When it comes to admission and marketing budgets, the question isn’t just “How much should we spend?” but rather, “How do we ensure our investment yields the best results?” It’s a puzzle that every private school must solve to thrive in today’s competitive landscape.
The Benchmark Fallacy
Starting with a benchmark might seem like a smart move, but it’s only a piece of the puzzle. Benchmarks fail to consider the weight of a strong brand. A well-established brand can afford to spend less on marketing while still enjoying top-tier applicant pools. In a city like New York, with over 2000 kindergarten-aged children vying for spots in private schools, the competition is fierce. Unless your brand stands out, you’ll need to pour more resources into marketing to capture attention. Schools with a strong brand can limit spending on advertising, travel, and events while still attracting their ideal students. However, when they are added into the benchmark, the numbers are skewed.
The Real Question
So, how do you determine the right amount to spend? You need to allocate enough funds to generate the desired revenue, supported by a solid action plan.
Convincing the Decision-Makers
Often, school heads aren’t convinced that increasing the marketing budget or admission staff will yield gains. They may doubt whether the director of admissions or communications has the skills to use these resources effectively. The common refrain, “We can’t afford it,” is used to avoid budget increases. But if you’re not filling spaces, can you afford not to spend more? Ignoring the need for a larger budget won’t solve your enrollment problems.
Understanding Your Unique Situation
To tailor your marketing budget, ask yourself these questions:
- Revenue Generation: How difficult is it for your school to generate revenue? When do you typically reach your target goal – summer, the start of the school year, or the middle of the fiscal period?
- Insecurity Levels: Is there high uncertainty about meeting your enrollment goals?
- Empty Seats: Do you have unfilled desks or beds that could bring in revenue?
- Financial Aid Strain: Are you spending too much on financial aid to generate some income, making your business model unsustainable?
- Full-Pay Families: Could you attract more full-pay families to boost income per seat? What is your ratio for full-pay domestic applications to full-pay spaces needed? One-to-one in a competitive market and you are bleeding. Two-to-one and you are hurting.
- Senior Team Awareness: Does your senior team understand current marketing, communication, and sales trends? Do they see the value in increasing admission and marketing resources?
- Market Data: What data do you have on current market conditions? How many full-pay families do you have per opening? What are the trends and satisfaction levels of your current families?
- Pilot Initiatives: Can your director of admissions or marketing present a case for piloting new initiatives? Give it due consideration.
- Funding Solutions: Based on your findings, provide the necessary funding for an effective solution.
The Cost of Inaction
If your school isn’t generating income as it should and you decide not to allocate more funds, how will you solve the revenue problem? Many heads I’ve spoken with who faced enrollment shortfalls admitted the problem didn’t arise overnight. It grew from a lack of discussions about enrollment conditions. Sounds similar to how capital expenditure decisions get delayed when they’re not addressed promptly.
Proactive Conversations
Most schools are under-resourced in today’s market. Serious conversations need to take place. Some may wait until their situation becomes critical, but whatever money they save now by not addressing these issues proactively will cost them much more in the future.
The Bottom Line
So, how much money is enough? Allocate enough to pay for the right leadership and a high-quality marketing initiative that supports generating the right amount of revenue for your school.
