Over more than 20 years in the K12 education market (and postsecondary, but that’s a whole nother story), I have noticed that people often have completely the wrong idea about the way this market works. I want to share a high-level overview with you because it is a story that I feel rarely gets told.
Why People Get it Wrong:
I shouldn’t be surprised: education is an especially complex set of markets. There are 14,000 districts in 50 states and they all have slightly different considerations and regulations. On top of that, nearly everyone is first introduced to the education as a student; while we have all been consumers of educational content as a student, few have been close to the nexus of decisions that affect policy, funding, and purchases. And we bring that student perspective when we try to approach the education market.
Why it’s Important to Get Right:
In business this is troubling, because every businessperson needs to know her market, or she risks marketing to the wrong people, misunderstanding her customers’ needs, and missing sales. Who are the decision makers? Do you know what types of decisions they make? What are their concerns? What influences their decisions? How do you reach them?
Students probably don’t pay much attention to who has purchasing power in schools, but if they ever did, they would probably think of the teacher first. And teachers do buy from content providers, it is true. A student might only be dimly aware that the school also has administrators, let alone district administrators and ESAs.
School administration has a great deal more power than teachers when it comes to purchasing. While teachers may have authority to spend a few hundred dollars a year, school administrators often have discretionary authority for thousands of dollars, and district administrators tens of thousands or even millions of dollars. But administrators have different needs. They need to see that students are learning, which teaching techniques are effective, and which teachers or schools need help. If you don’t understand the administrator’s needs, you can’t sell on that level. This cycle of influence makes up the local education authority, and it makes up the world of most parents and teachers.
There is one hidden player on the education game board however. Unless you work for a school district, you may not have heard of Education Service Agencies. They are designed to support the school and district. ESA services vary widely, but may include a buying co-op, accounting and auditing, oversight of special education and technical education classes, professional development, and technological support. ESAs influence teachers and school administrators, and are influenced in return. ESAs make their own purchases, and to market to them you not only have to understand the needs of the schools they serve, but also the additional drivers of their buying decisions and influence..
There are Other Factors:
To effectively expand in education, you have to understand the needs of teachers, administrators, and ESAs. And potential buyers don’t operate in a vacuum.
The district is heavily influenced by the state education authority, which shapes policy, provides funds, and creates legislation. The state education authority also buys systems and content directly from content creators.
State policy might influence how a district can purchase, or make it easier for districts to tilt toward certain types of decisions. State funding streams might reward or punish certain types of purchases or decisions, and compliance with state directives will definitely influence district decisions. All of these will make the market more or less difficult for you to do business in, so it’s important to know what influences there are.
At a higher level than the state is the federal government. The federal government sets policy and is responsible for about 10% of educational spending. It influences district and school purchasing by earmarking money specifically for professional development, or special education, or by favoring certain types of students, schools, or districts. Compliance or noncompliance with federal regulations might make more or less money available for certain purchases. If you do not know how federal policy influences a school’s use of your product, and if you are not monitoring how that can change, you may find yourself locked out of many decisions. Keeping abreast and influencing these policies is the values of belonging to the SIIA.
And arching over the whole education sector are the factors that shape the entire society: the capabilities of technology, economic and tax pressures, and the social and political climate.
Where do you Stand?
This is the maze your company moves through. Teacher, school administrator, ESA, state administrator: who will purchase your product? Who determines whether it actually gets used? What policies and funding streams affect the ability to decide to use you? How do you reach the right people?
Take a look at your business. How do federal, state, district, and school policies and funding affect the purchase and use of your products and services? Can you communicate your message in a way this is more in line with the concerns of the ultimate decision maker? Do you know the most effective ways to reach decision makers, both for new clients and to keep and grow existing users?
Maybe there’s a way Academic Business Advisors can help you better position your product, reach decision makers, and delight your users.