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The Business of Education: Why Schools Must Embrace Data to Stay Competitive

Read Time 12 mins | Written by: Caroline Scott

The private education sector in the UK is facing a perfect storm of budgetary challenges. While data from the Independent Schools Council 2023 survey shows a small increase in student enrolment of 1.6% since 2022, it also highlights a record £1.2 billion provided in fee assistance with school fees increasing only with rate of inflation. While this a huge win for student equity and access, it also highlights the watchful eye that school leaders must have on their budget and operating costs. Compounding the issue is the proposed removal of VAT exemptions for private schools, which could further erode their bottom line by an estimated £1.7 billion per year across the sector.

These converging factors have made it increasingly difficult for school leaders to maintain financial stability, plan for the future with confidence, and ultimately provide a robust education to their maximum number of students.

While viewing education through a business lens may seem at odds with the noble pursuit of nurturing young minds, the reality is that schools must operate as financially sustainable entities to continue fulfilling this mission. By embracing data-driven strategies and analytics, schools can optimize their admissions and re-enrolment processes to gain a crucial edge within this competitive market.

Here we will explore how leveraging data can supercharge your school's enrollment strategy, empowering you to build a robust revenue motion that ensures long-term viability. From understanding the changing landscape to implementing targeted, analytics-backed tactics, we'll dive into the key steps educational leaders can take to future-proof their institutions.

The Current Landscape

The global private education sector is navigating a period of challenges - with student enrolment numbers barely rebounding from post-COVID lows and new schools opening their doors each year, it has never been more competitive - or essential - to attract and retain new students to maintain revenue streams.

UK-based schools face even greater financial strain with the proposed removal of VAT exemptions for private schools. The potential impact of this policy change is staggering, with estimates suggesting that the sector could face an additional tax burden of £1.7 billion annually. For many schools already operating on tight margins, this could prove to be an insurmountable obstacle.

The combination of stagnating enrollment, high competition, and increased tax liability has created a challenging situation that requires a proactive response from school leaders. Without adapting to these changing circumstances, schools may face a difficult cycle of reduced revenue, budget cuts, and a struggle to maintain educational quality, which could then, in turn impact enrollment numbers. A vicious cycle, indeed, to be avoided at all costs (literally!).

In light of these challenges, private schools must reassess their approach to admissions and enrollment management. Traditional methods that rely on reputation and word-of-mouth referrals will simply no longer be sufficient. Even schools with historically long waiting lists are vulnerable if their “lookalike” schools choose to adopt a more proactive, robust approach.

By embracing a revenue-focused mindset and leveraging the power of analytics, private schools can gain a deeper understanding of their target audience, personalize their outreach, and demonstrate the unique value they offer to prospective students and their families. This shift towards a more business-oriented approach is not a betrayal of traditional educational values, but rather a necessary step in ensuring that schools can continue to provide high-quality education and make a long-lasting positive impact on their communities.

In the following sections, we will explore the key components of a successful revenue motion for private schools and provide actionable insights on how to harness the power of data to drive enrollment growth and secure a thriving future for your institution.

The Importance of a Proper Revenue Motion

A revenue motion is a comprehensive, data-driven approach to managing the entire student journey, from initial inquiry to enrollment, to re-enrollment and to becoming an enthusiastic community evangelist. It encompasses all the strategies, processes, and tools that a school uses to attract, engage, and retain students.

A well-designed revenue motion helps schools to:

  1. Identify and target the right prospective students
  2. Effectively communicate the school's unique value proposition
  3. Nurture leads through the admissions funnel
  4. Optimize the application and enrollment process
  5. Maximize student retention and minimize attrition

Successful revenue motions should have several key priorities:

  1. Strong alignment between the admissions, marketing, and finance functions to develop and execute a cohesive strategy that supports the school's overall goals. This alignment ensures that everyone is working towards the same objectives, using the same data, and well informed on key school policies regarding tuition.
  2. Ability to adapt to changing market conditions and student preferences. Each year, admissions teams should be reviewing their entire enrolment pipeline - how did students find us? What made them choose us? Did they attend key admissions events? By reviewing this data, admissions teams can leverage these insights to create an admissions process that aligns with their own unique value proposition and the trends or preferences within their target audience.
  3. Invest in technology, talent, and processes to expedite your processes and understand your outcomes. Like in any “traditional” business, schools also must have the right tools and training to define, track, and interpret key metrics. These tools should help teams to define processes for lead generation and nurture in order to improve conversion and ensure that no opportunities slip through the cracks.

While, it might seem daunting to set up a comprehensive revenue motion at first, the benefits will far outweigh your initial investment. By creating a data-driven, student-centric approach to enrolment management, you’ll soon have evergreen processes that are always running in the background, helping you to understand your audience and your prospective families to feel well-supported in their admissions journey. With this approach, you’ll be able to improve your school’s longterm financial trajectory AND get back more time to spend directly with your prospective families.

In the next section, we'll explore how leveraging data specifically can supercharge your school's admissions efforts.

Leveraging Data to Drive Admissions

Data is the foundation of a successful revenue motion - and in turn, any successful admissions strategy. But don’t be nervous, collecting, analyzing and acting on data does not have to be a hugely complex task. By defining the basic key metrics about your audience and enrolment process, you can optimise your marketing and admissions strategy to ultimately drive enrolment growth.

Still feeling anxious? Use the resources you have available - you very well may have a skilled mathematician in your building who would probably be delighted to help (after their school day ends, of course).

Here are some practical ways that schools can leverage data to supercharge their admissions efforts, even with limited resources:

  1. Understanding your ideal student profile

    Start by gathering data on your current and past students. This can be very simple as you are likely already asking a number of questions about demographics, interests, academics, and family background on your application. Export the basic application data into a spreadsheet and start looking for common patterns and characteristics that define your existing student profile. Go one step further and be sure to ask key questions during your admissions process, such as “why are you considering our school” to understand your school’s current position in your local private school market. This information can help you tailor your marketing messages or campaigns to attract the right students and help you inform your positioning while you’re engaging with prospective students.

  2. Tracking lead sources Make it a priority to understand how each prospective family heard about your school. This can be done by simply asking "How did you hear about us?" on your inquiry forms or during initial conversations. Log this information in your student information system or CRM, and regularly review the data to identify your most effective marketing channels. This will help you focus your efforts and resources on the channels that deliver the best results.

  3. Personalizing communication Use the data you collect on prospective students' interests, needs, and concerns to create targeted communication plans. For example, segment your contacts based on grade level and create targeted follow ups that speak to their needs (your kindergarten parents don’t need to worry about final exam schedules and your high school parents are not going to be impressed by a field trip to a petting zoo). This shows you take a personalised approach to communication and sets the tone for your schools’ commitment to each students’ individual needs from day one.

  4. Monitoring student engagement

    Remember that annual re-enrolment is a full school effort and requires collaboration across departments! Talk to your school admins or year group heads to understand student engagement throughout the school year - who is struggling to keep up with workload or who is having regular conflicts with their teachers? Your school simply might not be the right fit for every student, but sometimes a proactive conversation or gesture of support can go a long way in improving retention and minimizing attrition.

  5. Continuously evaluating and adjusting Regularly review your enrollment data to identify trends, successes, anomalies and areas for improvement. For example, perhaps you have identified that you have many students coming a specific feeder school - that sounds like a relationship you should formalise or strengthen. Or, perhaps you struggled to attract high schoolers to your program - do you have a new competitor who are absorbing some of your marketshare? Do you need to change your messaging to address a misconception that multiple prospectives held? Insights like these can only be gleaned - and actioned - if you proactively review your admissions data.

While investing in advanced technology and tools could enhance your data-driven efforts, it is far from a prerequisite for success. A basic tool plus a data-driven mindset can have tremendous impact. This means that you use data, and not just your own hunches, to inform your decision-making and direct your strategy. For example - a data-driven mindset might inspire you to look at the percentage of enrolled students who also attended an Open House in order for you to understand the role of events in your admissions strategy. A “hunch” driven mindset might simply think “well, our last event didn’t have great attendance, so maybe these don’t matter”. By adopting a data informed approach, you’ll be able to create a more targeted, structured and effective admissions process that ultimately makes school leaders’ jobs and enrolment goals more predictable.

Overcoming the Stigma of Treating Education as a Business

For many educators and school leaders, the idea of treating education as a business can feel uncomfortable or even contradictory to their mission. After all, the primary purpose of education is well….to educate, not to generate revenue. But, it’s important to recognise that adopting a business mindset and focusing on financial sustainability is not at odds with providing high-quality education. In fact, it’s a necessary condition for schools to continue serving students and expanding their community reach in the long run.

So, shed that apprehension and consider the following key reasons why you should wholeheartedly embrace a revenue-focused approach:

  1. Ensuring your school’s long-term viability Without a stable and predictable revenue stream, private schools cannot maintain their facilities, attract top teaching talent, and invest in resources and programs that support the needs of their students. By prioritising financial health, schools can ensure a strong foundation for delivering high-quality education and the ability to withstand any external challenges.
  2. Investing in your students’ success As a school leader, you know you must allocate resources strategically and direct funds to initiatives that will have the greatest impact on student learning and well-being. Perhaps your students need an additional counselor to support mental health or new lab equipment to supercharge their chemistry knowledge — none of these needs can be met unless you are maximising your tuition revenue stream each and every year.
  3. Adapting to changing market conditions The education landscape is constantly evolving, with new technologies, competitors, and student needs emerging all the time. By adopting a business mindset, schools will prioritise the ability to stay agile and responsive to these changes to remain relevant and competitive.
  4. Demonstrating value to stakeholders Parents, students, and other stakeholders expect schools to demonstrate their value and impact - whether this is retaining everyone’s favorite teacher, offering exciting new electives, or providing access to the latest learning tools to improve test scores. By focusing on key performance indicators such as growth, community retention and student outcomes, schools can communicate their effectiveness and build trust with their community.

But adopting a business-mindset is only your first step. Shifting your full community to a revenue focused approach will require school leaders to start by:

  1. Communicate the vision to help faculty and other stakeholders why a focus on revenue and data is essential for the school’s long term success and will benefit the whole school community.
  2. Build data literacy to help everyone in the organisation understand their role in leveraging school data. Encourage a culture of curiosity and continuous improvement where data is seen as a tool for learning and growth.
  3. Start small and celebrate wins! As your team starts to see the successes of a data-driven approach, you can gradually introduce more advanced tactics and tools.

Actionable Steps for School Leaders

Now that we've established the importance of a data-driven revenue motion for schools, let's explore some concrete steps that school leaders can take to start implementing these strategies.

  1. Conduct a data audit - take stock of what you currently collect and how it’s used. Identify gaps (or surpluses!) in your data collection and work towards an approach that prioritises data quality and consistency. When employing this approach, it can be tempting to “over-collect” data, but you should be mindful of this - only collect what your school needs or finds legitimate value in reporting on.
  2. Define your key performance indicators (KPIs). Work with your leadership team to identify important metrics for measuring your school’s success. Common examples would enrolment numbers, yield rates, retention rates, and student outcomes, like graduation rates. Ensure that everyone in the school faculty understanding that hitting these KPIs is a team effort and not just siloed to individual departments.
  3. Establish data collection processes Create standardized processes for collecting and recording data across all departments with a goal of ensuring accuracy, consistency, completion, and accessibility. As an example, this might mean shifting from free-form fields into drop-downs so that your forms yield consistent data points.
  4. Leverage existing resources Look for opportunities to use your existing resources and expertise to support your data-driven efforts. This may include enlisting the help of your math department to analyze admissions data, or partnering with your IT team to create dashboards and reports. By tapping into the talents of your staff, you can make significant progress without a large investment in new tools or personnel.
  5. Start small and iterate Don't try to overhaul your entire admissions and enrollment process overnight. Instead, start with a few key initiatives and gradually build on your successes. For example, you might begin by segmenting your email communications based on grade level or implementing a simple lead tracking system to understand the percentage of leads you convert to students. As you see the impact of these efforts, you can expand your strategies and invest in more advanced tools.
  6. Continuously monitor and adjust Regularly review your data and KPIs to track progress and identify areas for improvement. Be willing to experiment with new approaches and adapt your strategies based on what the data tells you. By continuously monitoring and refining your revenue motion, you can create a powerful cycle of growth and improvement.

Conclusion

Implementing a data-driven revenue motion is a journey, not a destination. It requires a commitment to continuous learning, experimentation, and improvement. But by taking these actionable steps and staying focused on your goals, you can create a culture of data-driven decision making that will ultimately yield a more sustainable school that better serves your students and community.

And remember, focusing on revenue generation is the condition your school must adopt in order to serve your community longterm. Finding the balance between financial health and educational outcomes is the foundation in which schools can deliver high quality education, while remain resilient to adapt to external challenges and changing competitive landscapes.

As you embark on this journey, remember that you don't have to do it alone. Seek out best practices from other schools, partner with experts and consultants, and lean on your network for support and guidance. With the right mindset, tools, and partnerships, you can successfully navigate the challenges ahead and build a thriving school that makes a lasting difference in the lives of your students.

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Caroline Scott

Caroline has spent over a decade in admissions, managing, launching, and growing schools. Her main focus has always been on leveraging data-driven decisions to reach enrollment goals. This passion for data has led her into her new career in revenue operations where she focuses on building seamless, customer-centric journeys.Blending these two worlds, she shares practical and actionable tips that schools can use to implement modern strategies into their admissions process.