New Potential for Profitability

2. New Potential for Profitability • During the period 2010–2015, the various sectors of the US learning centers industry had negative or weak growth: early childhood learning centers, -6.1%; afterschool programs, -1.2%; and tutoring and test preparation, +0.1%. • These three sectors represent almost $30 billion in annual revenues: early childhood learning centers, $7 billion; afterschool programs, $22 billion; and tutoring and test preparation, $861 million. • Now that the labor market and disposable income have recovered to pre-recession levels, the learning center industry is expected to experience renewed growth, as more parents have the money to supplement their children’s standard education.

3. Fragile Franchises • Although Kumon Math & Reading Centers and Sylvan Learning Centers are the top 2 franchises and well-known brands, both had fewer locations during 2015 than 2014. • Sylvan closed 7.0% of its total 2014 locations and Gymboree Play & Music 9.5% while KidzArt experienced the largest contraction, losing 30.0% of its locations. • JEI Learning Centers, GradePower Learning and School of Rock were the only learning centers that increased their number of locations from 2014 to 2015.

4. Tutoring Can Take Students to the Top • The evidence seems to support the value of general tutoring for students; however, many parents view it as necessary to maximize their children’s grades, so elite private schools and colleges and universities will accept them. • Online tutoring has proven to be a beneficial alternative to in-person tutoring since the tutoring can be matched to a child’s schedule; students can received personalized assistance, but for shorter sessions; and tutors offer packages for multiple subjects. • Online tutoring is more affordable for more families, as the per-hour rate ranges from $15 to $35, compared to $25 to $150 for an in-person certified tutor.

5. Extending the Days of Discovery • From 2004 through 2014, the number of children in afterschool programs increased 60% to a total of 10.2 million children; however, there were still 11.3 million children unsupervised from 3 p.m. to 6 p.m. • In the same report from the Afterschool Alliance, 83% of parents with children in afterschool programs said that they were able to continue working their jobs and 75% said they felt their children were safe, so they could concentrate on their jobs. • The study also found that 12% of European American, 24% of African American and 29% of Latino American children were in afterschool programs.

6. Advertising Strategies • Show learning centers why television is the best advertising medium to reach parents that can now afford supplemental education again for their children and offer a free introductory lesson or a week of lessons. • Bring together a for-profit learning center and a non-profit afterschool program to promote a bundled package on television. The new students in the afterschool program become leads for the learning center. • With the help of your station’s promotions department, ask major advertisers to offer and promote “scholarships” for students to attend afterschool programs, so one of their parents is not forced to quit his or her job.

7. Social Media Strategies • Social media is a critical channel for learning centers to reach the mothers of school-age children. Mix posts of facts about the value of supplemental education with video testimonials from students and their parents. • A blog is an excellent method to build trust with parents, with posts from the owner/manager as well as staff, teachers and tutors that introduce them, demonstrate their expertise and reveal their dedication to improving children’s lives and futures. • Afterschool programs that offer STEM activities can use social media to great advantage to promote the value of science, technology, engineering and math and how parents can help to reinforce and motivate children’s interest in these disciplines.