On March 22nd, Sears, an iconic American retailer told Wall Street that it was facing bankruptcy. Sears had a glorious past and shaped a lot of America:
- The Sears catalog was a mainstay for many Americans.
- At one point it’s Kenmore brand of appliances was in over 50% of American homes
- Sears even sold houses with over 75,000 prefabricated houses sold to consumers between 1908 and 1940
Sears was not just a retailer. Sears was one of the first major stores to offer consumers credit, a revolutionary concept at the time, and created the Discover card in 1985. They started Allstate Insurance in 1931, Caldwell Banker real estate in 1981, and in collaboration with IBM, formed Prodigy Internet in 1984. In the 1990’s, one out of every seven Americans either worked for Sears or had worked there.
So why did Sears fail? There are many several reasons, but if you poll management experts it can be answered in one sentence.
The market changed and Sears didn’t change with it
So how does this apply to marketing your school? The educational marketplace is undergoing significant shifts that require school leaders to re-examine how they have worked in the past and be willing to respond to the market. Let’s talk about a few key changes that are happening in our marketplace.
1.) The rise of new entrants.
In 1994 a 30-year-old guy named Jeff Bezos started a company called Amazon in his garage. Within 30 days, it was doing $20,000 a week in sales. I am sure that there were a couple of meetings at Sears where somebody brought up this little upstart, and I am sure that Big Old Sears felt that there was nothing to worry about. “Nobody is going to use their computer to buy things!” Today, Amazon sells $60 billion of goods and services.
The education market has seen a parallel with the introduction of charter schools. From its early beginnings in Minnesota in 1991, today 2.5 million students (5.1% of all students) are attending charter schools. The rise of virtual schools is also impacting education. Over 5 million students have taken at least one online class. And around 300,000 students are currently full time students in a virtual school. “I am sure that nobody is ever going to use their computer to take classes . . ”
Additionally, the line between private school and public school is blurring with the introduction of vouchers. Though this is still confined to a few states, with the election of President Trump and his appointment of school choice advocate Betsy DeVoss – school vouchers are poised to increase throughout the nation. In my state of Indiana which has the largest voucher program in the nation, almost 35,000 students used a voucher to attend a private school.
2.) A changing customer base.
Sears didn’t fail because suddenly nobody needed a Craftsman drill. They failed because their shopping experience didn’t match up to what their customers wanted. They didn’t understand their customers. Parents today are becoming much more sophisticated and discerning about who they entrust with the education of their child. The growth of online review sites like niche.com, www.greatschools.org, and others has allowed for a much greater degree of transparency and visibility to compare schools.
Most of the parents of school aged children are going to be the Millennial generation. The Millennials are different in their outlook and desires than Generation X or the baby boomer generation. In their fascinating book, Millennials with Kids, authors Jeff Fromm and Marissa Vidler talk about the growth of the “Ization” nation with Millennials wanting to personalize and customize their experiences with brands and services. If you are not actively attempting to engage this parental set and making them “co-creators” of your school’s brand and identity, you are not going to satisfy their key buying needs and your enrollment marketing is not going to be as strong.
3.) Explosion of communication channels.
We live in the digital age. When I was young, and I am only 46, we had 3 television channels and it was a huge event when we finally got cable and it jumped up to 20. Today, every channel, movie and piece of music is available at your fingertips through your smart phone. It is getting harder and harder for brands (schools) to break through the noise and reach your audience. It used to be enough to have a yearly parent teacher conference and to have one open house a year to engage with your parents and attract new ones. Today, if you are not actively promoting your school on social media (and through multiple social media channels) you are seen as a relic of the past. Schools must understand what are the channels that their customers use and be present in them.
Sears serves as a cautionary tale for every school administrator. They didn’t recognize that what had made them so successful in the past was no longer “good enough”. The market changed and they didn’t. Many times when I work with schools, I have to overcome the “We have never done that before” syndrome. I know that change can be hard, but as Sears tells us, not changing is even worse.