Using Data Science to Enhance Your School’s Perceived Value and Financial Vitality

What matters most to your school families? And how are you doing in meeting their needs, relative to what they are paying? Exploring the answers to these questions is key to ensuring strong, steady enrollment. Indeed, schools that achieve high perceived value on the outcomes that matter to current and prospective families, relative to their tuition level, are able to maximize their enrollment and financial vitality.

Given the importance of perceived value in light of tuition level, good managerial practice entails consistent monitoring via market research and benchmarking to ensure:

• knowledge of customers’ assessment criteria and perception of your school’s performance,
• ongoing assessment of the efficacy of school expenditures and investments, and
• the maximization of non-tuition revenue, which relieves pressure on tuition.

Most Schools Face a Relative Perceived Value Challenge

If we examine the universe of independent schools at any given time, roughly one third of schools are increasing enrollment or are full, one third are working very hard to maintain their enrollment, and one third are experiencing declining enrollment. Thus, at any given time, two thirds of schools need to pay a great deal of attention to assessing their school’s relative perceived value and take steps to optimize it relative to their tuition.

How Data Science Can Support the Management of Relative Perceived Value

There are five key steps your school can take to ensure it is effectively managing relative perceived value and thereby ensuring its health:

1. Establish accountability: Make someone in your organization accountable for assessing your school’s relative perceived value and executing needed corrective action as appropriate. In most organizations, there is diffused multi-departmental accountability for the component parts that contribute to relative perceived value. Diffused responsibility, in essence, means that no one is managing the total equation. Key candidates for the role include chief financial officers or chief advancement officers. These individuals have the respect of the senior staff and a penchant for research, benchmarking, linking educational and operational decisions to finances, and building organizational consensus. 
   
   
2. Generate needed information: Conduct research among prospective and current families to identify your school’s relative perceived strengths and weaknesses on the outcomes that matter most to the customer. Then, perform comprehensive benchmarking of your school’s key revenue generation, expense management, and asset utilization ratios compared to those of respected peer schools to pinpoint better ways to utilize resources and minimize tuition increases.
   
   
3. Convene the senior leadership team and define the required solution areas and actions: Form a working team of key functional leadership under the guidance of the designated accountable party noted above. Allocate the areas of opportunity and weakness that were identified during the second step to relevant school leaders. Work with them to them to define improvement hypotheses, validate them, and then design corrective programs that remedy weaknesses and optimize resource allocations to what matters most.
   
   
4. Implement and monitor: Define desired outcomes, responsible parties, time frames of required action, and anticipated progress milestones. Document the collective plans into a schoolwide road map. Meet regularly as a team to measure and review progress and define corrective action as needed. This disciplined approach has helped schools make measurable progress that results in enhanced perceived quality and better utilization of tuition and non-tuition revenue dollars.
   
   
5. Expect to repeat this process as needed: Improvement cycles generally take time to come to fruition, although there will likely be near-term gains. Expect to repeat the second phase every third year or so, and then complete steps three and four of the cycle. Watch the growth in organizational wisdom, enrollment, and esprit de corps that flows from the process! Yours is now a learning organization, able to master the strengthening of its relative perceived value, growth, and financial vitality.

In Summary

This systematic approach has been used by numerous schools to materially impact finances and relative value proposition. It can work for your school as well. It all starts with a recognition that deficits in relative perceived value proposition can be effectively managed but require defined leadership and a data-informed, disciplined process to achieve improvement. Your school’s enrollment, financial, and marketplace vitality are in the balance, and now is the time to take action.

You can learn more about how your school can actively manage its perceived value during the SAIS webinar, “Using Data Science to Enhance Strategic & Financial Planning,” on Wednesday, November 2, at 2:00 PM Eastern.

Dr. Harry Bloom, Senior Vice President, Client Solutions, Measuring Success

Dr. Bloom’s for‐profit experience includes brand and product management at Procter & Gamble and General Electric and management consulting work with McKinsey & Company. In his independent school work, Dr. Bloom has developed and implemented a number of marquee programs, including the Atidenu Recruitment and Retention program, the Recruitment and Retention Academy, the Governance & Fundraising Academy, and the Day School Financial Benchmarking and Reengineering program. These programs have helped well over 100 independent schools enhance revenue, increase efficiency, and strengthen their financial vitality. Dr. Bloom has a master’s degree in business administration from Columbia Business School and a doctorate of education from Yeshiva University’s Azrieli Graduate School of Jewish Education and Administration.