions I ask are
• How can you operate more efficiently?
• How can you function more profitably?
• How can you generate more profitable revenue?
• In schools, this is usually the bursars
  territory
• Maximising the schools revenues is not soft stuff

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What we are going to cover

• Two topics
• 1) Marketing (generating profitable fee revenue)
• 2) Non-academic income
• But one overall theme
• These are commercial and business issues, and you
  will not succeed without focus and efficiency

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Marketing
Common pitfalls and misapprehensions
and how to fix them
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Marketing what it is

• An accountable science
• A means of driving profitable revenues into the
  School
• A means of understanding what the School should
  do and how it should invest
• A means of competing more strongly in the market
• This is not a strength of the Schools sector

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Marketing what it isnt

• Faffing about
• Guesswork and winging it
• Kangaroo management (or is it goldfish?)
• An easy job for underutilised or semi-retired
  staff
• Lovely new prospectuses
• Entirely non-distinctive advertising
• Brand building
• Everyone comes to the topic of Marketing
  with an open mouth

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Schools marketing a typical situation
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1) The Admissions process

• First question what is Admissions?
• The key sales channel for the schools main
  revenue source
• In a business, this would receive major scrutiny
• Enquiries arrive here
• E-mails or phone calls from parents who are
  already interested in the school
• This is the main contact point where parents
  enquire, discuss, share their plans and
  expectations and move
  slowly towards the point of purchase

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Instead of which a typical picture

• Understaffed (back-office support function)
• Firefighting to catch enquiries, handle
  queries, fire out prospectuses
• Treated as administrative rather than sales task
• Cost centre and necessary evil
• No evaluation of practices, conversion rates
• Whereas
• Ave value of enquiries 5 years x 8,000 to
  20,000
• Main battleground vs. your competitors

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2) Management by committee

• Marketing is rarely seen as a technical skill
• Its people stuff a bit of advertisinga bit
  of PR
• Its easily taken on by existing staff (or an
  enthusiastic youngster)
• Tends to be lack of continuity in management
• And in methods and activities used preventing
  cumulative effect over time, and preventing
  learning
• Almost invariably lack of measurement
• Or accountability
• Or even specific deliverables

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3) We know what they say about us

• Distinctive issue in Schools commercial
  behaviour
• The tendency to think that they already know what
  their clientele think
• How they make decisions and what needs to change
• It is very dangerous to make decisions without
  adequate market knowledge
• Schools are prone to making investment decisions,
  or strategic decisions, without adequate
  information
• This is due diligence you cant afford to be
  flying blind

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Usual sources correspondence questionnaires

• Schools who do not carry out research depend on
  parent correspondence
• Or on unquantified grapevine feedback
• Or on survey questionnaires a flawed tool
• Notoriously unreliable who tends to respond?
• Often lacking anonymity (natural reticence)
• Nearly always lacking insight (scores only give
  you basic relativities in benchmarking)
• Unable to identify parent groups, competitive
  tracking or the best commercial route forward

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4) Basic and non-distinctive promotion

• Why is so much of the marketing / advertising
  material so similar?
• Same material same media same claims
• Often, same reluctance to speak with real
  confidence
• Parents find it difficult to tell schools apart
  on the basis of their marketing
• Tendency to speak to all parents in material
• Because its easier? Cheaper?
• Because the school has not decided who to focus
  on and doesnt have the information?

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Sorting it out getting ready for marketing

• Three key tasks before the school goes off doing
  marketing again
• 1) Put someone in charge of all core revenue-
  driving activity
• 2) Instill rigour into the Admissions process
• 3) Get the facts research the market

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1) Overall responsibility

• Be pragmatic nothing tends to get done properly
  when there is not an overall owner for a task
• This is particularly true of marketing think of
  all those with an open mouth
• Do you need a qualified Marketing Director?
• Quite possibly not but what the jobholder must
  have is credibility
• This is a business development role supervised
  and rewarded on commercial deliverables
• The buck stops here

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2) Raising the game in Admissions

• This cannot be the poor relation any longer
• It is not simply another admin function
• There must be enough skill and enough time
• To handle enquiries properly (and elicit the key
  information about their preferences situation)
• To input the data into whatever system works
• To nurture incoming parents especially the
  FTBs
• To keep track of dormant enquirers
• This is your biggest commercial lever
  track conversion rates and expect results

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3) Getting the facts knowing where you stand

• You must know certain key information
• Which types of parents consider the school?
• What are their key decision-making criteria?
• How does the school perform on these criteria?
• Which are your strengths, and your weaknesses?
• Which other schools are in the consideration set?
• How do you perform vs. them, on these criteria?
• What are the trends? What should the schools
  strategy be? Where will it generate effective
  ROI?

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Customer Research

• Dont use focus groups utterly unreliable
• Dont do it yourself people wont be honest
• Telephone research, across 3 groups
• 1) Parents whose child has been at the school for
  at least two years (50 of all calls)
• 2) Parents whose child has only just joined
  (25)
• 3) Parents who enquired, but did not accept a
  place (25)
• 10-20 minute interviews, allowing anonymised
  responses, covering a range of issues

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Ready for distinctive marketing

• Only now is the school in a position to start
  throwing money at marketing (or investment)
• But it is also well positioned to drive revenue
• The overall strategy will have been endorsed by
  the research findings or a change of direction
  will have become apparent
• Marketing is now owned and scrutinised
• The target parent groups are identified and
  understood
• You know where to focus what your message is
• The rest (ads, mailings, PR) is soft stuff!

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Non-academic income
Building business efficiencies into your
marketing and project management
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First a few words on project management
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A problem for schools

• Schools sometimes experience difficulty entering
  new activity areas
• Increasingly, the type of projects embarked on by
  schools involve the business (and commercial)
  world, not the educational
• However, this requires a different type of
  approach and sometimes specific skills not
  often found within schools
• These are business issues
• But are you really running these projects like a
  business?

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A familiar pattern

• Fire-fighting
• Too little time for reflection, learning,
  planning
• Too much time spent on inefficient admin tasks
• Key staff members not being used properly
• Lack of follow-through
• Lack of accountability
• Too many enthusiastic amateurs
• Repeat patterns of mistakes

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Are you functioning like a business?
Unnecessary activities absorbing valuable time
Inefficient commercial structure
Focus on being busy, not being profitable
Ambiguity in roles and responsibilities
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Two general themes skills and accountability

• Some of the skills (and experience) needed for
  new projects will not be available within the
  school
• In matters of sheer expertise, there is no harm
  in admitting to lack of experience in areas
  outside the usual field of operations
• The harm is in winging it or believing its
  easy
• School staff are certainly capable of learning
  external project skills
• But these have to be learned
• Saving money on outside advice is a very false
  economy

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The bigger issue is generally accountability

• Ambiguity in staff roles and responsibilities
  leads to trouble in projects
• Tendency not to specify precise accountability
  an informal delegating of responsibility among
  semi-qualified but enthusiastic staff members
• Difficult to wrest control back, once precedents
  are set
• Compounded by lack of clarity in expected
  performance level and deliverables
• The extent of unknown territory on new projects
  only exacerbates this issue
• Frequent result the buck stops nowhere

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There are other issues

• The further you look outside the educational
  confines of the school, the more you need to
  understand the local market
• For marketing issues the perception customers
  have of your school vs. your competitors
• For commercial ventures the perception target
  customers have of your school, vs. other
  available options
• Projects can be well-managed, but still fail
  because they are ultimately misguided
• Dont start a project the school doesnt properly
  understand
• Consider is it feasible? Credible? Profitable?

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Who is going to protect the investment?

• Schools cannot afford to lose money on commercial
  ventures
• Yet a robust business approach is often not
  used for all of the reasons above
• Establish absolute clarity around financial
  controls
• What precisely is the budget? How is it phased?
• Where are the project break points? Where are
  the go/no go decision points?
• What has been learned from previous
  unsatisfactory projects at your school?
• The litmus test when did you know it was
  going wrong?

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Sure-fire project disaster
No real understanding of local commercial market
Using available floating staff
No binding deadlines or quality measures
Ambiguous roles and accountability
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On to specifics what to watch out for
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Clarity from the outset

• What is the strategic aim of the facility?
• To generate significant income? Some income?
  Or simply to cover the operating costs?
• Requires full consideration of both the
  educational and commercial aims
• But remember if it has been designed as an
  educational facility that will limit commercial
  income
• And you need repeat business, or the marketing
  costs to drive usage will sink you
• Be clear and realistic

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The design stage is critical

• Are you starting from scratch?
• The end user must be considered from the outset
• And the operator must be involved early on also
• Classic error operator is employed after the
  facility built
• The design must work for external users
• Changing rooms, reception, storage, security
• Customer flow, as well as class movement
• Think how would a client use the facility?
• Design for dual use or it will fail

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Finance and purchasing

• Funding design may have to accommodate funding
  source
• External and Lottery funding may dictate some
  community use (needs designing in from the
  outset)
• Individual donors can be a mixed blessing
  idiosyncratic requirements
• Procurement unfamiliar areas, familiar
  disciplines
• VAT
• Careful avoid slippage from charitable trust
  status

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Before marketing consider other revenue streams

• Be creative multiple uses for single facility
  can generate significant additional revenues
• Sports centres
• Grounds maintenance
• Residential non-residential courses
• Retailing across a wide scale these are
  consumers
• Catering renting out facilities
• IT skills and facilities
• Payroll
• These are your assets use them fully

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Avoiding typical marketing mistakes

• Agencies rarely consider the end user
• They tend not to consider the implications of the
  activities taking place and how that impacts
  on the daily life of the school
• Agencies also tend to ignore local competition
• There will be existing providers for your new
  services
• And your client prospects will be served there
• Think how can you win? Are you credible?
• Often a real mismatch between Governors
  aspirations and where the school can credibly
  operate

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Getting the detail right, before promoting

• Be crystal clear in the brochure on what the
  usage is, and what the customer will experience
• Dont over-promise, be misleading or be vague
• Dont generate time-wasting enquiries
• Annoying for all parties
• Dont over-elaborate on the quality of facilities
  unless every element lives up to the same
  standard
• You will attract and let down big corporates
• Ensure that there are no critical gaps
• Ancillary services will make or break the
  facility
• Careful marketing agencies are inexperienced

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Summary clarity and accountability

• Dont let it start wrong
• Be absolutely clear on the purpose
• Know your local market dont be naive
• Financial disciplines project management
• Including cash flow when will the revenue
  streams actually start to deliver?
• Make sure you can benchmark success
• Not just financial additional footfall, public
  benefit, wider benefit to the school

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Questions
Oxford and Edinburgh
Mungo Dunnett Associates 11 Polstead Road, Oxford
OX2 6TW Tel [phone] Email
info_at_md-as.com Web www.md-as.com