CAIS CSA Keynote: Patrick F. Bassett

Welcome by a vice-president of Quinnipiac University — too wordy, talking up the campus, beautiful facilities on four campuses,  great programs in Education, law, health care, technology, etc. “I’m staying for your first session because your demographics are my demographics.”

Introduction by Julie Reiff of Taft School, Director of Communications.  CAIS Commission on School Advancement. CAIS/NAIS session in New York, very prominent and capable speaker. Head of all boys school, and eventually Head of all-girls school.  He’s been involved in CAIS, VirginiaAIS, Central Atlantic.  Patrick F. Bassett is President of the National Association of Independent Schools (NAIS).  He keeps a blog.  Notable entry: The Seven Myths of Independent Schools.  Independent School marketing has to emphasize outcomes rather than facilities and materials.  We need to report the successes, not the inputs.

Password-protected link to his PowerPoint slides… you need to be a NAIS member.

Hi.  National data: 1400 schools. But core data involves 500 schools long time members.    This little purple line are schools that are losing students.  Ten years ago, few schools lost students.  A huge increase over the last three years.  Sixty percent of schools lost students last year.  The industry of private schools may be in trouble.  Mark Mitchell, creator of the SSS process, shows how the financial aid grants spikes during recessions, usually up 13% over the last four recessions: 91-92, 02-03. But this most recent recession — 17.44%!  But the number of awards rose, not the size of the aid grant.  That is up…. 13.94% We dramatically increased the number of grants, but not their size.

Independent Schools had a sale.

Don’t be squeamish about spikes in financial aid.  You did exactly the right thing over the long term.  It’s what helped schools weather the storm in the last six recessions.  It’s a natural consequence that more people need more hep.  It’s most important to keep the school fully enrolled.  Lack of students is far more damaging to the institution long-term than “too many subsidized students”. The long-term consequences These spikes only last a few years; annualized increase over the last 22 years is 7.6%  Full-pay parents tend to push back, because it hurts their pockets; historically we hear it, and guess what — we’ll hear more about it from the parents.  Development and admissions officers are going to be the front line of these discussions.   Articulate funding model: there must be a commitment to diversity through Access and the emphasis on Affordability for all.

$50,000/year is the new middle class.  And you’re going to get pushback from the top 5% of families, the full-pay students come from those earning more than $200,000 a year!  Make the commitment to access for the lowest quintile, (0-24,780), middle class (21,125)… but those families need grants of $25k or $20k… you can bring in four or five kids from the top two quintiles for that! And they contribute the dollars to annual funds beyond tuition.

But you need the middle class kids.  Not the highest class students. They win the awards. They lead the sports teams.  They run the drama programs and the music programs.  The middle class students come with ambition, and the highest upper class kids suffer from affluenza — they’re not pushing themselves enough to move forward.  Find a bunch of schools that are about your size, about your budget. “Birds of a feather”.  Use pulse surveys to make mid-course corrections.  NAIS uses stats online and has 60 years of data on tuition, inflation, and budgetary information from NAIS schools.

The top 5% of families though, are starting to be less-rich.  We’ve been able to set tuition increases 5-7% above inflation, because the full-pay families have been gaining 12-15% increases in wealth above inflation.  They could pay it.  The last three years, those full-pay families have seen their wealth decline relative to inflation, though.  CPI was nearly 0% year before last… this year it rose 2.7%!  THE NEW NORMAL.  NAIS’s new recommended tuition increase is more connected to inflation than ever before. We recommend CPI+1.  So inflation is 2.7… tuition should rise to about 3.8.

Annual Giving is down about 1/3 for all schools in NAIS last year.  Most schools are down 2/5th for this past year-to-date. Most schools are up, but not all.  Giving goes UP in historical recessions goes to religious institutions, social services, arts institutions…  but not to educational organizations.  If you’re having a hard time with annual giving, don’t be surprised.  We’re seen as less essential.   WE need to be flexible with our donrs.  Lead not with “These are our needs” but “what are your needs?” What do the Boomers, where the wealth is currently concentrated, want and need?

Marketing and Messaging:  We promote features, but savvy customers are suspicious of features.  Self-reported features are suspect; examine Freakonomics data on online-dating.  Skepticism under current customers is likely. Donors and customers want to know about outcomes.  “Do you have data?” modern Reaganism: “Trust but verify.”  New Yorker cartoon. “Why can’t you be more like that little Hester Prynne. She’s getting straight A’s.”  Parents want an early indicator that their children are going to be at the top of the heap.  The grades are a proxy for the outcome of success.  There are differences between features (swimming pools, weight room, yoga program) and outcomes.  What are you promising to parents, to donors? What do they desire and fear?

Fear drives independent school enrollment far more than desire.  Your target now is pregnant, affluent young women thinking about where my child will go for school.  Such women make 90% of all major purchasing decisions for their families.  Some women in some NAIS school cachement basins receive post cards from the school every year on the anniversary of the kid’s baptism. “This school already knows who my kid is… it’s on my list.”  Lists of college profiles are disingenuous; match kids with the RIGHT college, not the best.  Margaret Spellings: “In God we Trust; all others bring data.”  NAIS has generic data.  You need to start tracking yours.  Individual schools must track this data specifically for their graduates.  ALL NAIS SCHOOLS ARE COLLEGE PREP.  Track Secondary School. Track College. Track Business engagement. Social engagement. Membership in organizations for service, for arts, for charity.

Data gathering through websites should be powerful.  Collect data on outcomes-and-choices. 4-5 questions.  You should have different materials based on whether parents are into sports, or financial aid, or academics.  Sticky messages: country music titles tend to be edgy and real.  “I’m so miserable without you, it’s like having you here.” There aren’t many NAIS schools that have edgy taglines.

WHAT IS YOUR BRAND?  Do you have a consistent visual image that tells a story?  NAIS schools have a negative brand in the general public: juvenile delinquents go to boarding school. Too expensive. Not diverse.  Look at your logos — knights in armor on horseback… why not just build the moat around your campus?  The NAIS brand is worth about $6 million… Elise, the woman who did the brand study, enrolled her kids only after she did the study.  Put “Proud to be a NAIS school” on your website! What’s your Made-to-stick message. (Read MADE TO STICK!)  Six principels of stickiness: simplicity, unexpected, concreteness, credibility, emotion, context in story.

What should be NAIS’s sticky message that every school can nestle under.  Email me if you’ve got ideas.  “Can you afford NOT to consider an independent school education?”  Knox school on Long Island used this and doubled its open house attendance. Combined with a tuition discount focused on day students within a particular town range, increased enrollment.  “Independent Schools deliver on the promise.”  Hawken School made a promise, rather than a mission statement, to focus its efforts.  Roxbury Latin made two promises: “Your son (all boys school) will be known, and your son will be loved.”

Connecticut: We’re likely to lose between 0-5% of school-age students.  St. Louis, MO used to be the best market for NAIS schools… now there are over 20 Tuition-Free MAGNET SCHOOLS in the public school system now, in direct competition with the private school programs.  Their sticky tag line, “YOUR CHILD BELONGS IN A MAGNET SCHOOL.”  2009-2010 is the inaugural year of the St. Louis Virtual School.

NAIS uses government algorithyms on their site so you can target specific zip codes for full-pay families, threshold families, top and 2nd quintile families that you need to maintain the school culture.   But the families that AISNE studied discovered that these families think that NAIS schools are far less affordable to them than they really are.  We have a bright future in CT based on the data.  Data for Willimantic is not so good, but the data suggests that if you can market correctly, you’re on the right track for the next five years.

Even so we need a game-changing model for financial sustainable schools.  The data says that what we’re doing now isn’t going to continue to work.  Perceived Outcomes  ÷ Perceived price = value of the school/brand.  Every year, we jack up our price, but unless the perceived outcome rises too, then the value declines.    For prospective parents, as perceived price groes up, values go down unless outcomes increase also.  For development/advancement, substitute giving expectation for price to calculate value-proposition.  The outcomes must be better for numerator-denominator balance.

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