Sustaining Enrollment in Independent Schools Nine Things You Can Do Tomorrow

1. Sustaining Enrollment in Independent SchoolsNine Things You Can Do Tomorrow The Association of Boarding Schools2005 Conference, Chicago, IL David Erdmann, Rollins College

2. Enrollment Landscape • Enrollment variables • Anatomy of school selection • Past year in perspective

3. Full Enrollment Program Communication Market Enrollment Variables

4. Market Environment Migration Barriers Generation Trends Economic Demographic Education Physical Cultural Financial Gen X Gen Y Next Gen? Public Private Proximity Access Ability to pay Willingness to pay

5. Communication Internal External Message Structure Collateral Buzz Visibility Recruitment Process Identity Parity Distinguishing Characteristics Publications Web site Individual attention Students Parents Alumni Athletics Open Campus Arts Admission Financial Aid IECA Trustees Teachers

6. Program Mission Position Promise Delivery Satisfaction Perceptions Location Niche Cost Retention Buzz Reputation Value

7. Market Communication Program Curiosity Interest Commitment Enrollment Anatomy of School Selection Graduates and Current families “Buzz” Full Enrollment Awareness

8. Fall 2005 Independent School Enrollment Survey Boarding School Trends • 60% report increase in inquiries • 64% report increase in applications • 45% report increase in yield • 51% report increase in total enrollment

9. Nine Things You Can Do Tomorrow 1. Read 6. Innovate 2. Research 7. Reallocate 3. Position 8. Sweat 4. Differentiate 9. Sharpen 5. Segment

10. Read • Millennials Rising: The Next Great Generation, Neil Howe and William Strauss • The Harvard Business Review • The Tipping Point, Malcolm Gladwell • The Anatomy of Buzz, Emanuel Rosen • blink, Malcolm Gladwell • Creating Effective Enrollment Management Systems, Don Hossler • Enrollment Management: An Integrated Approach, Don Hossler • Millennial Parents: Hard to get to and harder to keep away, www.erdmannconsulting.com, View Online Publications/Presentations • Financial Aid and Independent Schools: Doing more with less, www.erdmannconsulting.com, View Online Publications/Presentations

11. Research Your Market Demographics • National resources • National Center for Education Statistics http://nces.ed.gov/ • Western Interstate Commission for Higher Education www.wiche.edu/ • U.S. Census Bureau http://quickfacts.census.gov • State resources (examples) • New Hamphire Department of Education—http://www.ed.state.nh.us.education • Missouri Department of Elementary and Secondary Education—http://www.dese.state.mo.us/schooldata/

12. Percent Change in Grades 9-12 Enrollment in Public Schools 2006-2012Source: National Center for Education Statistics • Northeast -7.4% • CT -10.4% • MA -10.4% • NH -19.0% • Midwest -5.8% • IL -4.7% • OH -6.4% • South -3.4% • NC -7.7% • FL -6.6% • West -1.1% • CA -1.7% • CO -.08% “For private and public schools, demography is destiny.” P. Bassett, NAIS

13. 500,000 400,000 300,000 Asian Latino African-American 200,000 100,000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 U.S. High School Graduate ProjectionsSource: Western Interstate Commission for Higher Education

14. 1850000 1800000 1750000 White-Non-Latino 1700000 1650000 1600000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 U.S. High School Graduate ProjectionsSource: Western Interstate Commission for Higher Education

15. http://nces.ed.gov/programs/projections/index.asp

16. 60.0% 50.0% 40.0% 30.0% St. Louis County St. Charles County 20.0% Jefferson County Percent Change Franklin County 10.0% Warren County Montgomery County 0.0% 1990 1995 2000 2005 2010 2015 2020 -10.0% -20.0% -30.0% Year Missouri Counties--PopulationChange Projections Children Ages 0-9 Years of AgeSource: Missouri Office of Administration www.oa.mo.gov

17. New Hampton School (NH) Sending CountiesElementary School Enrollment Changes 02-03 to 04-05Source: New Hampshire Dept. of Education County% Change% to 4-year colleges Alton +4% 50% Franklin -2% 23% Gilford -2% 55% Gov. Wentworth -2% 37% Inter-Lakes -3% 52% Laconia -2% 37% Merrimack Valley -1% 42% Newfound Area +12% 43%

18. Position Your School (Or Someone Else Will Do It For You) According to the Boarding School Review: • White Mountain School is more selective than St. Mark’s • Montverde Academy has more faculty with advanced degrees than Phillips Exeter • Admiral Farragut offers more AP courses than Hotchkiss • Stoneleigh-Burnham has higher SAT’s than Western Reserve • St. Paul’s Academy does NOT exist in Arizona According to TABS: • Verde Valley does NOT exist in Arizona According to Johnny Carson: • South Dakota does not exist

19. Differentiate Your School What makes these schools different? • We enhance the potential of students and promote academic success and development of caring community members. We were chartered in ___ to provide college preparatory education focusing on community and individual responsibility. • Founded in ____ and located in ____, ____ is a private, mid-sized coeducational boarding and day school for grades 9-12. Our ____ students, drawn from 25 states and 21 countries, have chosen ____ for its fine academic, art, and athletic programs, and for the school's commitment to a set of fundamental values: excellence, integrity, compassion. • ____ is a coeducational college preparatory boarding and day school for 9th-12th grade students.  The values of citizenship and social responsibility are reinforced in a small, cohesive community which cultivates maturity, dedication and lifelong accomplishment. • A shared sense of community, a shared love of the outdoors, a shared sense of tradition, a shared sense of discovery, a shared love of learning.

20. What Makes These Schools Different? • Idyllwild is the place where dreams take shape in music, dance, theatre, visual arts, filmmaking, and creative writing. • The objective of Turn-About Ranch is to provide a tough, hard-hitting, high-impact residential program for troubled teenagers that will remold and turn around the lives of rebellious teens.

21. Specialized Boutique Traditional Independent School Continuum

22. High Specialized Garden of Eden A C Power Alley Boutique Power Alley Traditional D I F F E R E N T I A T I O N D B Death Valley Low High Price The Power of Differentiation

23. Segment your audience and your message • “If you’re not thinking segmentation, you’re not thinking.” Tom Peters • “Markets can usually be segmented much further and in much more sophisticated ways…but only if the marketer has a customer- and segmentation-oriented philosophy clearly in mind.” Strategic Marketing for Nonprofit Organizations, Kotler and Andreasen • Although there is a common set of characteristics that families seek in independent schools, each family enters the process at a different interest level and with a different set of information needs.

24. Common Characteristic SetWhat families expect from independent schools Teacher quality Academic support College prep curriculum College placement success Small class size Academic rigor Safety Emphasis on values Strict drug/alcohol policies

25. Case Study: Top Reason for Selecting School X ReasonStudentsParents Academic Rigor 46% 58% Student/Faculty 18% 28% College Accept 14% 12% Residential Env. 14% 11% Admission Contact 6% 8% Athletic Program 5% 3% Arts Program 3% 2%

26. 100% 90% 80% 70% Resource investment required to move the family to the next level 45%   Awareness Interest (Inquire) Interest (Visit) Desire (Apply) Commitment (Enroll) Commitment (Graduation) 0 Family Interest Level The Power of Segmentation

27. Innovate on the demand side • “Demand side innovation…is about how a company orchestrates its customer interactions and relationships. It’s innovation with respect to how companies go to market, as opposed to what they bring to market.” (HBR, Febuary, 2005) • “Resistant cultures will make it more difficult to innovate and lead…” P.Bassett, NAIS • Better communication is demand side innovation. Millennial parents expect instant feedback and gratification—personalized and interactive communication.

28. Millennial Characteristics • Born in 1982 or later • Protected and watched over • Close to their parents • Rule followers—intolerant of those who aren’t • Prefer structure and emphasis on basics • Fascinated with technology • Compulsion for high achievement (esp. girls) • Seek moral and spiritual guidance

29. Millennial Parents Expectations of Schools • Great (not good) teaching • Frequent (constant) communication • Integrated (not superficial) technology • Supervision and safety (physical and moral) • Maximized outcomes

30. “Stronger” Reputation Reputation Tropic X Reputation Tropic “Weaker” Reputation The Power of Reputation; The Power of Demand Side Innovation

31. Reallocate Financial Aid Resources • Independent school enrollments are economically bipolar—high need or high ability to pay • SSS Applicants from families under $60K declining; over $100K skyrocketing(Bassett) • Rising costs will alienate customers, make schools less affordable and attractive (Bassett)

32. Case Study: Ability to Pay

33. 2004-2005 Financial Aid StatisticsSource: NAIS • Average boarding school has 30-34% on aid, average grant is $14,430 • Average boarding school discount rate is 20% • Discount rates are increasing at .5% per year

34. Fall 2005 Independent School Enrollment Survey Boarding School Trends • 45% report increase in aid to new boarders • 38% report increase in percentage of new boarders receiving aid • 35% report increase in percentage of returning boarders receiving aid • 39% report discount rate <=15% • 28% report discount rate 16-20% • 33% report discount rate >20%

35. Redefining “Need” • Family with parents age 42, one child, $100,000 in total income, $200,000 in net worth has an EFC of $30,000 AFTER TAXES! • According to NAIS statistics, 22% of 317 schools report offering no-need awards in 2004-2005 were boarding/boarding day schools; 78% were day schools • According to Erdmann survey, 27% of all respondents report offering no-need awards in 2005-2006 • Although there is no evidence yet of significant demand elasticity, how long can it be before increasing prices will result in decreasing demand?

36. D (Demand) $28,000 P (Price) a b d Financial Aid Full Pay Partial Pay c e 0 210 300 320 Price/Demand/Aid Relationships

37. Sweat the Small Stuff • “A stained carpet in the office or a burned-out reading light on an airplane may seem inconsequential. But when management ignores such trivial irritations, it is effectively telling employees or customers that they don’t matter.” HBR, April 2005 • The Broken Window Theory--You don’t have to solve big problems to turn things around. “The impetus to engage in a certain kind of behavior is not coming from a certain kind of person but from a feature of the environment.” The Tipping Point

38. Sharpen the saw (and relieve stress) • Beating the Yerkes-Dodson Curve--taking the stress level up to the top of the bell curve and then effectively pulling the rug out from under it by turning to a quieting, rejuvenating activity..evokes the relaxation response..counteracts the negative effects of the stress hormones. HBR, November 2005 • The Essex Institute for Independent School Enrollment Management June 14 – June 17, 2006 Basin Harbor Club, Vergennes, Vermont www.essexinstitute.com Derdmann@rollins.edu

39. Yerkes-Dodson Curve

40. derdmann@rollins.edu www.erdmannconsulting.com www.essexinstitute.com